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Fuel excise changes should not hurt the bush

9 May 2014

With growing speculation of an increase in the fuel excise, the National Farmers’ Federation (NFF) is calling on the Federal Government to provide a corresponding increase in the off-road fuel rebate available to farmers.

NFF CEO Matt Linnegar has cautioned the government not to lift the fuel excise, without a complementary increase in the off-road fuel rebate, insisting that increasing one without the other would have adverse impacts on Australian farmers.

“If the speculation is right, then the government needs to keep two things in mind. Firstly, how they will soften the blow for rural and regional Australia, and secondly, how they will ensure that any lift in the excise, comes with a lift in the off-road fuel rebate,” said Mr Linnegar.

“The rebate has been in place for many years, and provides recognition that farmers, like our counterparts in mining, fishing and forestry, do not use diesel on the roads, and in turn, receive a rebate on the tax they pay at the bowser,” said Mr Linnegar.

The NFF is also keen to ensure that farmers—as price-takers—will not be proportionally worse off from an increase in the fuel excise, as all increases in costs throughout the supply chain will be felt at farm-gate.

Whilst the NFF understands that there are significant challenges facing the government in next week’s budget, putting more pressure on the production sector is not the answer.

“With fuel prices commonly over $1.60 a litre in rural Australia, an increase in the fuel excise will hit rural and regional Australia hard. Without a corresponding increase in the off-road fuel rebate, the impacts on production of food and fibre will be worse,” said Mr Linnegar.

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