Fuel tax hike will send us broke, truckies warn

MATTHEW DENHOLM

NOVEMBER 17, 2019

The Australian

A massive hike in trucking taxes, being secretly considered by state and federal transport ministers, could send firms broke and increase the cost of groceries and other goods, the industry warns.

Transport industry associ­ations have told The Australian they are aware of plans to increase the Road User Charge, which already adds 25.8c to the cost of every litre of diesel used by heavy trucks.

The Queensland Trucking Association said it understood the hike, ending a three-year freeze on RUC rises, to be as much as 11.8 per cent over three years when combined with increases in the roads component of state registration charges.

“When you’re looking at companies on margins of about 4c in the dollar, an increase like this could well send a number of businesses to the wall,” QTA chief executive Gary Mahon said.

“It is three times the CPI for three consecutive years. It may only be 3c a litre but when you look at the consumption levels of our industry, that is big money.

“The second biggest bill a transport company gets is fuel, after wages. It’s a significant component of road freight, and there is nothing that happens in the economy that road freight does not underpin.”

He said the proposed tax hike would cost trucking companies an estimated $650m over three years, flowing through to consumers when contracts were renegotiated, or else forcing firms to cut jobs or close.

In an industry contributing to 8.6 per cent of the nation’s gross domestic product, this could have a disastrous further dampening effect on the sluggish national economy.

“One way or the other, the taxpayer is going to feel the difference,” Mr Mahon said.

The Transport and Infrastructure Council of state, federal and New Zealand ministers is due to meet in Melbourne this week to discuss the proposed tax hike.

Any commercial heavy vehicle weighing more than 4.5 tonnes pays the RUC, as well as state heavy vehicle registration charges, with proceeds used to fund road construction and maintenance. The federal transport minister can vary the rate and collects the diesel component of the charge, which was set at 25.8c per litre in November 2016.

Mr Mahon said the industry already paid its “fair share” towards road funding. This included via toll charges, which had grown in recent years to raise $1.5bn a year along the eastern seaboard alone, an amount equal to ­registration charges levied by all jurisdictions.

The industry believed increases in the RUC above inflation treated the sector as a “cash cow” and were unjustified and “intolerable”.

The national Australian Trucking Association has been in talks with federal Infrastructure and Transport Minister Michael McCormack, seeking to head off the plan.

ATA chairman Geoff Crouch, also managing director of Ron Crouch Transport, said trucking firms were already overcharged for their impact on roads.

“The projected over-recovery for 2018-19 was $189.5m, all money that trucking operators should have been able to use to employ more staff and buy new equipment,” Mr Crouch said.

“There is no justification for ­increasing the Road User Charge and registration charges.

“It’s a tax grab by the state and territory governments, and comes on top of dramatic increases in toll road and port access charges. The trucking industry simply can’t ­afford another tax hit.”

Mr McCormack’s spokeswoman said: “No decision has been taken on heavy vehicle road users. This is a matter for all states and territories to discuss at a ministerial council meeting next week.

“No changes will be made without extensive consultation with industry.”