$19BN Budget free kick for fossil fuel industry

The Climate Council

FOR IMMEDIATE RELEASE

MAY 12 2026

$19BN Budget free kick for fossil fuel industry

Fossil fuel multinationals get a massive free kick in this year’s Budget, while Australians are left exposed to global energy price spikes and climate harm.

Maintaining more than $19 billion in annual fossil fuel subsidies and foregone gas tax revenue, the Budget ignores major opportunities to expand clean energy solutions that shield Australians from global fossil fuel chaos.

YouGov polling shows most Australians want the government to invest in expanding renewable energy solutions over fossil fuels to secure our energy future, and support household measures to electrify homes and transport.

Climate Council CEO Amanda McKenzie said:

“This Budget maintains the $19 billion gravy train for big fossil fuel corporations. That is $19 billion in the wrong direction, keeping us tied to foreign oil, rather than supporting the expansion of renewable energy solutions that Australians want to deliver a safer, cleaner, more secure energy future.

“People all over the country are clamouring for a broadscale shift to cleaner, more secure solutions like rooftop solar and electric vehicles, which give us control over our own energy. Unfortunately, this Budget leaves too many Australians wanting.

“If the government is serious about intergenerational fairness, the Budget must address not just housing but climate harm landing on young people. We can’t secure young Australians' futures while expanding coal, oil and gas.

Climate Council Councillor Nicki Hutley said:

“This Federal Budget includes serious tax reform to deal with the housing crisis, but a patchwork of fossil fuel subsidies and short-term handouts that keep us dependent on fossil fuels from volatile regions.

“The Government could have done much more to expand clean energy and electrification, which can deliver lasting cost of living relief and energy security, while reducing climate pollution.”

Budget Snapshot: Key energy security and climate measures

Powering progress	$200 million in support for active transport, with the hugely popular Active Transport Fund to receive $50 million each year. $140 million to deliver the roadmap for household energy resources – like solar, batteries, and EVs. Support for renewables, electrification and cutting climate pollution maintained, but opportunities to expand missed.
Budget missteps	Diesel tax-breaks – a fossil fuel subsidy – will grow to a cost of almost $13 billion per year ($47 billion over the forwards). Capping the rebate could have saved more than $2.5 billion per year, but only impacted the 18 resources companies who claim more than $50 million per year. $10 million for a refinery feasibility study, despite new refineries clearly failing to stack-up. $4.9 million to “support gas investment” by modernising offshore resources regulation could support more polluting projects, increasing climate harm.
Missed opportunities	$10 billion to add just 10 days’ fuel storage, while missing opportunities for investments in lasting energy security – including no investment in electrifying the trucks and heavy machinery that use most of Australia's diesel. e.g. A $3bn investment over 5 years could have deployed 30-50,000 new electric trucks and displaced up to 1 billion litres of diesel annually. Gas export taxes remain unchanged, despite analysis indicating an improved gas export levy could generate $17 billion annually, representing upwards of $50 billion in foregone revenue over the forward estimates – funding that could instead support cost-of-living relief and energy security. A $2.5 billion greater-than-expected disaster relief bill due to escalating climate disasters. No meaningful investment to adapt to the increasingly frequent and severe climate-fuelled disasters driving these costs.

1. Annual total of $19 billion reflects $2.5 billion in fuel tax credits, and an estimated foregone gas export tax revenue of $17 billion.

2. Budget Energy Priorities Poll, YouGov, commissioned by the Climate Council and The Sunrise Project, April 2026. (n. 1501, 18+ nationally representative.)

ENDS

Spokespeople available:

Climate Council CEO Amanda McKenzie
Climate Council Councillor Nicki Hutley

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