Funding to coal dwarfs funding to renewables

by Tom Swann, Researcher

You and I pay tax on fuel when we fill up our tank, but many companies get that tax back through the Fuel Tax Credits Scheme,and the biggest beneficiary is the mining industry.

The budget shows the scheme cost taxpayers $6.9 million in 2018–19. That’s up $700m since last year, and now far bigger than all revenue derived from excise on petrol ($6.2 billion). What’s more, the Budget expects this to continue to climb — up to $8.1 billion by 2021–22.

The graph below estimates how much different industries benefit from this tax-free fuel using ATO data from 2016–17.By far the biggest beneficiary is the mining industry, at $3.0 billion or 44% of the total. Coal mining is nearly half of that, at $1.4 billion.

The budget also provides helpful summaries of total spending on “fuel and energy” — $7.5 billion — nearly entirely made up by the fuel tax credit scheme. Just $342 million is “renewable energy” — less than a quarter of the fuel tax credits for the coal industry alone.

Demonstrating how serious the government really is about ‘clean coal’, notable cuts to “fuel and energy” include:

“cessation of funding for … Carbon Capture and Storage Flagships programs in 2018–19, and the cessation of the Coal Mining Abatement Technology Support Package in 2019–20.”

That’s just as well. As our research has demonstrated, Australian taxpayers have spent $1.3 billion on CCS with bugger all to show for it. Maybe the government should stop trying to get the Clean Energy Finance Corporation to fund coal as well.

No mention in this budget of Adani or the Galilee Basin, but prospects for taxpayer funding is still live, with Adani talking to the Export Finance and Insurance Corporation and the Minister giving it the green light to fund these sorts of projects.

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