THE federal government gives just over $4 billion in direct subsidies to mining companies each year, mainly in the form of cheap fuel and tax breaks for building roads and railways, a report by the Australia Institute think tank said.

The biggest single subsidy passing from the general public to miners comes in the form of fuel-tax credits, formerly named the diesel fuel rebate, which were valued at $1.89 billion in 2009-10, the institute's report said.

Pay dirt ... mining companies receive more than $4 billion in direct subsidies each year. Credit:Louie Douvis

''In January, we had a big debate about what the $500 million we gave to the car industry said about the Australian approach to industry assistance, so it seems bizarre that we are yet to have a debate about the billions a year we give an industry that is growing so fast,'' the institute's executive director, Richard Denniss, said of the subsidies.

The report, commissioned by the Australian activist group GetUp, is designed to put pressure on the federal government to cut subsidies as part of its savings drive ahead of the budget next month. The government is contemplating trimming the fuel rebate.