The trucking industry would be decimated if a new proposal from an academic think tank to dramatically increase the effective fuel tax on trucks succeeds, warns the Australian Trucking Association (ATA).
The Grattan Institute has today released a report on fuel tax and the fuel tax credits (FTC) system, Fuelling Budget Repair.
The report claims that the $8 billion a year in FTC given to businesses, including trucking operators, should be cut in half, to help repair the budget and reduce carbon emissions.
The institute is proposing that the current FTC for heavy on-road vehicles of 20.5 cents per litre (cpl) be removed, increasing the effective fuel tax rate to 47.7cpl. At present, trucking operators can claim back 20.5cpl on their business activity statements, which is the difference between the fuel excise of 47.7cpl and the road user charge of 27.2cpl.
ATA chair, David Smith says Grattan’s proposal would spell disaster for the trucking industry – and ultimately for consumers.
“There is no way that any transport business could survive this,” said Smith.
“Diesel is our biggest cost. We’re already fighting ridiculous fuel prices; this would be straw that breaks the camel’s back.
“Ultimately, our customers would have to pay the extra cost. But on the way through, many trucking businesses would fold. And costs in rural and remote areas would go up even more.
Smith said the effective fuel tax on trucks should be set to recover the cost of the roads we need, and not inflated by extra costs or poor state government spending decisions.
The Transport Workers’ Union (TWU) was also quick to rebuke the claims from the Gatton Institute.
The union warned that the short-sighted and dangerous calls to wipe out the FTC credit lifeline for truckies would send transport operators and owner drivers to the wall and cause more truck crash deaths.
The FTC scheme provides relief to operators and drivers on “razor-thin” margins, while wealthy retailers, manufacturers and oil companies at the top of supply chains squeeze transport contracts to bolster their bottom line, the union said in a statement.
The TWU believes that a sustainable transition to clean energy in transport must first address the ‘Amazon Effect’ of untrammeled commercial clout at the top of the supply chain and the gig tsunami “wiping out safe, fair and sustainable standards”.
“The prospect of tampering with – let alone halving – a fuel cost lifeline for our essential trucking industry in the current climate is as dangerous as it is ludicrous,” said the TWU national secretary Michael Kaine.
“This move would unfairly target operators and drivers battling razor-thin margins, under pressure to cut corners in safety to stay afloat. It would decimate operators and supply lines with deadly consequences in what is already Australia’s most lethal industry.”
Kaine said that last year proved that the removal of such credits under the Morrison government did not see increased costs absorbed at the top of the supply chain but inflicted upon those struggling at the bottom.
“We need long-term, practical and sustainable reform which recognises commercial reality, not the blinkered theoretical economic view which frankly is a fantasy,” he said.
“The solution to this is already in the works, with the federal government committing to set fair, safe and sustainable standards in transport, which will be introduced to parliament later this year.
“The Grattan Institute would find it is better placed to join the conversation here, after first listening to and understanding the industry.”
It’s the second time in recent months that the institute has earned the ire of the transport industry.
Just last August it floated a proposal to ban pre-2003 diesel trucks from Sydney and Melbourne within three years in a bid to reduce emissions.