The Minerals Council of Australia says a proposal by the Greens to remove the diesel fuel excise rebate for miners would amount to a 'super tax' on northern Australia.

In its submission to the Northern Australia White Paper, the Council singled out the proposal which the Greens claim amounts to tax payers 'subsidising the mining industry'.

The diesel fuel excise, which is 36 cents a litre, was introduced in the late 1950s as a way of raising money for public road building and maintenance. Listen Duration: 4 minutes 12 seconds 4 m 12 s Listen Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Minerals Council says Greens proposal to remove diesel excise rebate a 'super tax' on northern Australia ( Babs McHugh ) Download 1.9 MB

Miners, farmers, the fishing industry and remote Indigenous communities have that returned to them, as they don't use public roads and have to generate their own power using diesel generators.

The rebate has long had the bipartisan support of the major parties.

Minerals Council CEO Brendan Pearson says miners shouldn't have to keep responding to the claim by the Greens that the rebate is a subsidy

"It's like saying that a non-smoker is getting a tax subsidy because they don't pay tobacco excise.

"It's not a subsidy, Treasury says it's not a subsidy, the Productivity Commission says it's not a subsidy.

"The only people saying it are the Greens."

In a 2011 submission to the G20 Energy Expert Group, Federal Treasury stated: "Fuel tax credits are not a subsidy for fuel use, but a mechanism to reduce or remove the incidence of excise or duty levied on the fuel used by business off-road or in heavy on-road vehicles". Listen Duration: 4 minutes 53 seconds 4 m 53 s Listen Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Greens hold the line that diesel fuel rebate for miners is a 'subsidy' ( Babs McHugh ) Download 2.2 MB

However, Greens Senator for Western Australia Scott Ludlum dismisses Treasury's statement and says there is nothing in the legislation to say the money is used for road maintenance, and that it goes back into consolidated revenue.

"Choose whatever words you like. It's a tax break. By another name, it's a subsidy.

"In plain language, it's a handback to an industry that can afford to pay it."