Diesel underpins the operation of some of Australia’s most important sectors, including the wildcaught Australian seafood industry, agriculture, forestry, regional tourism, construction, transport and manufacturing.

Many of these sectors are based, or have large investments, in rural, regional and remote Australia. Fuel is a vital input for a range of businesses in these sectors. Diesel is used off-road in vehicles, generators for power supply and in heavy equipment.

The Fuel Tax Credits Scheme ensures these businesses are not disadvantaged by paying excise on the off-road use of diesel in the production of goods and services.

To that end, SIA has joined forces with some of Australia’s largest industries to ward off any attempts to wind back or scrap fuel tax credits, called the Fuel Tax Credits Alliance. 

We’ve helped develop a campaign, Fuel Tax Facts, to bust myths and bogus claims about the system.

SIA will continue to discuss and promote the need to maintain the Fuel Tax Credit Scheme with the government and the community. 

Fuel tax credits are not a subsidy for fuel use, but a mechanism to reduce or remove the incidence of excise or duty levied on the fuel used by business off-road.

The Fuel Tax Act 2006 automatically operates to offset the government’s excise for off-road use of fuel by businesses and non-transport uses of fuel such as electricity generation. Any move to reduce fuel tax credits would introduce a tax distortion by imposing a tax on industries that are reliant on diesel fuel to generate power and operate heavy machinery. It would also create financial hardship for some of Australia’s most remote communities.

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