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Restore fuel tax credits or operators will go bust, says SA boss

Steve Shearer, executive director of South Australian Road Transport Association, fears many operators will go broke unless the federal government restores the fuel tax credit (FTC) option to their arsenal.

In a strongly worded statement on SARTA’s Facebook page today, Shearer said this week’s federal budget announcement that the diesel excise will be cut by 22.1 cents for the next six months is a poisoned chalice for operators.

They may save money at the pumps, but for an operator with say 30 rigs on interstate work he argues it will actually mean a loss of $532,000 in FTCs.

The FTC is the difference between the usual excise rate of 44.2 cents per litre (cpl) and the road user charge (RUC) for heavy vehicles of 26.4 cents per litre.

The budget announcement shelved that option for the next six months, with the government telling industry it now had a net gain of 4.3 cents as a result – 26.4 less 22.1 – but Shearer said that’s just political spin.

“We will see empty shop shelves and hundreds of collapsed truck companies within months if this is not fixed,” said Shearer.

Shearer’s argument is that many customers will have seen the budget night excise relief and think they don’t need to shoulder transporters’ costs in the form of freight levies.

In fact, he believes many customers will demand a reduction in levies as a result.

His solution is to call for the federal government to also reduce the RUC by the same amount as fuel excise, thereby preserving the fuel tax credits.

“If the federal government does not reduce the RUC, the only options for the industry are to either not pass on the 22cpl reduction in excise to customers, or to increase freight rates.”

Queensland Trucking Association CEO Gary Mahon believes it would be a fair call to reduce the RUC for the road freight industry by 50 per cent, the same that Treasurer Josh Frydenberg did for the general motorist at the pumps.

That would take the RUC down to 13.2 cents per litre, which would then reintroduce FTC of 8.9 cents per litre for the next six months.

“There’s a 50 per cent reduction for the general motorist, why not a 50 per cent reduction for road freight? said Mahon.

“That way, I think it simplifies the understanding.”

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