Labor urged to halve $8bn a year in fuel tax credits for trucks and heavy vehicles

The Albanese government has been urged to halve the $8bn a year in fuel tax credits it gives mining trucks, semi-trailers and other heavy vehicles, with a new report finding changes are crucial for budget repair and meeting emissions targets.

Fuel tax credits have been “gnawing away an ever-growing share of fuel tax revenue”, with only half of the current amount spent justified in economic or social terms, according to a Grattan Institute report released on Monday.

The report found the fuel tax credit scheme was “a political gift” from which large businesses mostly benefit.

Australia’s fuel tax is 47.7 cents a litre, however vehicles that only drive off-road, including trucks on mine sites and heavy machinery, are not required to pay any fuel tax.

The tax is incorporated into the cost of fuel at the bowser, with the government refunding this via fuel tax credits.

Vehicles heavier than 4.5 tonnes such as semi-trailers, buses and B-doubles only have to pay a reduced rate, and receive a partial credit of 20.5 cents.

The Grattan report notes that the issue of increasing…