Redirecting Fossil Fuel Subsidies to Food Security and Regional Resilience
Australian Prosperity Institute Editorial
Jesse J. Fleay, Editor-in-Chief, Research and Policy
Ethan Urch, Director, Media and Strategy
Every year, Australia pours more than $11 billion into subsidies and tax breaks for fossil fuel companies. It is a figure that rarely makes front-page headlines, but it quietly shapes the national economy, propping up industries whose global future is increasingly uncertain. The question emerging among economists, policymakers, and even farmers is a simple one: what else could we do with that money?
Australia’s prosperity is at risk
The world is shifting away from coal and gas. Major trading partners are committing to decarbonisation, investment markets are tilting toward renewables, and long-term demand for fossil fuels is narrowing. Yet taxpayers continue to underwrite their production.
Critics of the current system argue this is not just poor economics but misplaced priorities Australians cannot eat coal and gas, at the end of the day, and that coal and gas is increasingly being replaced by more land and resource efficient energy sources and practices, leaving more space in regional Australia, and investing in the climate struggles of future generations.
The COVID-19 pandemic revealed the fragility of global supply chains, and geopolitical shocks. From Russia’s illegal war in Ukraine, to shipping disruptions in the Red Sea, current tensions have reinforced a hard truth: reliable, affordable, and sustainable food supply is a national security issue, as critical as defence.
The idea on the table is not simply to swap subsidies from one sector to another, but to economically equip them for transformation. A phased withdrawal of fossil fuel subsidies over a decade could redirect billions into:
Advanced farming and research, developing climate-resilient crops, precision agriculture, and low-water systems tailored to Australian conditions.
Regional infrastructure, upgrading roads and logistics that link farms to processing hubs and markets, easing pressure on both producers and consumers.
Sustainable food systems, backing regenerative farming, water-smart irrigation, and circular economy projects such as waste-to-fertiliser or on-farm bioenergy.
Such measures will not just boost productivity but shield regional communities from the ‘boom-and-bust’ cycle of tired systems of resource dependence.Farmers are no strangers to volatility in Australia. From droughts to price shocks, the challenges of producing food in Australia are far less predictable than the old almanacs once allowed. For the many, the idea of government support redirected their way is less about ideology and more about survival.
When the trucks stop, shelves go bare
Unsurprisingly, the proposal faces resistance. Fossil fuel subsidies are deeply entrenched, tied to jobs, royalties, and lobbying power. Industry advocates warn that cutting them too quickly could destabilise energy markets and regional employment. Australian Prosperity Institute wants to hear from any Australian, from any community or industrial perspective, including local business owners, farmers, and agriculturalists to set the record straight.
When the trucks stop, the shelves go bare. Without vital products delivered to growers and manufacturers, it is not only larger businesses that suffer noticeable hits: small businesses are hit far worse, and cannot serve their communities if they have no coffee beans, grains, milk, sugar, or eggs to make breakfast with the best local products.
The government must invest in secure and resilient food systems. These sustainable foods are not an ethical luxury, they are a source for prosperity in the future. From farm to plate, fresh foods keep Australians fed, and regional leaders must continue to demand the nation’s support with the pressures their fellow Australians are facing daily.
Regional leaders see another advantage in their role in shaping Australia’s prosperity for their descendants: decentralisation. Strengthening food-processing towns and its critical regional infrastructure will ease the population squeeze in capital cities, creating opportunities where young people are often forced to leave in search of work.
The government should investigate the potential of regional partnerships to attract small businesses to agricultural regions. Not only are locals supported by more local and independent options to source goods and services, internal and international tourism can be drawn to regions throughout Australia, with our national produce and proud products on show for the world at our airports, and through news and tourism campaigns.
The Australian Prosperity Institute and its supporters counter that a managed transition–gradually winding down fossil subsidies while scaling up food and farming investment–is a win for the whole community. This managed transition will future-proof regional economies while providing the safety net for communities currently reliant on coal and gas.
The bottom line
Ultimately, the debate circles back to a matter of values and security. Should taxpayer money continue to underwrite industries with limited future demand? Or should it be redirected toward the food on our tables and the resilience of regional Australia?
The conversation is not just about economics, it is about sovereignty, survival, and the story Australia tells itself about its future. Investing in food and farming is not the mere charity of the state, but insurance for every Australian. Funding regional resilience is nation-building. And it’s what will keep Australia strong through our volatile world and its less-predictable markets.
