Industry fears are growing for the financial viability of many transport operators unless the Albanese government takes immediate steps to reinstate the fuel tax credit (FTC).
Steve Shearer, executive officer of the South Australian Road Transport Association (SARTA), said a new survey of members makes for sobering reading.
A staggering 57 per cent of the 250 respondents say they face financial collapse if the shelved tax credit, an unintentional bungle by former treasurer Josh Frydenberg in the last federal budget, is not restored prior to the scheduled September 30 resumption date.
Since the abolition of the FTC on March 30, 76 per cent of operators surveyed said they have not been able to offset its loss.
Shearer fears further repercussions for industry when trucking operators furnish their first quarterly Business Activity Statements next month.
That’s when truckies typically receive thousands back from the fuel tax credits, ranging from as little as $2000 up to $150,000 at a time.
“So, it’s a pretty clear message for the government, and that is, they can’t leave restoring the FTC to September 30 without doing a lot of harm,” said Shearer.
“So, they have to fix it before then. We’d prefer it to be fixed from March 30. In other words, the decision overturned.
“If they’re not going to do that, they have to at least end it on June 30 so we can get back to normal.
“That’s still going to harm about 3500 businesses [8 per cent of businesses told SARTA they still couldn’t survive if the FTC is restored from July 1].”
Shearer estimates that the cost of fixing the Coalition’s blunder is $350m for Labor, but said that’s a “drop in the ocean” when compared with what’s ahead if they don’t.
“Because when all the businesses that rely on trucking to move stuff, and that’s the vast majority of businesses, discover there aren’t enough trucking businesses to do it, a commercial pressure will force a skyrocketing escalation in freight rates as people desperately try and find somebody to carry their freight,” said Shearer.
“So, the Labor government should do what the Morrison government should have done, which is cut the fuel excise by 22 cents and fund that entire 22 cents themselves and restore the fuel tax credit to the trucking industry. That’s all they’ve got to do.”
In a welcome statement to new transport minister Catherine King, NatRoad chairman Scott Davidson called on King to make an immediate mark by addressing the decision by the previous government to cancel out the FTC.
“The inequity of motorists receiving a 22.1c per litre reduction in fuel price at the bowser and heavy vehicle operators receiving an effective 4.3c cut is obvious,” said Davidson.
“The full impact on cash flow of the loss of the Fuel Tax Credit, however, is only now becoming apparent as quarterly Business Activity Statements fall due.
“NatRoad wants the Albanese Government to reinstate the Fuel Tax Credit immediately.
“Failing that, we want other relief measures given to the industry along with an undertaking that it will be restored at the end of the period of the halving of excise.”
The Australian Trucking Association (ATA) wrote to former prime minister Scott Morrison in early May asking the government to retrospectively restore the FTC from March 30 if it was re-elected.
Shearer said the letter had been ignored by the Coalition despite several approaches for a response from former finance minister Simon Birmingham.
ATA chair David Smith told Big Rigs that with quarterly BAS payments looming, the first since the FTC was shelved, he worries that many operators will be in for a rude awakening.
“I am genuinely concerned for those people who are going to have to effectively pay their BAS without any form of offset by the fuel tax credit,” said Smith.
“In other words, they’re going to have to find the money out of cash flow, and that does concern me.”
Big Rigs has approached the office of treasurer Jim Chalmers for comment.