The coalition government has reportedly avoided a clash with the powerful mining industry by reassuring them it won't touch the diesel fuel rebate in the budget.
Letters obtained by the ABC show the government faced a potentially damaging fight with the nation's biggest mining firms on plans to cut the 38 per cent rebate, worth $2.4 billion over the next financial year.
Leaked correspondence between top mining executives warns of a "profound" political impact from cuts to the rebate, greater than that faced by Labor with the mining tax.
A spokeswoman for Treasurer Joe Hockey told AAP the government would not comment on budget speculation.
But he's given an assurance that the government would not touch the rebate in its first budget, the ABC reports.
NSW Nationals Senator John Williams was confident the rebate would stay.
"Information has been given to me ... by people I won't mention," he told ABC radio on Monday.
Senator Williams said the rebate was essential for farmers and any changes would push some into bankruptcy.
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