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Fears grow for operators amid Fuel Tax Credit silence

Steve Shearer had etched July 1 in his calendar as a critical date for the industry to right the ship.

If the Fuel Tax Credit (FTC) wasn’t restored by that date, a nationwide survey by the South Australian Road Transport Association (SARTA) executive officer revealed that a staggering 8 per cent of road transport businesses would collapse.

Shearer now fears even more carnage to come – the same survey shows 57 per cent of operators won’t survive until the end of September, the date that the fuel excise tax of 44.2 cents per litre (cpl) is due to resume, and along with it the ability of operators to claim back 17.8cpl as an FTC.

Speaking at the National Road Freighters Association conference in Toowoomba at the weekend, Shearer told Big Rigs his biggest concern now was there was still no direct word from a federal minister about a solution.

SARTA executive officer Steve Shearer.

“And it really makes me worried that the bureaucrats have convinced the Treasurer to just wait to see what happens in July and take a let’s see if people pay their BAS approach, because most people are going to try to,” said Shearer, who has been at the forefront of lobbying for the FTC reinstatement since the Morrison government annulled the cash injection in the last budget.

“Well, coming up with the money in one quarter doesn’t mean you can come up with it in another when fuel prices are skyrocketing, truck prices have gone up by $40,000, wages have just gone up, superannuation has just gone up.

“Where the hell is the extra money going to come from because customers, by-and-large, are still not agreeing to offset the loss of the 17.8 cents fuel tax credit.”

Shearer said he wasn’t putting his faith in assurances from Senator Glenn Sterle at the conference that he’d been told by the Treasurer Jim Chalmers that the FTC would be reinstated by September.

“He’s got a commitment that it’d be back by the end of September, and that’s great, but I don’t take that for granted until I actually see the federal budget,” added Shearer.

Shearer’s confidence levels around an FTC resumption took another hit when he received a letter from Carol Brown, the new Assistant Minister for Infrastructure and Transport, two days after the conference.

In the letter sighted by Big Rigs, Brown acknowledges the strain the loss of the 17.8cpl rebate has put on operators.

“This measure was rushed through by the previous government without consultation, meaning businesses did not have time to adjust their arrangements and are therefore not seeing the benefits,” Brown writes.

“Upfront reductions in fuel costs have since been overtaken by further rises in fuel prices and pressure on freight rates.

“I also understand many operators rely on Fuel Tax Credits to offset the cost of their other tax liabilities, leading to difficult circumstances for many in the industry.”

But the only lifeline she could offer those feeling the strain was to alert Shearer to the fact the ATO is making interest-free deferral of tax payments more widely available.

“This can provide immediate help for those currently struggling with cash-flow difficulties,” she added.

Shearer, however, said that response only reinforces his concerns that ministers are only listening to bureaucrats who are still failing to grasp the full impacts of the fuel excise tax cut.

“I think it’s an outrage to suggest to industry that we’ll give you six months to pay your debt off. It’s a bloody debt we shouldn’t even have,” Shearer said.

“The point they’re missing is that most of the industry does not have bargaining power. Their customers see fuel prices drop by 22 cents, or at least an announcement of that reduction, and therefore they expect to see that reflected in a reduction in the rate.

“So, you pass on the full 22 cent fuel excise cut to the customer, and very few truck operators have managed to negotiate their way past that and offset the loss of the 17.8 cents [FTC].”

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