Trailer Magazine

ATA says fuel tax hike won’t affect freight cost

  • Posted on Wednesday 14th, May 2014.

The trucking industry’s reactions to the Abbott Government’s first budget have been widely subdued so far.

Following the announcement of the 2014 – 2015 Federal budget last night, the Australian Trucking Association (ATA) reassured transport operators that the reintroduction of fuel tax indexation would not lead to increased costs.

The reintroduction of fuel tax indexation, which has been frozen at 38.143 cents per litre since 2011, would see the fuel tax rate increase regularly in line with inflation.

However, under the Fuel Tax Act, heavy vehicle operators can claim back the full amount of tax that’s been paid, the ATA said. “As a result, the decision will not affect freight costs or grocery prices.”

ATA Government Relations Manager, Bill McKinley, explained: “Trucking operators whose trucks meet one of four environmental criteria can claim fuel tax credits on their business activity statements for each litre of fuel they buy.

“In other words, an increase in the fuel tax rate would result in a matching increase in the fuel tax credits operators can claim, unless the Government changed the act or increased the Road User Charge.”

ATA Chief Executive, Stuart St Clair (pictured), welcomed the Government’s decision not to change the fuel tax credits system.

“The Government’s decision is a win for the trucking industry. The fuel tax credits system helps reduce the cost of transporting freight and keeps our exporters competitive.”

Mr St Clair said the trucking industry more than paid its way on the road system through the road user charge and very high registration charges.

“Last year, the National Transport Commission (NTC, ed.) concluded that the truck and bus industries would be overcharged by $232 million in 2014-15. The Government’s decision not to increase the road user charge this year will reduce the level of overcharging, but we will still pay $200 million too much.”

According to VTA CEO, Neil Chambers, the Government effectively ignored the recommendations of the NTC to overhaul the anomalies in the current heavy vehicle charges calculation model.

As a result, the Road User Charge component of Fuel Excise will remain unchanged at 26.14 cents per litre in 2014 – 2015, despite opposition from the industry.

The ATA, together with the Victorian Transport Association, had called for a 1.04 cents per litre reduction, as was put forward by the National Transport Commission in November 2013.

ATA Chief Executive, Stuart St Clair, said the decision was disappointing but not unexpected.

He said the Government’s infrastructure investment package would at least deliver the roads the trucking industry will need to do its job as the economy grows.

“Australia’s road freight will almost double by 2030. The Government’s investment will make the roads safer and deliver improved productivity.”

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