That was the theoretical intention (justification? excuse?) a thousand years ago.
In more recent times you could view it also as a de facto tax on CO2 emissions.
Regardless of intentions, it is a relatively meaningless distinction. All tax raised by the Feds goes into Commonwealth consolidated revenue.
Politically, this kind of thing can make sense i.e. to sell a new tax to the public. The reality is less pleasant - there being no direct correlation between a dollar raised and a dollar spent either in practice or in law.
No not subsidised. Taxpayers/government doesn’t give the mine any funds. The fuel excise is only applied as a levy/tax for those vehicles that use public roads, and isn’t applied to mines, agricultural production, energy generation etc as there is no direct use of public roads in question.
If the excise was broadened and applied to all diesel sold (off road equipment, on road vehicles and business use such as for pumps or generators), and mines were given an exemption for payment of the excise, it would then be a loss of collected tax revenue…and maybe one could argue it is a subsidy Unfortunately the later is not the case.
Perhaps we could. And when in the future there is less hydrocarbon fuel consumption to tax, what will the government tax in it’s place? Road user miles, or more prophetically “Solar radiation collection”?
Governments have previously demonstrated they have the legislative power to regulate and make money from water resources that fall from the sky. Them pesky little photons might be next.
Hydrogen fuel cell + battery.
The article suggests 1,000kWh of energy storage, which may be a misprint. It is more likely the system maximum electrical power available. 8x100kW fuel cells plus a high capacity Lithium storage battery to boost to 1,000kW output power? (Williams F1 based technology?)
There is no detail of the hydrogen carrying capacity. Around 40kg/hr of hydrogen might be the maximum consumption at 60% conversion efficiency. Around 1% of the weight of a big Tesla inspired battery of similar energy capacity. And quick to refuel.
Great proof of concept. With all the talk from some places closer to home re the hydrogen economy we seem to be a little slow out of the blocks on this one. Worth noting the largest Ultra Class rear dumps typically have 2,000+kW power plants.
Trolley assist electric haul trucks have been around for quite a while using diesel/electric for travel between main ramps/roads to the loading and tiping points.
No argument from me that “subsidise” may not be a well-defined term. Is an exemption always a subsidy? Never a subsidy? Is a deduction a subsidy?
Can you see though that the sense in which you are applying “exemption” is a bit arbitrary? By excluding the excise from purely off-road vehicles, as now, that is an exemption?
Bottom line: The current rules are depriving consolidated revenue of billions of dollars as compared with collecting diesel excise from all diesel sold. Given the hit to the budget, the rules need justification.
That is a good question. If cars went all electric then there would be a big budget hole. OK for hypothetical discussions, otherwise if we ever reach that point and the government ever puts up such a proposal then there will be something concrete to discuss, criticise, …
When you buy fuel, you pay GST regardless of whether it’s electricity, petrol or diesel. So that is in a rough sense a tax on road user miles. You also pay GST on the vehicle. You also pay GST on the PV system if that’s the direction in which you go.
One hypothetical option would be to start taxing the income from PV panels but without allowing any deduction for the hardware cost.
GST is also how the states fund expenditure on education, health and everything else. Not such a direct connection as fuel excise or registration costs to roads. Where’s my birthday cake Mr Hewson?
Irrespective of how the Commonwealth plays with fuel excise tax income, it is now commonly promoted for road funding/safety and not other needs. Originally it was just another broad base tax on all users.
The airline industry is also subsidised to a similar extent as mining. There is only a token amount in excise on aviation fuel. ( $0.03556/l vs $0.423/l for automotive)
I would have said the reverse. It was originally intended (under other names, it has mutated a few times since its inception) as a user-pays tax for road users. Whether it is that now is hard to say.
It has some odd exemptions. The unpopular one brought up all the time is for miners who buy fuel for off road use. But so do farmers and nobody complains about them getting the exemption.
Another is government vehicles. Federal agencies that use vehicles on road pay the excise when they buy fuel for their vehicles but they get a refund back into their budget.
All I conclude from this is that no tax (or excise, or levy or whatever):
Perhaps I was a little rushed. It depends on which bit of history I was reading at the time, and which interpretation. I hold the popular notion that the excise is a tax on road use and gets misappropriated for other than road expenditure.
Happy to be corrected, as I note
A little dated this .gov.au seems to sum up or confuse how we got here. Mining, agriculture, etc were originally exempt from paying excise on diesel when it was introduced in 1957.
There have been customs duties on petrol since Federation, and excise on petrol since 1929 when the first oil refineries were established in Australia. Diesel excise was introduced for on-road use in 1957.
Successive governments have made numerous changes to how this outcome has been delivered.
Back on topic?
The observed parliamentary behaviour noted in the publication holds that fuel excise is now used as a tax and source of general revenue. A further note is that it’s value exceeds the Commonwealth’s contribution to the states for road funding, is inefficient and inequitable by numerous examples.
As solar generation and other replaces diesel and petrol the lost revenue stream will need to be replaced.
Hopefully for consumers by a solution that does not perpetuate the noted inequities and contradictions.
P.S.
The changes in how government has used the revenue from diesel excise also give rise to the arguments that mining should not be exempt. The original intent was to exclude all off-road use.
Wikipedia has a more modest view which does not reliably reflect the full history.
Just a comment on “double dipping” … for most of the entities affected in a major way by diesel excise there is no double dipping because they get the GST back anyway i.e. they are businesses that are registered for GST (like mining companies). As such therefore, if the excise rate went down with the introduction of the GST then that was a nice tax cut for the affected companies.
Regarding the purpose and use of the fuel excise, I stand by my original comment: Regardless of intentions, it is a relatively meaningless distinction. All tax raised by the Feds goes into Commonwealth consolidated revenue.
and the Wikipedia article comments that approximately 75% of fuel excise is not spent on roads (particularly as the Feds don’t have primary responsibility for roads anyway). So whatever the history of it is, it is just that. History. It is no longer relevant to the reality today. The reality today is that it is just another tax.
Yes, it will - but we are a long way away from that today. In a wild fantasy, you could imagine 100% CO2-free electricity by 2050, but that’s only stationary energy. Transport is a whole separate issue. If you can still buy petrol / diesel in 2050, I expect there will still be cars on the road doing so. As far as I am aware, Australia has no plan or target to phase out petrol / diesel vehicles (for private use, never mind about mining or other industrial / commercial uses).
In some locales solar can be so so. The following is published only for amusement. The blueish components are generated solar. The greyish peak is just where the ‘cursor’ parks, not anything to do with generation or consumption. It is a 24 hours view from Sat 11/7 in NE Melbourne. 730 watt hrs generated for the day. Today is not looking much better.
Nothing new in the thinking. The further you move away from the equator the steeper the ideal pitch for north or south facing panels. Some hard data from 2017.
In the Melbourne Docklands One example one point to note is vertical mounting does not require as heavy or rigid a panel as those typically used on residential roofing. The ridged storm resistant panels used in residential rooftop systems can also be installed vertically with appropriate racking. The Docklands design has been able to use a lighter type of panel. It’s not new technology according to the original Domain article.
