Policy Proposal: Fuel Excise Relief Scheme (FERS)

Objective: To provide targeted relief on fuel excise for farmers, tradies, and farmhands, reducing operational costs for primary producers and essential tradespeople in rural and regional Victoria.

Key Components of the Policy

1. Fuel Excise Rebates:

   • Farmers, tradies, and farmhands are eligible for a 50% rebate on fuel excise for work-related use, including agricultural machinery, farm vehicles, and trade tools of the trade.
   • The rebate applies to diesel, petrol, and alternative fuels like biodiesel used in eligible work operations.

2. Eligibility Criteria:

   • Open to:
     • Registered farmers for agricultural activities.
     • Licensed tradespeople for work-related transport and machinery.
     • Farmhands using personal vehicles for work travel (with employer verification).
   • Applicants must operate in regional or rural areas and demonstrate that fuel use is directly tied to primary production or trade activities.

3. Enhanced Rebates for Sustainable Practices:

   • Additional 10% rebate bonus for businesses or individuals transitioning to fuel-efficient or low-emission vehicles.

4. Simplified Application Process:

   • Farmers and tradies can claim rebates quarterly through a streamlined digital portal linked to the Australian Taxation Office (ATO).

5. Cap on Personal Use:

   • Fuel used for non-work-related purposes is excluded, ensuring the program targets essential business activities.

Policy Rationale

1. Reducing Operating Costs:

   • Fuel is a significant cost for farmers and tradespeople in rural areas, where public transport is scarce, and long-distance travel is often required. Rebates directly alleviate financial pressure.

2. Supporting Food and Supply Chains:

   • Affordable fuel ensures the uninterrupted production and transportation of food and goods, stabilizing supply chains and prices for consumers.

3. Economic Equity for Rural Areas:

   • Farmers and tradies in rural Victoria face higher operational costs due to fuel prices. A targeted rebate addresses this disparity, supporting regional economies.

4. Encouraging Sustainability:

   • Bonus rebates for fuel-efficient vehicles incentivize sustainable practices, aligning with long-term climate goals without compromising productivity.

Implementation Strategy

1. Collaboration and Oversight:

   • The federal government to coordinate with the Victorian Department of Transport and regional trade organizations.

2. Funding Allocation:

   • Allocate $300 million annually for excise rebates, with a review every three years to adjust funding based on economic conditions and demand.

3. Outreach and Education:

   • Launch awareness campaigns through farmer associations, trade organizations, and regional councils to ensure widespread participation.

4. Monitoring and Compliance:

   • Introduce a digital fuel-use tracking system to prevent misuse and maintain transparency in rebate claims.

Potential Benefits

1. Lower Operational Costs: Farmers and tradies can reinvest savings into their businesses, boosting productivity and service capacity.

2. Economic Growth: Reducing costs for key sectors fosters rural economic stability and growth, ensuring these communities remain viable contributors to the state's economy.

3. Sustainability Incentives: Encouraging fuel-efficient technology adoption reduces environmental impact while maintaining operational efficiency.

4. Strengthened Workforce: Affordable fuel supports mobility for farmhands and tradies, ensuring access to job opportunities across regional Victoria.

This policy acknowledges the critical role of affordable fuel in regional productivity while supporting sustainability goals and providing equitable economic relief for essential rural and trade industries.