Twiggy’s rebate idea dead

Article by Stuart McKinnon & Jenne Brammer courtesy of the West Australian.


The Federal Government has ruled out calls by WA iron ore entrepreneur Andrew Forrest to phase out the $7.8 billion diesel fuel rebate.

Federal Agriculture and Northern Australia Minister David Littleproud said on Monday there was no means by which the Government would consider removing the fuel excise rebate to the mining or agriculture sectors.

Mr Forrest, the founder and chairman of Fortescue Metals Group, has been lobbying politicians on both sides of the aisle to phase out the rebate that saves his own company about $300 million a year.

Introduced 22 years ago by the Howard government, the fuel excise credit scheme refunds tax on diesel fuel for businesses, such as those in mining and agriculture, that don’t use public roads.

Mr Forrest wants the rebate phased out from 2025 and the extra money generated by the government to be spent supporting the development of a green energy industry.

But Mr Littleproud,  said the proposal was dangerous and didn’t make sense.

He said diesel users who didn’t use public roads should not have to fork out the excise to pay for maintaining them.

“Why would you constrain an industry? Why would you take away its competitiveness and effectively take away its jobs?

“And while Twiggy might be able to afford it, I don’t know whether every Australian out there that’s employed by some of these other industries can afford it and will want to see their jobs go because we’re not competitive.” Miners and farmers also slammed the proposal, saying it would cost investment and jobs because there is no widely available substitute fuel to power their operations.

The chief executive of the Association of Mining and Exploration Companies, Warren Pearce, said the group was absolutely opposed to any change to the credit. “While we support the development of greener fuel sources as a way to help our industry and the world decarbonise, the Diesel Fuel Tax Credit provides critically important support for these small industry players,” he said.

“Changes to this would prevent a number of exploration projects from development, impacting jobs and the livelihoods of remote communities.”

“Once hydrogen fuel sources, and the infrastructure to support it have been developed these companies will transition from diesel, but until that happens, and these new technologies are available, they have no choice.”

WA Chamber of Minerals and Energy chief executive Paul Everingham said several member companies were at the forefront of developing alternative technologies to power their mining equipment but they were several years away from coming to fruition.

Pastoralists and Graziers Association president Tony Seabrook said there were mining operations that were nowhere near as profitable as Fortescue and removing the exemption was “way out of order”. “He (Mr Forrest) sits back there sanctimoniously saying stupid things like what he’s just said without taking into account the fact that not everybody is flogging iron ore at circa $100/tonne or whatever when it costs $20/t to get it out of the ground,” he said.

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