Government digs deep for mining company tax rebates
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The fuel tax credit scheme rebates tax to businesses that use diesel for transport on non-public roads. The theory is that businesses that do not use public roads should not have to pay for them. However, in practice, the fuel tax scheme has not directly funded public roads for 60 years. Fuel tax revenue is a tributary of the Government’s main funding pool, the consolidated revenue fund.
The fuel tax credit scheme will cost taxpayers a whopping $7.8 billion in 2020-21, expected to increase to $8.9 billion in 2023-24.
The mining industry is by far its biggest beneficiary. Using ATO tax statistics from 2018-19, it is estimated that the mining industry will receive $3.5 billion in fuel tax credits for 2020-21. Of that, $1.1 billion will go to the coal mining industry.
That means coal mining companies will receive about three times as much in fuel credits in one year as the Australian Renewable Energy Agency will receive over four years. But the Federal Government don’t pick winners, do they?
Figure 1 below estimates the tax-free fuel benefit for different industries using ATO tax statistics from 2018-19.
