March 31, 2022
Katter’s Australian Party (KAP) candidate for Herbert, Clynton Hawks, is describing the federal budget’s failure to scale back heavy vehicle road user charges in line with cuts in fuel excise as a kick in the guts to an industry already on its knees.
Mr Hawks said challenges such as skyrocketing diesel and fuel additive Adblue prices, as well as the ongoing driver shortages, are already forcing some operators out of the industry, whose trucks now sit idle instead of turning a wheel.
Mr Hawks said at the very best, the lack of budget relief for transport operators will mean higher prices and shortages of goods on the supermarket shelves, as the impacts of fewer operators and higher operating costs get baked into the supply chain.
“The fuel excise cut will not translate into lower operating costs and higher net income for operators because it wipes out the fuel tax credit.”
Road user charges (RUC) of 24.6 cents per litre (cpl) apply to all heavy vehicles, including trucks and buses, which use public roads.
In turn, operators can claim a fuel tax credit (FTC) on the difference between the fuel excise tax—which prior to the budget was 44.2 cpl—and the RUC.
With fuel excise now at 22.1 cpl—that is, below the RUC—operators will no longer be able to claim a FTC.
It is standard industry practice for operators to use that tax credit to offset their quarterly GST payments in their BAS. With that now gone, trucking operators will need to find that cash elsewhere, inevitably by increasing their freight charges.
“Every extra cent an operator spends to turn a wheel gets multiplied ten-fold as it rattles through the supply chain.
“The budget’s cost of living ‘sugar hits’ will melt away as the affect of higher transport costs hit home.
“The federal budget, in ignoring the plight of the transport industry, has negated its own efforts at trying to make life more affordable for average Australians.”
As a transparency measure, Mr Hawks said trucking operators have been charging customers a fuel levy on top of their usual freight rates since diesel prices started to rise late last year.
With fuel prices falling as a result of the excise cut, customers will assume the fuel levy will fall as well.
However, Mr Hawks said because the expected drop in fuel price is a result of an excise cut which doesn’t ultimately benefit heavy vehicle users, they will be caught between a rock and hard place, under pressure to reduce their fuel levy to reflect lower fuel prices despite the fact that lower fuel prices are negated by the existence of the road user charge.
“And heaven help us if the oil companies decide to pocket that 20 cents a litre instead of passing it along to vehicle operators.
“The bottom line is that the excise cut brings no relief to trucking operators, and if anything has made making a buck in that business even harder.”