Fuel tax credit confusion cause for regional angst

Farmers and regional Australians are anxious about the future of the fuel tax credit mechanism, should a minority government result following Saturday’s election.

“Farmers’ angst is fuelled by rhetoric from some independent candidates incorrectly labelling the FTC a subsidy,” National Farmers Federation (NFF) President Fiona Simson said.

“This is not only simply wrong – it’s dangerous. If this notion was to get traction, it would damage Australian agriculture’s competitiveness and impose significant hardship on regional, rural and remote Australians.”

Simson said the FTC did not lower the price of fuel paid by users.

“Akin to the way the GST rebates the cost of business inputs, the fuel tax credit rebates the cost of the fuel tax credit to those using fuel off-road for business purposes. It removes what is an additional tax on a business input,” Simson said.

“There is no cost to taxpayers. It does not equate to spending by governments in other areas.”

Scrapping or restricting the FTC scheme would effectively impose a levy on industries, like agriculture, that are reliant on diesel fuel to generate power and operate vehicles and other machinery off-road.

The importance of the credit was highlighted in recent research by Grain Grower Limited, the peak body representing Australian grain farmers.

“Ninety-seven percent of growers surveyed said maintaining the FTC would be an election policy that would have the greatest positive impact on their sustainability and profitability,” Grain Growers Limited CEO David McKeon said.

“The Fuel Tax Credit Scheme is critical for regional Australia, especially for grains sector that is so heavily reliant on diesel. We must ensure the scheme is maintained so farmers are not required to pay an excise for fuel used off-road,” he said.

“Right now, farmers across Australia are in their paddocks planting crops to put food on our supermarket shelves. They will be adding up the input costs to their business and their potential diesel bills will be weighing heavy on their minds.”

Agriculture, like many other regionally based industries, such as mining and tourism, are among the nation’s largest exporter earners and overall contributors to Australia’s economic prosperity.

“Farmers collectively export more than 75 per cent of what they produce, operating in a highly competitive global marketplace,” said Simson.

“An undermining of the fuel tax credit system would damage Australians farmers’ ability to compete on the world stage and therefore their profitability and productivity,” she said.

“Throughout the pandemic farmers kept Australians in work and supported an economy on life-support.

“Despite significant recent headwinds, the sector is on a trajectory of growth, on track to meet and beat the NFF’s goal for agriculture to be a $100 billion industry by 2030.

“If Members of Parliament no matter their colours, are serious about supporting a bright future for regional Australia and agriculture, they must declare their support for the FTC scheme before this Saturday.”

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