Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I do not accept the characterisation of what we are doing as it has been put to the chamber by Senator Milne. I would also say, as an aside, given her references to big miners, the government believes that a strong mining industry is a good thing for Australia. We think that having big miners is a good thing for Australia. We want small miners to become big miners because the more small miners become big miners, the more jobs and opportunities there are for people across Australia to get ahead, to make a good living and to continue to build opportunity and prosperity in their lives. We do not accept the basic premise of what Senator Milne is putting to the Senate.

But in relation to the specific question, I will just point out a few facts. How is the equivalent carbon price applied to fuel? A business that uses fuel in off-road vehicles and in heavy on-road vehicles is normally entitled to a fuel tax credit equal to the amount of duty already paid on the fuel that they buy. The basic entitlement to fuel tax credits is 38.143c per litre—equivalent to the full duty on the fuel with applicable reductions created through various charges. Business off-road user fuel for industries other than agriculture, forestry and fisheries are charged an equivalent carbon price on fuel, which reduces the available fuel tax credit by a carbon charge. In the case of diesel, in 2013-14 the fuel tax credit was reduced by 6.521c per litre for a net fuel tax credit of 31.622c per litre. Abolishing the carbon tax from 1 July 2014 will restore fuel tax credits to their full right for all off-road business users, which will be 38.143c per litre. It stands to reason: if you are going to get a credit for the fuel that you have paid for and you are not using it for on-road usage—fuel excise is about user charge—but you are using it for off-road usage, whether it is for agriculture, mining or whatever, then, appropriately, you get a credit against that tax paid. It is a well-established policy position that, in years gone by, has enjoyed bipartisan support for very good public policy reasons.

I am intrigued as to why Senator Milne would ask me this question because she leads a party that stands for lower fuel taxes. The Greens want to keep cutting the real value of taxes on fuel. Every six months you want the real value of the tax on fuel to go down and down and down and down. It went from 41.5 per cent in 2001 to 25 per cent now. You want that to continue to go down and down and down. I am not quite sure why you are perturbed by what we are doing here because it is entirely consistent with what you are arguing elsewhere.