The nation’s peak mining lobby is ramping up efforts to protect the $9.1bn fuel tax credits scheme, seeking to counteract a groundswell of support among Labor’s rank and file to roll back the lucrative rebate ahead of the ALP’s national conference.
Wary of a repeat of the viral grassroots campaign that thrust a proposed 25 per cent tax on gas exports into the national spotlight, the Minerals Council of Australia will launch a campaign on Monday to defend fuel tax credits, aiming to combat what it says is a flood of online “misinformation”.
“We’re well aware of the threat that has come to the door of the gas industry,” MCA’s chief executive Tania Constable told The Australian, saying the campaign would target “noisy activists and their supporters” who wanted to stop the resources sector.
Partnering with other industry bodies representing agriculture, fishing and forestry, the MCA’s “Hands off our Fuel” campaign, will provide a “digital only-rebuttal” against critics of the fuel tax credit regime, including environmental groups and unions who say the measure is akin to a fossil fuel subsidy.
As recently as last week, the government reaffirmed its support for the existing fuel tax credits regime, telling a Senate inquiry it did not back a Greens’ proposals to wind back the scheme, which refunds fuel excise paid by mining and agricultural businesses operating off public roads.
Nevertheless, industry groups fear an overhaul of the fuel tax credit scheme is gaining traction within Labor ahead of next month’s ALP national conference in Adelaide. The Labor Environmental Action Network, the party’s largest membership group, launched a campaign in February calling for curbs on fuel tax credits for the resources sector
Under LEAN’s proposal, major miners including BHP, Rio Tinto and Fortescue would face an annual cap of $50m on fuel tax credits, with savings redirected towards industrial decarbonisation projects. Non-mining businesses that claimed the credits would not be affected.
Since launching, 322 Labor branches have passed motions endorsing LEAN’s proposed reforms, making it the network’s most popular campaign to date.
The group is also expected to advance a separate motion at the ALP national conference in support of revamping the rebate. While it will not explicitly commit to curbing the credits, The Australian understands the motion will include a broader principle that no policy should undermine other measures aimed at reducing emissions.
LEAN national co-convener Louise Crawford said overhauling the fuel tax credit mattered because Labor members wanted taxpayer funds invested in “strengthening energy security and cutting emissions, not locking in diesel for longer than necessary.”
“With 322 branches backing LEAN’s campaign in just over four months, it’s clear members care,” she told The Australian.
LEAN’s proposal has similarly gained support within the federal Labor caucus. Bennelong MP Jerome Laxale last month told The Guardian it was “reasonable to expect more” from major mining companies and endorsed the campaign ahead of the ALP conference.
Asked about LEAN’s push, Ms Constable said: “We are aware there is an ALP conference coming up in which groups like LEAN will push to actually impose a new tax on the industry, and we are going to not stand for that.”
The MCA’s new campaign follows the release of fresh modelling by the Parliamentary Budget Office last week that showed curbing fuel tax credits would deliver a substantial boost to government coffers, but likely dent business profitability or raise consumer prices.
Under a scenario where the fuel tax credit rate was decreased for all sectors by 25 per cent from mid-2027 rather than capped, an extra $7.7bn in tax revenue would be delivered to the budget bottom line over the four-year forward estimates, and $30.6bn over the decade.
“Assuming no other changes to the system, reducing fuel tax credits would likely result in either increased consumer prices, when businesses pass the impact through the production chain, or reduced business profitability, for businesses that are unable to pass the impact on,” the PBO said.
The analysis found that transport, postal and warehousing businesses – where fuel costs are closely tied to revenue – would be most exposed to changes to the scheme, saying some operators could become unprofitable if they were unable to pass higher costs on to customers.
By contrast, the mining sector appeared less exposed, with fuel tax credits playing a smaller role in profitability and accounting for a relatively modest share of the industry’s overall tax bill. The PBO said consumers could still be indirectly affected through lower dividends, reduced tax revenues and weaker investment.
Extracted in full from: https://www.theaustralian.com.au/business/mining-energy/miners-seek-to-counter-labors-grassroots-fuel-tax-credit-revolt/news-story/67d8f7e7d7e5018031a1645ebe4305ef
