Full Story The anti-climate policy blowing a hole in Labor’s budget
Mar 8, 2026
Adam Morton, Guardian Australia’s climate and environment editor, explains a costly fuel tax credit scheme and why it undermines climate goals. He breaks down who benefits, why the rebate logic is flawed, and the political pressure from mining and transport. Listeners hear about reform proposals, industry pushback, and the growing tension between budget pressures and emissions targets.
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Fuel Tax Credits Cost Billions Annually
- The fuel tax credit lets many industries reclaim the 51.6¢/L excise, costing the budget $10.8 billion this year.
- Adam Morton notes the rebate applies to off-road diesel use by miners, farmers and tourism operators, draining public coffers.
Excise Is Not Primarily For Roads
- The common justification that credits exist because recipients don't use public roads is weak.
- Morton explains only ~5% of excise revenue is tied to road funding; most excise goes to consolidated revenue.
Broad Criticism From Unions And Experts
- Critics across politics and unions call for winding back the rebate as unjustified budget spending.
- Morton cites the ACTU, Labor Environment Action Network, Climate Energy Finance and ex-Liberal treasurer Matt Kean urging reform.