Estimating the 'cost' of fuel tax credits is a tricky business
- Written by John Freebairn, Professor, Department of Economics, University of Melbourne
In calling for an end to fossil fuel subsidies, critics of Australia’s fuel tax credits system have highlighted its cost to Australian taxpayers and the budget bottom line.
The Greens have said that ending fossil fuel subsidies to big mining companies would save Australian taxpayers A$21 billion over the forward estimates (the next four years). On the ABC’s Q&A program, Greens deputy leader Larissa Waters said her party advocated:
getting rid of the A$24 billion over the forward estimates – that’s four years – in free money that goes to the fossil fuel sector in things like cheap diesel and accelerated depreciation.
These numbers are drawn from policy costings produced by the Parliamentary Budget Office (PBO) ahead of the July federal election.
The PBO’s 2016 post-election report, which details the budget impacts of various election commitments, notes that:
Authors: John Freebairn, Professor, Department of Economics, University of Melbourne
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