Understanding the full effect of any RUC increases

RUC costs

With state and federal ministers considering an increase to the Road User Charge (RUC) for heavy vehicles in the near future it is very important to understand the full effect.

Local fuel prices have continued to climb as last week’s upward movement in international prices filtered through into the Australian market.

In addition, the continued impact of the fuel excise reinstatement is being felt at service stations.

When you consider Australian fuel prices over the last quarter, we had the international price peak in mid-June, the fuel excise adjusted upward for CPI in August, to 46 cents along with the removal of the Fuel Tax Credit (FTC).

With the reinstatement of the excise and FTC in September, the RUC is now being considered for increases by government while we also have significant increases in shipping costs, and a depreciating Australian dollar.

When accounting for any increase in the RUC heavy vehicle road freight is going to experience yet another significant increase to major input costs.

Consumers, who now pay the full fuel excise will also experience significant freight cost increases to an all time high as these major input costs have to be passed on for the road freight industry to remain sustainable.

For every increase in the RUC in real terms that means a decrease in your fuel tax credit. For example, if the RUC was increased by 6 cents per litre what that means is a 6 cents per litre decrease in your fuel tax credit.

When you consider in this country we build roads for cars and let trucks use them when can any justification be made that the RUC be increased any more than the indexation increase applied to the fuel excise.

The continuing review of the RUC over the years still has no transparency being offered about what the charge pays for or what specific priorities for road freight are being delivered on.

Below is a diagram illustrating the effect that with every rise that occurs in the RUC what that really means is a decrease in your fuel tax credit.

This continuing push to increase RUC well above indexation will indisputably eliminate or substantially reduce the FTC for road freight operators and will by necessity, be passed into cost of living increases for consumers.

The QTA along with other representative bodies are advocating hard for your interests on this issue and in the meantime talk to your local Federal MP’s to ensure the real effect on you as an operator is understood.

As  always, please contact me with any issues that you are experiencing or just for a conversation anytime.

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