The mining industry is preparing to tell the Federal Government not to touch its fuel subsidy.

The scheme provides over $2.5 billion worth of tax breaks to the industry each year.

A Senate committee inquiry into the government’s Commission of Audit will discuss the future of the tax credit scheme today.

News Corp media outlet The Australian has reported that the Minerals Council of Australia’s chief executive tell the committee that describing the scheme as “fossil fuel subsidies” and demands that it be scrapped are both aspects of a “thinly disguised anti-mining agenda”.

“These claims persist despite clear, unambiguous, official evidence to the contrary — evidence from both the Productivity Commission and the Treasury,” reports say MCA CEO Brendan Pearson will tell the Senate.

“Every year, the Productivity Commission conducts an exhaustive analysis of industry assistance. In the most recent ... review, [it] concluded that budget and tariff assistance to the mining industry was negligible,” he will allegedly say.

The fuel tax credit has been subsidising off-road diesel users for sixty years, and currently covers agriculture, manufacturing, health services, construction, arts and recreation as well.

The newspaper reports that Mr Pearson intends to argue the scheme’s purpose is to cut the excise paid on a key business input, the same tax principle that on which the GST is based.

Pearson’s comments will come as the mining industry looks to gain a 6c-per-litre increase in its fuel tax credit, which it says will come if the carbon tax is abolished.

The carbon tax reduced the fuel tax credit by 6 cents a litre to price the carbon content in diesel.

Mr Pearson will reportedly tell the inquiry that Australia faces a clear budget repair challenge, “but equally we need to recognise that the means by which fiscal repair is achieved will have a major bearing on growth, investment and job creation,” he will say.