Treasurer Jim Chalmers’ fifth budget has drawn a lot of attention over changes that’ll impact the housing market, including negative gearing and the Capital Gains Tax discount.
While these new policies are generally being applauded by young people, many of whom can’t get a foot on the housing ladder, there are other aspects to the budget that cohort is less impressed by. One of these is the government’s position on climate change and energy, which has also left environmental groups disappointed.
Chalmers’ budget showed that Labor would continue a scheme that allows businesses using diesel in machinery and vehicles that don’t go on public roads to get a refund on the fuel tax they pay.
These include:
Mining trucks.
Farming machinery.
Construction vehicles.
By the 2028/29 financial year, the Fuel Tax Credits scheme is expected to cost $13 billion annually.
Between the 2026/27 and 2029/30 financial years, the government predicts it will cost around $47 billion.
Economist Nicky Hutley questioned why the budget didn’t do more to encourage the development and use of electrified transport, “particularly heavy transport”.
Mining giant Fortescue is aiming to fully electrify its Pilbara mining operations by 2028.
Chief researcher at think tank Beyond Zero Emissions Matt McKee described the budget, including the continuation of the diesel rebate, as a “band-aid” that will only make us more reliant on fossil fuels.
As a result we will see more price shocks, such as the one caused by the closure of the Strait of Hormuz, due to war in Iran.
Hutley said the budget also missed an opportunity by not helping Australians cut their bills by electrifying their homes.
McKee backed the government putting money aside to convert the Boyne aluminium smelter in Central Queensland so it can run on renewable energy.
Check out the video by the National Account’s Archie Milligan:
Thumbnail: AAP