Fortescue launches national campaign to cap diesel tax handouts to big mining companies

Fortescue is launching a national advertising campaign calling for reform of the Federal Government’s diesel tax “handout”, which is delivering excessive benefits to a small number of large mining companies at the expense of a fairer and more secure energy system for Australians.

The campaign – to run on television and radio – highlights the imbalance at the heart of the current policy, contrasting the cost-of-living pressures faced by everyday Australians with the billions of dollars in tax credits flowing to the mining industry.

The advertisements are centred on a nurse struggling to pay her household bills, drawing a direct comparison between Australians doing it tough and large companies receiving billions in diesel tax credits.

The campaign focuses on Australia’s largest mining companies, which receive a significant share of the estimated $11 billion returned to businesses each year under the Fuel Tax Credit Act 2006, effectively subsidising the use of imported diesel.

Meanwhile, households and small businesses will return to paying fuel excise in full when the Government’s temporary halving of the excise ends on 30 June.

Fortescue, itself one of the largest recipients of fuel tax credits, is calling for the introduction of a $50 million annual cap per company, arguing the reform is both fair and economically responsible.

Analysis by Climate Energy Finance, using Australian Tax Office and Safeguard Mechanism data, shows the 18 largest companies in mining received $3.36 billion in fuel tax credits in 2024–25. A $50 million cap would have delivered estimated Budget savings of $2.46 billion – with savings expected to grow significantly over time.

Fortescue is among a growing number of businesses, industry associations and NGOs calling for reform.

Fortescue Metals and Operations CEO Dino Otranto said the Company had taken the unusual step of launching a national campaign because the scale and unfairness of the diesel tax handout had not been properly understood.

“We have made our position clear directly to Government, but this issue goes beyond industry – it affects every Australian taxpayer,” Mr Otranto said.

“That’s why we are taking this campaign to the public. Australians deserve to understand that billions of dollars are being paid out each year in a diesel tax handout to a small number of very large companies.”

Mr Otranto said the current system had drifted far from its original intent.

“This diesel tax handout is meant to support essential industries, not deliver outsized benefits to the biggest players,” he said.

“At a time when families are cutting back and small businesses are doing it tough, it is reasonable to ask whether this is the best use of taxpayer money. Clearly, it is not.

“This is billions of dollars that could be used to lower energy costs for households and businesses right now.

“Instead, it is being handed back to a small number of large companies to keep diesel cheap. That is the wrong use of taxpayer money.”

Mr Otranto said Fortescue’s proposal was practical and targeted and would not affect those the scheme was designed to support.

“We are not talking about small miners, explorers, farmers, truck drivers or tradies – they should continue to receive support,” he said. “This is about putting a sensible cap on massive tax credits and restoring fairness to the system.”

He said reform would also strengthen Australia’s energy security.

“Australia has made itself dangerously reliant on imported diesel, leaving our economy exposed to global shocks and supply disruptions,” he said.

“This Government has adopted a number of good policies that support energy security, but when it comes to diesel they have inherited a bad policy that is getting worse the longer it is left unchecked. It is leaving Australia more dependent on overseas fuel at a time when the world is becoming less stable.

“It makes no sense to keep subsidising that dependence. Capping the diesel tax handout is a practical step toward restoring energy security and building a fairer, more resilient, self-reliant system.”

Fortescue is urging the Government to consider the reform as part of the upcoming May Budget, with savings able to be redirected toward lowering energy costs, easing cost-of-living pressures, essential services and investment in Australia’s future energy systems.

The campaign will roll out nationally from today.

 

Editor’s note:

The 30-second television advertisement can be viewed here.