A country’s economic competitiveness is measured by its ability to sell goods and services to the rest of the world and compete against goods and services produced overseas.

Australia’s key economic strengths lie in commodity exports, such as agriculture and mining, and services exports, like tourism.

About 1.3 billion tonnes of cargo moves across Australian ports. International exports represent more than 80 per cent of this cargo.

Reducing or abolishing fuel tax credits would increase industry costs because it adds a tax, fuel excise, on production of these exports. It’s equivalent to a tax hike in industries where diesel is a significant operating cost.

Increased costs could not be passed on in the global market in which commodity exporters operate. Instead it would make Australian industries less competitive, weaken investment, outputs and employment.

It’s not just Australia’s commodity exporters that compete in a global market. Tourism is Australia’s largest services export industry, just ahead of education. Tourism operators face a constant challenge to secure global market share because Australia is a high-cost destination compared with New Zealand and our neighbours in Asia.

Tourism operators using diesel fuel off-road would face enormous cost pressures if fuel tax credits were reduced or abolished.

In 2014, Deloitte Australia nominated the following five areas of comparative advantage for Australia:

  • Agribusiness
  • Mining
  • Gas
  • Tourism
  • Oil

Fuel is a vital business input for a range of Australian businesses within these sectors.

It’s important to remember that a number of Australia’s international competitors levy no tax on diesel used in mining or agriculture.

Limiting or reducing fuel tax credits would not only be devastating for many businesses, it would add significant cost pressures to Australia’s most productive sectors.

Removing fuel tax credits would amount to a tax on Australia’s key export sectors.

If fuel tax credits were abolished, our ability to survive in a high cost domestic environment would be severely compromised.

David CarterAustral Fisheries Perth, Western Australia

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Our industry already constantly fights to be price competitive with overseas destinations.

Tony BakerManaging Director
Quicksilver Group, Queensland

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