Opinion

Essential businesses still hard-hit

More than a third of trucking businesses are still impacted by coronavirus challenges, facing reduced demand and reduced cashflow. In an industry that keep our country moving, many are still hard-hit.

Every single Australian has been impacted by the pandemic at some point, but the one thing that has remained constant is the effort of trucking businesses across the country working hard on the frontline to keep communities supplied and connected.

Whether it be keeping our petrol stations fueled, supermarkets stocked, or online orders delivered to our doors, the trucking industry has kept Australia moving.

To help businesses recover, truck charges were frozen for the 2020-21 period – a move that was warmly welcomed by industry. The Australian economy is recovering from the sharp recession caused by the pandemic – but it is still recovering.

The transport and logistics sector’s contribution to the economy declined 16.8 per cent through the year to the December quarter 2020, despite an end of year rally as rural operators transported the second largest grain crop on record.

Earlier this year, the National Transport Commission released its 2021-22 heavy vehicle charges consultation report, recommending that truck charges should increase 2.5 per cent. This recommendation is consistent with the approach that ministers originally agreed to adopt for 2020 21, based on an inflation forecast from May 2019.

However, what has changed since 2019 are the economic outlook and the outlook for trucking businesses and their customers. The government proposal would see charges rise by substantially more than inflation and more than many trucking businesses can afford.

Treasury’s inflation forecast for 2021-22 is 1.5 per cent.

In a submission in response to the NTC report, the ATA recommended that governments should not increase charges by more than expected inflation rate, a move that would save small trucking businesses hundreds of dollars a year.

In a time where Australia’s hardworking trucking businesses, many of whom are small or family-owned, are facing hardship, we must see measures that reflect the current financial environment. 

In a survey of Australian trucking businesses in February – March 2021, the ATA found more than a third of trucking businesses reported that activity was still down compared to immediately before the bushfires and the start of the pandemic.

The survey also told us that many businesses continue to have limited ability to pass on registration charges and changes in the fuel price, including changes in fuel tax credits.

“It is near impossible for me to pass on costs as I don’t set the rates as a subcontractor. It’s either take what’s offered or go without,” one non-employing survey respondent said.

Another said: “Being a very small family business, increasing our costs to customers increases our chances of losing those customers indefinitely to bigger companies who have the ability to undercut our prices”.

Larger businesses told us they had more ability to pass on costs, but that the market was still very difficult: “If we are lucky, we can review our rates on an annual basis to cover CPI increases,” one business said.

From owner-drivers to those with hundreds of employees, they are seeing reduced demand and reduce cashflow. While the recovery effort continues, there is still more to be done.

Our submission also argued for measures to make charges fairer and more affordable, and improve the cashflow of businesses. We need action against payment times longer than 30 days, the extension of price regulation to truck tolls and port access charges and changes to allow businesses to pay truck registration charges by monthly direct debit.

Trucking is essential to our economy, our lifestyle and services all industries from construction through to agriculture and retail. That’s why it is vital these essential businesses continue to receive the right support.

To view the ATA submission, head to www.truck.net.au

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