Although last night’s federal budget announced a 22.1 cents per litre reduction in the fuel excise from today, industry has been quick to remind operators that the net benefit to trucking is considerably less.
Before today, operators were able to claim back the difference between the pre-budget excise rate of 44.2 cents per litre and 26.4 (the RUC component) in fuel tax credits (FTC).
But now the excise has been halved to 22.1, so the monthly or quarterly FTCs are also off the table for the next six months.
“The Government is not changing the existing RUC arrangements for heavy vehicles travelling on public roads, but the temporary reduction in fuel excise will provide a net benefit for heavy vehicle operators of 4.3 cents per litre [26.4 less 22.1] from 30 March, compared to current settings,” said a 2022-23 budget fact sheet.
Queensland Trucking Association CEO Gary Mahon doubts the fuel excise reduction will have much impact on freight rates.
But he does urge all operators to seek advice from an accountant about cash flow and to ensure they’re charging the right freight rates, fuel levies and/or surcharges.
“It does highlight the need for small businesses to talk to their accountant about what it means for upcoming BAS payments, and ask ‘what do I need to do to make sure I have the tax in the bank when I need it to pay the tax office?'” said another senior industry source.
“They do benefit in that they save 4.3c a litre, there’s no question about it, but it is a big change to the way they handle their cash for the next six months.
“They have to manage their customers’ expectations, and expectations that everyone has about this huge benefit [the fuel excise reduction] need to be wound back.”
The National Road Transport Association welcomed the excise relief but said the next step is for the federal, state and territory transport ministers to step up and cut the RUC.
“Smaller operators, in particular, are feeling the pressure of increased diesel prices,” said CEO Warren Clark.
“They’re struggling with constantly rising charges, a lumpy supply chain and sky-high fuel prices.”
Clark said the tax measure underlines that the mechanism for charging for road upkeep – and for providing relief – is hopelessly complex.
“It’s not just time to cut the RUC and provide real relief – the whole mechanism needs to be re-built from the ground up.”