Nicolette Boele (Bradfield, Independent) Share this | Hansard source

I move:

That this House:

(1) notes that:

(a) under the Fuel Tax Credits (FTC) scheme introduced in 2006, Australian consumers can claim a tax credit for certain fossil fuels used in machinery, and for certain heavy and off-road vehicles;

(b) the FTC scheme cost the Australian taxpayer $10.8 billion in 2025-26;

(c) by 2028-29, the cost of the FTC scheme is forecast to reach $13.1 billion federally, at a rate of growth higher than growth in spending on a range of social services, including disability assistance, childcare subsidies and aged care;

(d) the Government has a legislated target of achieving net zero emissions by 2050;

(e) the Department of the Treasury's 2025 modelling shows that current government emissions reductions policies are insufficient for achieving that target;

(f) Australia's economy continues to be subject to geopolitical shocks which impact the availability and cost of fuel; and

(g) the FTC scheme is one of the largest headwinds for the Australian economy to electrify, a critical aim for meeting both our net zero emissions targets and supporting Australia's energy independence and therefore national security; and

(2) calls on the Government to:

(a) undertake an orderly phase-out of the FTC scheme; and

(b) consider, for that purpose, the introduction of a transition tax incentive with the following elements:

(i) a cap of $50 million annually, per consolidated corporate entity, to the FTC scheme (so that it will not apply to small users of the FTC scheme, such as farmers and small businesses); and

(ii) permit receipts by consolidated corporate entities above $50 million to be retained for capital expenditure in eligible electrification infrastructure and technology investments and to enable an orderly phase-out of fuels eligible for the FTC scheme.

The cost of living is hurting people across my electorate and the entire country. So wouldn't many of those hardworking Australians be outraged to learn that last year, while they were struggling to get by, the government was handing out billions upon billions of dollars in fossil fuel subsidies. In the last financial year, the government dealt out almost $11 billion under the Fuel Tax Credit Scheme, which is Australia's largest fossil fuel subsidy. This outdated subsidy is predicted to get even bigger, reaching $13 billion by the end of the decade.

Who's paying for these enormous tax breaks? You are; the taxpayer. This scheme is aimed at helping relieve the cost of businesses using petrol and diesel in certain applications in the economy—including miners, who use a lot of diesel on mine sites in machinery and to move materials between mine and port. And transport companies running heavy vehicles over 4.5 gvm are also potentially eligible for the handout.

Before I go on, I want to make something very clear. I am in no means proposing that we take away that support, especially now with fuel prices skyrocketing. What I'm proposing instead—and I'll explain the details very shortly—is that we stop giving mining companies, including polluting coal and gas companies, tax breaks that do nothing to sustain their risky reliance on imported liquid fuels. The mining industry receives the lion's share of the fuel tax credits. In financial year 2024 alone, it received almost $5 billion under the scheme, and the total amount received by the mining industry since the scheme began in 2007 is an almost unimaginably large $57.5 billion.

Subsidising mining companies like this doesn't seem to make a lot of sense from any angle. Firstly, and most obviously, these companies are doing quite well without it. They don't need our help. They're some of the most profitable companies in the world, and it makes no sense to artificially widen their margins at the expense of other high-value public investments like health care and education. On top of the subsidies these companies receive, we don't tax them heavily, especially our gas industry. So that's a double whammy: handouts in the form of subsidies which keep them addicted to dirty fossil fuels and low tax rates charged.

Secondly, by incentivising diesel use, the scheme locks us into continued dependence on imported fuels. The more we need diesel, the more vulnerable we become to global price shocks. And the last few weeks have shown us just how painful those shocks can be.

Thirdly, all that money could be spent better. Think about all the things that the government tells us are too hard to fund, too expensive and too impractical—from cheaper health care to more and better paid teachers and nurses; free university degrees; better funded public schools; more energy relief, especially for those who can't access solar, for example, in strata; and more funds for Australian creatives like musicians, actors and writers. The options are practically endless, and, while we can't pay for them all, we could certainly afford more if we spent less on fossil fuel subsidies.

How do we do it without hurting farmers and small businesses? Well, our friends at Climate Energy Finance have come up with an excellent proposal for phasing out the fuel tax credits, and that is to cap the scheme at $50 million per business. Most farmers would stay well below that cap. The only ones affected would be the small number of large mining companies currently benefiting from the scheme. These include coal companies like BHP, Glencore and Yancoal. In the 2024 financial year, BHP received over $600 million in fuel tax credits and made a profit of over $10 billion.

The motion I've put forward today calls on the government to implement this simple but powerful reform. And, to make the proposal even more palatable, companies would be allowed to keep receiving credits over the $50 million but only if they use that extra money to invest in assets and systems that deliver the shift for businesses and their supply chains to electrify and to decarbonise—things like electric trucks, electric machinery and renewable energy infrastructure. These are great ideas to futureproof their businesses in the mining sector, insulate against fuel shocks and address climate change.

To be clear, no-one is worse off from this initiative. This is sensible, smart reform—smart for the budget, for reducing cost of living, for improving energy security and for cutting emissions. The fuel tax credit scheme must be reformed. Every day that the government continues to hand out these tax breaks, it's irresponsible and, quite frankly, it's disrespectful. It's disrespectful to all those Australians struggling each and every day—struggling at the checkout counter, struggling at the bowser— (Time expired)

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