The fuel tax credit is paid to businesses to fully offset the 47.7¢ a litre excise paid on diesel,petrol,kerosene,condensate and other oils. Businesses such as mines that operate vehicles solely on their own property are entitled to a full credit for their excise.
A discount worth 20.5¢ a litre is available to operators on public roads of vehicles that weigh more than 4.5 tonnes,such as semi-trailers. Vehicles under 4.5 tonnes,such as utes,vans and small trucks,do not qualify for the discount.
Grattan estimates that ending the discount for heavy vehicles on public roads and reducing the fuel tax credit to 25.6¢ would halve the cost to the budget of the tax credit to $4 billion a year.
The institute’s transport and cities program director,Marion Terrill,said the budget and environment would both benefit by reforming the fuel tax credits system and also put some transport operators on a level playing field with larger trucks.
“Cutting fuel tax credits would be a win-win:it would shrink the budget deficit and help
Australia hit net-zero carbon emissions by 2050,” she said.
“And cutting fuel tax credits in the way we recommend would have next-to-no impact on
household budgets – we calculate that prices at the supermarket would increase by an average
of just 35¢ on a $100 grocery shop.”