Fears federal budget could contain cuts to diesel rebate

Refueling with Biodiesel at Boggabri MineThe mining industry has been spooked by leaked correspondence suggesting that next Tuesday’s federal budget will contain cuts to the diesel fuel rebate for the resources and agriculture sectors.

Diesel is one of the mining industry’s biggest expenses after wages.

The ABC claims that “Recent speculation of a possible cut to the 38 per cent fuel tax credit in next week’s budget has prompted emergency crisis meetings across the resources sector.”

The ABC’s AM program claims it has a confidential brief sent last week by a major mine company CEO, which warns that a cut to the diesel rebate would be more damaging to the industry than the MRRT (Minerals Resource Rent Tax).

“We’ve run the numbers on any substantial change to the rebate and the impact would be profound. Most likely far greater than any MRRT (Minerals Resource Rent Tax) and probably a little less than the first mining tax,” the correspondence read.

According to the Parliamentary Budget Office, the rebate to the mining industry is expected to cost $2.4 billion over the next financial year.

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