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ATA Chairman appointed to Tax Forum

26 August 2011

The Chairman of the Australian Trucking Association, David Simon, has been appointed to the Australian Government’s Tax Forum, to be held in Canberra on 4-5 October.

The Government has invited 184 representatives of the community, business, unions and government, as well as academics and other tax experts, to attend the forum, which will debate priorities for reforming Australia’s tax and transfer system.

The forum will consider road charging and other environmental and social taxes on the afternoon of 4 October.

Mr Simon said he would argue for the ATA’s plan to reform the way trucks are charged for their use of the road system.

“At present, trucking operators are charged through an effective fuel tax of 23.1 cents per litre, as well as very high registration charges. For example, the registration charge on a nine-axle B-double is $15,708,” Mr Simon said.

“There are three problems with the existing system. Registration charges are very high, and small operators have difficulty managing their cashflow to pay them. The charges are fixed, so they don’t vary with the distance trucks travel, and there is no link between where operators use their vehicles and road funding.

“The solution in the short term is to rebalance registration charges to remove the disadvantage faced by operators using B-doubles. B-doubles can carry more freight and have a better safety record than conventional semitrailers.

“As a longer term measure, the ATA has proposed moving to fuel based charging. This would collect the same amount of money as the existing system, but would see truck and trailer registration charges reduced to about $400.

“The effective fuel tax, or road user charge, would be increased to compensate for the reduction and would be levied on trucks at two separate rates, depending on their size. There would be a special fund so local councils and other road asset managers could upgrade their roads to handle safer trucks with greater capacity.

“The alternative option being considered by governments is mass-distance-location pricing, which would see some trucks fitted with regulatory GPS tracking systems. Operators would receive an itemised bill based on where their trucks travelled and their weight. In the format proposed, it would be more expensive to drive on rural roads than on major highways, because of their lighter construction.

“Mass-distance-location pricing would increase freight costs in rural areas. It would be a compliance nightmare, and would breach one of the fundamental principles of tax reform: making the tax system simpler,” he said.