Grattan Institute's Tax Idea a 'Recipe For Disaster'

08 February 2023

8 February

TFGA challenges Grattan Institute's fuel tax proposal

The Tasmania Farmers and Graziers Association (TFGA) strongly opposes the Grattan Institute's proposal for Treasurer Jim Chalmers to tax farmers an additional $4 billion dollars through the fuel excise scheme to reduce the federal budget deficit.

CEO for the TFGA Hugh Christie said the idea of imposing the fuel excise on non-road users made no sense. He said the fuel excise is used to maintain and invest in road infrastructure, and tractors, harvesters and other farm machinery operate in the paddock and not on the road.

“It takes much imagination for the Gratton Institute to say farmers should pay tolls and road taxes on diesel used on farm,” he said.

The TFGA highlights that farmers are already struggling with high fuel, fertilizer, and other business input costs. He also warns that increasing taxes on farmers will further add to these increases , causing a rise in grocery prices for average Australians and upward pressure on inflation which is impacting everyone.

“Further taxing farmers can only be a recipe for disaster regarding inflation. In the long run, the average Australian will be the one that pays more when it comes to the weekly grocery bill if farmers are going to continue to have sustainable businesses providing high quality, Australian food for the country.”

“The Grattan institute must be out of touch with the average Australian. Do they understand that the basics, something like a 650-gram box of cereal for a family, already cost $9.50. Can consumers really be asked to pay more for the basics?”

The Grattan Institute report argues that increasing diesel costs for farmers will lower greenhouse gas emissions, but this claim is dangerous, as there are no alternatives for farmers to use in their operations.

“To echo the National Farmers Federation, such ideas are a dangerous fantasy when there are no alternatives for the farmer to purchase or switch over to for farming,” he said.

“Farmers need certainty, not ad-hoc taxation and poorly thought-out policy ideas that drive costs up for consumers, it shouldn’t be hard for the Treasurer to rule out any increase or new taxes for the agricultural industry, it’s simply the right thing to do” he said.

The real challenge for the government is how to tax electric vehicles, as revenue from traditional sources is declining. The TFGA suggests that the focus should be on finding a solution for this issue instead of imposing new taxes on the agricultural industry.

For comment please contact:

Grayson Genders, Manager Communications and Engagement
(Mob): 0407 863 111

Photo by Franki Chamaki