{"id":667920,"date":"2026-05-13T09:35:07","date_gmt":"2026-05-13T09:35:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/667920\/"},"modified":"2026-05-13T09:35:07","modified_gmt":"2026-05-13T09:35:07","slug":"budget-buckles-on-fossil-fuel-tax-reform-and-puts-a-band-aid-over-climate-and-energy-resilience","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/667920\/","title":{"rendered":"Budget buckles on fossil fuel tax reform, and puts a “band-aid” over climate and energy resilience"},"content":{"rendered":"

\"\"<\/a><\/p>\n

In a federal budget that has sought to restore intergenerational equity, particularly through reforms to tax concessions that have long favoured Australia\u2019s wealthiest few, the Albanese government is facing criticism for ignoring a golden opportunity to balance the scales on energy and climate.<\/p>\n

Jim Chalmers on Tuesday night described the 2026-27 budget as \u201cthe most important and ambitious \u2026 in decades.\u201d And while \u201cclimate\u201d did not rate a single mention in the federal treasurer\u2019s speech, \u201cgetting through the global oil shock and building resilience\u201d topped his five-part economic strategy. <\/p>\n

But Chalmers\u2019 strategy is notably lacking in ambition on new funding for climate and renewables \u2013 and has failed to act on what is broadly considered to be the clearest political mandate, yet, to reform fossil fuel tax loopholes and subsidies.<\/p>\n

Climate Energy Finance director Tim Buckley \u2013 while noting the $60 billion of decarbonisation and Future Made in Australia funding initiatives put in place over the last four Chalmers budgets \u2013\u00a0says this is a \u201cglaring omission\u201d in the context of the global fossil fuel shock and cost-of-living crisis. \u00a0<\/p>\n

\u201cThe government declined to introduce a proposed\u00a025 per cent gas exports levy\u00a0at a moment when prices are hyperinflated by Trump\u2019s war in the Middle East, a reform which could have delivered $17 billion annually to the Budget and funded cost of living relief,\u201d Buckley said on Wednesday. <\/p>\n

\u201cInstead, it buckled to appease the war-profiteering gas industry. Likewise, the failed PRRT [petroleum resource rent tax], which will deliver just $1.6 billion per annum over the next four years, was untouched.\u201d<\/p>\n

Also left untouched by the government was the controversial diesel Fuel Tax Credit scheme, an $11 billion a year fuel tax break that is expected to grow to $13 billion a year in 2026-27.<\/p>\n

Iron ore billionaire Andrew Forrest, whose company Fortescue Metals is itself one of the largest recipients of the FTC, has been pushing hard for the introduction of a $50 million annual cap on diesel fuel rebates per company, including through a major pre-budget ad campaign<\/a>.<\/p>\n

Fortescue points to research that shows Australia\u2019s 18 largest miners received about one-third of the $11 billion in FTC rebates returned to businesses in the 2025-26 financial year.<\/p>\n

It wants reforms to restore fairness to the system, and to stop subsidising fossil fuel dependence for major companies that should be decarbonising their operations.<\/p>\n

In a rousing speech at last week\u2019s Smart Energy Conference in Sydney, Forrest slammed the FTC as \u201cabsurd politics\u201d and said Australian industry was \u201cbeing held hostage by diesel, and the rebate scheme.\u201d<\/p>\n

But for all of Twiggy\u2019s passion, the call for tax reform on this count has not been heeded. <\/p>\n

\u201c[The FTC]\u00a0remains untouched, leaving taxpayers out of pocket and disincentivising mining majors \u2013 its key beneficiaries \u2013 from investing in decarbonisation\u2026 as it keeps them addicted to imported diesel,\u201d Buckley says. <\/p>\n

\u201cThe government\u2019s temporary cuts to petrol and diesel excises sustain this national dependency.\u201d<\/p>\n

In its own statement, on Wednesday, Fortescue said the lack of action on the FTC was \u201cdisappointing\u201d and pledged to continue to advocate for reform.\u00a0<\/p>\n

\u201cNow is the time for Australia to show real leadership and stand up for a fairer approach to fuel tax settings,\u201d said Fortescue Metals and operations CEO Dino Otranto in a statement.<\/p>\n

\u201cBillions of dollars continue flowing through a tax credit that overwhelmingly benefits some of the country\u2019s largest and most profitable companies. That\u2019s becoming harder to justify when Australians are doing it tough.<\/p>\n

\u201cWe recognise the government is managing a range of economic pressures and priorities. But this issue shouldn\u2019t keep getting pushed to the side.\u201d<\/p>\n

The response from the Climate Council, however, was a little less diplomatic, describing the lack of action on subsidies like the FTC as a \u201c$19 billion budget free kick\u201d for the fossil fuel industry.<\/p>\n

\u201cThis Budget maintains the $19 billion gravy train for big fossil fuel corporations,\u201d said Climate Council CEO Amanda McKenzie on Wednesday.<\/p>\n

\u201cThat is $19 billion in the wrong direction, keeping us tied to foreign oil, rather than supporting the expansion of\u00a0renewable energy solutions\u00a0that Australians want to deliver a safer, cleaner, more secure energy future.<\/p>\n

\u201cIf the government is serious about intergenerational fairness, the Budget must address not just housing but climate harm landing on young people. We can\u2019t secure young Australians\u2019 futures while expanding coal, oil and gas,\u201d McKenzie said.<\/p>\n

And Buckley, too, is scathing: \u201cInaction on fossil fuel tax reform fails to deliver a fair return to Australians\u00a0from multinational gas giants\u2019 exploitation of our sovereign assets,\u201d he said on Wednesday.\u00a0<\/p>\n

\u201cAnd it does not strategically decouple our economy at speed and scale from expensive, volatile imported oil so as to permanently ensure our energy security\u00a0and insulate us from future threats.\u201d<\/p>\n

Taking a broader lens, economist and Climate Councillor Nicki Hutley points to the budget\u2019s lack of ambition on climate and its failure to back in some of most basic policy measures for cutting both emissions and bills.<\/p>\n

\u201cThis federal budget includes serious tax reform to deal with the housing crisis, but a patchwork of fossil fuel subsidies and short-term handouts\u00a0that keep us dependent on fossil fuels from volatile regions,\u201d Hutley said on Wednesday.<\/p>\n

\u201cThe government could have done much more to expand clean energy and electrification, which can deliver lasting cost of living relief and energy security, while reducing climate pollution.\u201d<\/p>\n

Matt McKee, the chief researcher at Beyond Zero Emissions, says the budget \u201cfeels like a band-aid\u201d rather than a recipe for energy and economic resilience. <\/p>\n

\u201cThis budget was partly a test of whether Australia is serious about building long-term energy security at home, rather than just managing short-term risks from overseas,\u201d McKee said. <\/p>\n

\u201cOn that account, we have to acknowledge it leaves a lot to be desired \u2013 funding for short-term fuel storage far outpaces long term decisions that sustainably reduce fuel demand.<\/p>\n

\u201cEnergy security isn\u2019t just about fuel reserves, it\u2019s about building a domestic, renewable energy system that doesn\u2019t rely on global supply chains in the first place,\u201d says McKee. <\/p>\n

\u201cWhile we applaud some of the R&D support we saw today, this budget feels like a band-aid for the challenges facing Australia\u2019s industrial regions.<\/p>\n

\u201cWe\u2019re keen to work with the government on how we can best utilise the existing budget mechanisms to deliver the necessary economic resilience that the Treasurer regularly mentioned in his speech.\u201d<\/p>\n

Francis Vierboom, CEO of Rewiring Australia, applauded the CGT and negative gearing changes, but also vented his frustration on energy decision.<\/p>\n

\u201cIt\u2019s pretty dumb we\u2019re ploughing $10 billion into a government petrol stockpile and letting offshore gas just keep shipping away for free when a gas tax that pretty much everyone wants (except Inpex shareholders) could fund electrifying all the houses and cars and trucks in the country and prevent us from having to care at all about oil prices and oil-driven inflation ever again,\u201d he wrote on LinkedIn.<\/p>\n

See also:\u201cFuture Made Somewhere Else:\u201d Budget slashes funding for green hydrogen, home-made solar and batteries<\/a><\/p>\n

And: Road user charge for EVs put on hold, more money for regional and kerbside charging<\/a><\/p>\n

If you would like to join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, please\u00a0click here to subscribe to our free daily newsletter<\/a>.<\/p>\n

If you wish to support independent media, and accurate information, please consider making a one off donation or becoming a regular supporter of Renew Economy. Please click here. Your support is invaluable.<\/a><\/p>\n

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