The mining, farming, tourism and forestry industries will today deliver a pre-emptive strike to protect the diesel fuel rebate as the government moves into budget preparation mode.

After the industries narrowly avoided a cut to the program, known as the fuel tax credits scheme, before last year’s budget, a coalition of nine industry organisations will today release a report detailing the case to keep it. With the government looking for savings and the Greens pushing for its abolition, declaring it a $6 billion fossil-fuel subsidy, concern remains that the scheme could again be in the razor gang’s sites.

The groups include the Minerals Council of Australia, the National Farmers Federation, the Australian Forest Products Association, the Australia Petroleum Production and Exploration Association and the National Irrigators Council.

The report argues that the abolition of the scheme would jeopardise the continued operations of fishing and tourism operators who rely on diesel to power their boats. “We use diesel in all our vessels and at our Green Island Resort,’’ said Quicksilver Group managing director Tony Baker, who operates out of Port Douglas in far north Queensland.

“Our diesel fuel usage is about 4.5 million litres per annum. We would face significant issues if the fuel tax credits scheme was dismantled.’’

The groups argue that the fuel excise was introduced to contribute to the cost of building roads, therefore it should not apply to diesel used off-road or in off-grid power generation. The groups also argue that sound tax policy dictates that taxes on intermediate business inputs are inefficient and distortionary.

Minerals Council of Australia chief executive Brendan Pearson said the report was designed to ensure that the false claims made by the Greens and some environmental activists gained no traction. “We don’t pump water on public roads and we only receive the rebate for off-road use,’’ National Irrigators Council chief executive Tom Chesson said. “Any government cuts to the scheme would be greeted with dismay by irrigated agriculture.’’

Extracted in full from The Australian.

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