THE federal government has apparently dropped plans to axe the diesel fuel rebate.
Nationals Senator John Williams yesterday said he was confident the rebate would remain unchanged.
He said he had information from “people I won’t mention” that the rebate would stay.
Victorian Farmers Federation president Peter Tuohey said the move would spare farmers much financial pain.
He said it would have been disastrous if the 38.12-cent-a-litre rebate had been dropped in next week’s budget.
The rebate returns the excise to farmers and mining companies.
Treasury was considering axing the scheme to save $5.5 billion.
Mr Tuohey said the federation’s North East members were among “quite a few around the state”, who had expressed their concern.
“We’ve gone in fairly strongly to bat at VFF and National Farmers Federation level and I think the result has been pretty good.”
Mr Tuohey said it would have been a “fairly big issue” if the government had dropped the rebate in next week’s budget — “enough to get farmers heading in busloads to Canberra”.
He said economists and “other number-crunchers” didn’t understand the rebate.
“They think bigger farmers, the bigger diesel users, could afford a reduction,” he said.
“Bigger users could least afford it because their margins are much lower.”
It was reported yesterday that leaked correspondence between mining executives obtained by the ABC had warned there could be a “profound” political impact from cuts to the rebate.
Mr Tuohey said he believed the government had changed its rebate view a couple of times.
“We’re reasonably confident our rebate will remain,” he said.
“It would silly to talk about reducing red tape and making industry competitive and then adding an extra cost to make it uncompetitive,” he said.
Mr Tuohey said that was especially so, given the Prime Minister, Tony Abbott, had said agriculture was one of five pillars of the economy.