Trucking bosses fire off warning to PM over fuel tax credit bungle

Australia’s peak trucking bodies have co-signed a hard-hitting letter to Prime Minister Scott Morrison asking for a commitment to restore the fuel tax credit from March 30, if re-elected on May 21.

Writing on behalf of all the Australian Trucking Association’s member organisations, chair David Smith said the budget night decision to reduce prices at the pumps has produced an unintended consquence that threatens the viability of 53,000 trucking businesses and the economy.

“Truck operators rely heavily upon the tax credit when completing their business activity statements,” writes Smith in a copy of the letter obtained by Big Rigs.

“It has been an integral component of truck operators’ business model for decades. That model incorporates the certainty of the return of a significant amount through the tax credit. They then offset the tax credit against a substantial portion of their business activity statement obligations.

“The loss of the tax credit can not be absorbed by truck operators, large or small. Operators who cannot replace or offset those funds will inevitably collapse in the coming months.

“There are already growing reports of business closures. Operators are realising that they will not survive the next 6 months due to the loss of the tax credit.”

Smith said the stress and concern regarding loss of the tax credit was palpable among the 500 operators at the ATA’s conference on the Gold Coast last week.

“The vast bulk of the industry comprises small operators,” said Smith.

“They are price takers and have no capacity to offset the loss of the fuel tax credit. Many of the largest fleets are reliant upon those small operators as integral to their operations.

“The fuel tax credit is a significant component of trucking’s established business model. Even large fleets are at risk if they are unable to renegotiate their contracts. Their contracts generally impose strict and inflexible controls over movements in freight rates and fuel levies.”

ATA chair David Smith addresses delegates at the national conference on the Gold Coast last week.

Smith said the food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax credit.

“They can only do this through increased rates or a new fuel tax credit levy or other mechanisms. Unless this is resolved, it is estimated that this will add $20 per week to the average household’s food bill. This will negate the cost of living relief which the Government sought to provide.”

He goes on to say that restoration of the fuel tax credit, retrospectively from March 30, 2022, will deliver two very positive outcomes for the broader community and the economy:

  1. Save $20 per week on the average household food bill, preserving the cost of living relief; and
  2. Ensure viability of the truck industry and its ability to underpin the economy. This includes supplying the community with their daily goods, from toilet paper to food and clothes.

Smith also asked for an urgent meeting prior to the May 21 federal election to “discuss and resolve this issue.”

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