Australia’s mining sector now receives almost half of all diesel fuel tax credit refunds, despite the scheme originally being designed to support agriculture, regional industries and small business.
At the same time, Australia has become increasingly dependent on imported diesel. Leaving the economy exposed to global supply disruptions, geopolitical instability and fuel price shocks.
Continuing to subsidise ever-growing diesel consumption weakens Australia’s long-term economic resilience.
This is not about punishing industry. It is about making sure government policy reflects Australia’s future economic and strategic priorities.
We propose a practical and targeted reform.
One that's good for the environment.
And good for the economy.
We propose a $50 million annual cap on diesel fuel tax credits per company. This reform would only apply to around 18 of Australia’s largest mining companies while preserving full support for small and medium businesses. The savings could be redirected toward priorities that strengthen Australia’s resilience and competitiveness, including energy security, regional infrastructure, lower-cost renewable energy, industrial electrification and cost-of-living relief.
This is not a proposal to abolish fuel tax credits. Farmers, fishers, transport operators and regional businesses would continue to receive full support under the scheme. The reform simply ensures the policy remains targeted at the businesses it was originally intended to help.
Australia cannot build long-term economic resilience while remaining heavily dependent on imported diesel. A capped scheme would encourage major fuel users to accelerate investment in renewable energy, electrification, low-emissions technologies and domestically produced energy solutions. This would result in lower exposure to global oil shocks, more stable long-term energy costs, stronger sovereign capability and greater investment in Australian industries and jobs.
Here is everything you need to know about reforming the diesel fuel tax credits.