Fossil fuel subsidies in Australia Federal and state government assistance to fossil fuel producers and major users in 2021-22

As major flooding, exacerbated by climate change, hits eastern Australia and global calls to end fossil fuel subsidies grow louder, Australian governments continue to subsidise fossil fuel producers and major fossil fuel consumers. Government documents show that in the 2021-22 budget year, measures that wholly, primarily or partly assist the fossil fuel industry cost federal, state and territory governments $11.6 billion.

In other words, for every minute of every day in the 2021-22 budget period these subsidies cost the public $22,139. For context, $11.6 billion is 56 times greater than the $206.8 million budget of the National Recovery and Resilience Agency.

The Federal Government provides the most assistance to the fossil fuel sector, costing $10.5 billion in 2021-22. This is more than the $9.7 billion the Federal Government provides to support public schools. The largest Federal Government assistance measure is the Fuel Tax Credits Scheme, valued at $8.07 billion in 2021-22. Federal budget papers list it as the 16th largest cost in the budget, up from 18th last year. The Fuel Tax Credits Scheme costs more each year than Federal spending on childcare, the Australian Army or the Royal Australian Air Force.

In this paper, the estimates have been guided by the information that is available in official, public documents. Federal and state government budget papers, financial updates and annual reports of government-owned entities provide data on a range of government spending and other support measures to fossil fuel industries. In some instances, public announcements around these measures provide more detail than is contained in official documents and have been used in the estimates.

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