FEDERAL BUDGET 2012: No change to diesel excise

Contrary to pre-budget speculation, and in a blow to solar PV sector, the government has kept the excise exemption in place for off-public road use of diesel.

The government has kept the exemption in place for off-public road use of diesel despite pre-budget speculation suggesting it would slash the scheme. As explained on Monday, if this exemption was removed it could stimulate a market for solar PV in Australia of over a gigawatt of capacity, worth around $3 billion.

It was always going to be a tough ask to expect that the government would take on both the mining and farming lobby in removing this tax break, when most of the diesel is used for transport for which there aren't alternatives.

For the PV sector a more realistic ask would be for the excise exemption to be removed for diesel used in power generation, although this would pose enforcement challenges for the Tax Department.

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