Opposition Leader Peter Dutton has failed to win any early friends in the road freight industry with his budget reply announcement that he’ll halve the fuel excise for 12 months, without a corresponding reduction in the Road User Charge (RUC).
If the Coalition is successful at the polls on May 3, operators are now facing a year without the ability to claim any Fuel Tax Credits (FTCs).
At present, operators can claim a rebate of 20.1 cents per litre (cpl), being the difference between the 50.6 cpl fuel excise rate and the current RUC of 30.5 cpl.
When the fuel excise rate is lower than the RUC, they can’t claim any, as was the case after Scott Morrison’s much derided 2022 budget that sent some operators to the wall.
The National Road Transport Association (NatRoad) said today that FTCs must remain during any temporary reduction in fuel excise, to ensure the benefits of lower excise are felt by all road users.
“Under the former Coalition Government, the decision to halve fuel excise also meant the suspension of Fuel Tax Credits. This wiped out the benefits of the tax cut, throwing cashflow for small road freight businesses into crisis,” said NatRoad CEO Warren Clark.
“We welcomed the restoration of Fuel Tax Credits under Labor back in 2022. The Coalition must now commit to protecting Fuel Tax Credits in full.”
NatRoad said the road freight industry is under significant cost pressure and can’t afford another hit to FTCs.
“Diesel, maintenance, vehicles and wages all continue to climb while major transport customers continue to push for lower freight rates,” Clark said.
“About 98 per cent of the road freight industry consists of small businesses. Average profit margins are just 2 per cent.
“Small trucking businesses lack the economic bargaining power to simply pass on higher costs. Fuel Tax Credits have a heavy impact on cashflow management.”
Clark said that unless FTCs are protected for the duration of the policy, the benefits of lower excise will not flow on to small trucking businesses.
“Instead, many in the industry that keeps Australia’s shelves supplied could face financial ruin.”
North Queensland operator Clynton Hawks, a one-time candidate for the Katter Australia Party in Queensland, said it’s imperative that the Coalition also halves the RUC, alongside the reduction in fuel excise.