Opinion: Stop using farmers as human shields for mining tax credits

The Federal Budget has come and gone. And predictably, the fuel tax credits scheme sailed through untouched — with farmers still being lumped in with mining companies as if we’re natural allies defending the same interests. We’re not.

I run a grain and livestock operation in Corrigin. Like most farmers, I use diesel.

We claim fuel tax credits because we genuinely need them while practical alternatives are not yet commercially available at scale.

While new technologies like autonomous electric tractors are being developed, agriculture doesn’t have the electrification options mining already has with its battery-electric heavy equipment.

Farmers are dealing with diesel cost increases driven by the conflict in Iran and volatile oil markets — this is on top of already tight margins caused by inflationary pressures, including significant increases in machinery and input costs.

The Government’s fuel security package addresses storage and supply, which is welcome.

But it doesn’t address the underlying problem: we’re providing billions of dollars annually in fuel tax credits for imported diesel while doing nothing to accelerate the transition to domestic energy sources.

Integrating electrified operations will improve efficiency and offset rising costs, while also improving energy resilience when coupled with renewable energy, not diesel. But farmers need support to make that transition.

I chair AgZero, which focuses on pathways to net zero emissions in agriculture. I spend a lot of time thinking about how farming adapts to both climate change and the transition away from fossil fuels.

The challenges are real. But I also spend time watching how these debates get framed, and who benefits from that framing.

When lobby groups talk about fuel tax credits, they often bundle “farmers and miners” together as regional Australia under threat from green policies. It’s a convenient fiction. In reality, our interests diverge significantly.

Farmers are experiencing the sharp end of climate change.

Here in Corrigin, over the last two decades we’ve seen a 15 per cent reduction in growing season rainfall, more severe frosts, and more seasonal variability. We adapt because we have to.

Meanwhile, coal mining operations alone receive more than $1 billion annually through fuel tax credits while extracting and selling the very product contributing to these changes.

But when mining companies defend their access to billions in tax credits, they hide behind us.

Mining receives 47 per cent of fuel tax credits — about $5 billion annually. Agriculture receives 12 per cent, spread across thousands of operations.

The rest goes primarily to transport and other industries. Since the scheme began, the mining industry has claimed $57.5b through these tax credits.

The Budget had an opportunity to address this. A $50 million cap on the scheme would have saved billions and only affected about 18 corporations. Not 18,000. Eighteen.

These are operations like BHP, which reportedly received around $600m in fuel tax credits in 2024 while posting around $10b in profit.

Not one farmer in Australia claims anywhere near $50m annually.

This reform wouldn’t have touched agriculture. And here’s the kicker — some of these mining companies can already operate at 80-95 per cent renewable energy.

They’re choosing to delay electrification while collecting tax credits, not because alternatives don’t exist.

The Government backed away from a gas export tax — even though the majority of Australians support a 25 per cent export tax on our gas resources.

That debate drowned out the fact they also chose to keep providing fuel tax credits for billionaire miners at the same time. Both reforms would have saved billions for the Budget and helped fund genuine climate adaptation.

The politics around this are predictable. The parties that are supposed to represent rural Australia have accepted significant donations from the mining sector — Hancock Prospecting, Santos, Woodside.

When their leaders talk about defending regional Australia, it’s worth asking which part of regional Australia they mean. And when mining billionaires are buying private jets for politicians, you have to wonder who’s really being represented in these debates.

Farmers don’t need to be opposed to all fuel tax credits to recognise we’re being used.

We don’t need to be anti-mining to notice our interests aren’t identical. And we definitely don’t need to accept being positioned as human shields for tax credits that overwhelmingly benefit operations that could afford to transition tomorrow if they chose to.

Here’s what would actually help: put that $50m cap back on the table for next year’s Budget.

Use those savings to incentivise farmers to electrify. The cap on mining tax credits could motivate genuine transition in that sector while freeing up resources to support farmers who want to invest in electric machinery but can’t afford the up-front costs without support.

I’d get an electric tractor tomorrow if the economics worked. Many farmers would.

I’m not asking farmers to oppose fuel tax credits. I’m asking us to stop letting ourselves be used to defend someone else’s.

Next Budget, we’ll hear the same arguments about how reforms would hurt “farmers and miners” as if we’re interchangeable. We’re not.

Our fuel use is a necessity we’re working to reduce. Theirs is a choice they’re being paid billions to make. It’s time to make that distinction clear.

Simon Wallwork is a grain and livestock producer in Corrigin, Western Australia, and chair of AgZero.