An economic think tank has left rural Australia carrying the can for fixing the federal budget deficit. The Committee for Economic Development in Australia has recommended cutting the fuel tax credit scheme, which includes diesel rebates, by half as a means of getting the budget back into surplus by 2018-19. Source: The Weekly times
Raising petrol tax by 10% has been suggested as an alternative but both options have been criticised for unfairly targeting rural Australians.
Nationals MPs have already voiced their disapproval of CEDA’s suggestion.
The diesel tax subsidy is considered a “die-in-the-trench” issue for the party, NSW Senator John Williams said.
“I would vehemently oppose it,” he said. “We’re up against heavily subsidised farmers around the world – the least we can do is keep costs down when ours are ploughing the paddocks and not wearing the roads down.”
Senator Williams said farmers in Europe, China and the US benefited from billions in subsidies each year while “we give ours tuppence”.
Asked if such a policy would ever gain real traction, Senator Williams said: “In my opinion, as long as the Nationals have a balance of power, I would say no”.
Mallee MP Andrew Broad labelled CEDA’s suggestion a “cheap grab at the person who’s growing our food”.
“The big thing that gets lost is it’s not a rebate, it’s recognition that when you’re using a stationary pump or a tractor, you’re not driving on roads,” he said.
“I really don’t see that cutting that in half will balance the budget, when what we want is to drive productivity.
“Ensuring our food productivity and exports are viable is the first step in recovering the economy.”
The report – titled Deficit to balance: budget repair options – also suggests raising “sin” taxes on alcohol and tobacco by up to 20%.
“The case for raising the sin taxes has been argued before but there are also clear anomalies which should be addressed, such as the availability of wine tax rebates for New Zealand producers and for bulk wines,” the report said.
Also recommended were cutting federal public service jobs by 10,000, cutting capital gains discounts by up to 75% and taxing superannuation contributions.