Road user charge increase confirmed for next three years

Australia’s transport ministers have agreed to set heavy vehicle charges for a three-year period, to “help provide some certainty to industry.”

Starting from July 1, charges will rise by six per cent each year, said a communique today (May 8) from the Infrastructure and Transport Ministers’ Meeting.

“This level of increase is considered by ministers to strike the right balance between the need to move back towards cost-recovery of the heavy vehicle share of road expenditure and the need to minimise impacts on this vital industry,” the statement added.

Gary Mahon, CEO of the Queensland Trucking Association, said it’s yet another cost for the industry to absorb, but in the current budget environment it’s the best result that could have been expected.

“We were always going to have an increase imposed upon us, but when you take into account other increases, and the fact that the excise is indexed as well, overall it should mean the fuel tax credit remains relatively similiar, and that’s a good answer for the industry.” said Mahon.

Mahon stressed however, that all of the increases, at some point, will flow through to cost of living.

“When it comes to fuel it’s the second biggest cost for industry and where increases are applied, they [operators] have no option but to pass that through.”

Mahon concedes that the increase could have been a lot worse – a figure as high as 10 per cent had been discussed – and that the 6 per cent will afford operators some level of confidence with planning.

But he’s not sure that the 6 per cent is an accurate reflection of the heavy vehicle share of road expenditure.

“That’s a statement being made by ministers. We just have to accept that statement at face value.

“We would feel more reassured about that if there was a proper level of transparency about the costs that are being attributed to our industry.”

Warren Clark, CEO of the National Road Transport Association (NatRoad), said the increase was unconscionable and would sound the death knell for some operators, many of them reportedly running on a profit margin of just 2.5 per cent.

“This is a cruel blow to operators already under extreme stress who are desperately trying to stay viable,” said Clark.

“In February, NatRoad called for a freeze on charges next year and for increases in the two financial years after that to be limited to 2.75 per cent.

“We note that the ministers say they’ve struck ‘the right balance’ between cost-recovery of and the need to minimise impacts on a vital industry.

“In effect, they’ve given a final push to those businesses that are already teetering on the edge.”

Clark said the RUC will increase from 27.2c a litre to 28.8c in 2023-24, jumping to 30.5c and 32.4c in the years after.

Registration costs for a 6-axle articulated truck will go from the current the $6,530 (2022-23) to $6872 (2023-24), and then to $7236 and $7621.

[Update: 1.30pm]

Peter Anderson, CEO of the Victorian Transport Association, said the 6 per cent increase clearly shows the “inflation genie is still at work” putting upward pressure on prices of goods and services in the economy.

“While on the one hand it is disappointing ministers went against the advice of the transport industry for a more measured 2.75 per cent increase, the provision of future increases over three years does provide some certainty and will assist operators in setting realistic prices,” said Anderson.

“It’s encouraging that inflation appears to be falling but the increase confirms higher prices will be with us for some time, and its essential freight operators pass these price rises through the supply chain and onto freight customers and consumers.”

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