Albanese Government Urges to Halve Fuel Tax Credits Given to Mining Trucks, Semi-trailers, and Other Heavy Vehicles

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The fuel tax credits for trucks and heavy vehicles are estimated to come at $8 billion per year, and the Australian government is now being urged to halve this expense.

In light of a recent analysis that found reforms are essential for budget repair and fulfilling emissions targets, the Albanese government has been advised to cut in half the $8 billion in fuel tax credits it grants to mining trucks, semi-trailers, and other heavy vehicles.

Australia’s Fuel Tax Revenue

A Grattan Institute research published on January 30 claims that fuel tax credits have been “gnawing away an ever-growing share of fuel tax revenue” and that only half of the present expenditures are justified in terms of the economy or society.

According to the research, the fuel tax credit program is “a political gift” that mainly benefits significant firms.

Australia levies a fuel tax of 47.7 cents per litre. However, heavy machinery and trucks that travel off-road are exempt from this tax.

The leading research author and director of the Grattan Institute’s transport and cities program, Marion Terrill, thinks halving the credits may lower the structural budget deficit by 10 per cent, or $4 billion annually.

According to the report, heavy on-road vehicles should be taxed at the same rate as utes, vans, cars, and small trucks used by businesses because “there is no business reason why larger vehicles should pay less than smaller vehicles – quite the reverse since heavy vehicles do far more damage to roads.”

Terrill contends that since burning diesel accounts for 17 per cent of Australia’s overall carbon emissions, halving fuel tax credits would aid Australia in achieving its 2050 net zero emissions goal.

The report recommends that the government ensure that any money saved from reducing fuel tax credits is reinvested into programs encouraging the uptake of more efficient heavy vehicles, such as electric trucks and other low-emission technologies. 

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