Nine peak representative bodies from mining, primary industries and tourism have joined to back the federal diesel fuel rebate ahead of May’s Budget, Fairfax Media reports

According to the news service, the newly formed Fuel Tax Credits Coalition includes the Minerals Council of Australia, the Australian Petroleum Production & Exploration Association and the National Farmers Federation.

The body has released a 36-page report calling for the retention of the scheme, which supports off-grid energy generation – responsible for about 6% of Australia’s electricity consumption in 2011-12. Mining operations consisted of about 71% of that demand.

Environment Victoria said mining’s claim to be on par with small farmers as needy recipients of the diesel fuel rebate was rent-seeking, with the former taking $2.5bn under the scheme each year.

“The largest share of the diesel rebate goes to the mining sector, and within this sector the biggest recipients are extremely profitable multinational companies like Rio Tinto and BHP Billiton, receiving hundreds of millions of dollars every year,” EV Safe Climate campaign manager Nicholas Aberle said.

Dr Aberle also disputed two of the common claims made by industry.

“There are two important industry claims that need to be debunked if we’re going to have a sensible discussion about the Fuel Tax Credit Scheme. Firstly, the diesel rebate falls squarely within the World Trade Organisation’s definition of a subsidy. Secondly, the fuel excise does not fund road construction: since 1959, fuel excise has gone into general revenue.”

EV called for a cap on how much each recipient could claim in diesel rebates, in order to better target the subsidy.

“Certainly food producers and many other smaller users rely on the diesel rebate. A simple cap on how much each company can receive in rebates each year would ensure farmers and others are unaffected by cuts to the scheme. An annual cap of $100,000 per recipient would be a fairer system and would free up billions of dollars for government expenditure on those who need it most,” Dr Aberle said.

Extracted in full from The Australian.