The Australian Trucking Association has predicted the trucking industry would be decimated if the Grattan Institute’s proposal to increase dramatically the effective fuel tax on trucks succeeds.
The Grattan Institute has today released a report on fuel tax and the fuel tax credits system, Fuelling budget repair. If adopted, the report would increase the effective fuel tax paid by trucking businesses by 20.5 cents per litre, from 27.2 cents per litre to 47.7 cents per litre.
ATA Chair, David Smith says the Grattan Institute’s proposal would spell disaster for the trucking industry - and ultimately for consumers.
“There is no way that any transport business could survive this. Diesel is our biggest cost. We’re already fighting ridiculous fuel prices; this would be straw that breaks the camel’s back,” Mr Smith said.
“Ultimately, our customers would have to pay the extra cost. But on the way through, many trucking businesses would fold. And costs in rural and remote areas would go up even more.
“The effective fuel tax on trucks should be set to recover the cost of the roads we need, and not inflated by extra costs or poor state government spending decisions,” Mr Smith concluded.
FACTS ABOUT THE FUEL TAX ON TRUCKS
- Trucking is an industry of small and medium businesses. In June 2022, almost 58,000 of the industry’s 59,100 businesses had fewer than twenty employees. 31,600 trucking businesses had no employees (ie: the only people working in the business were the owners). These businesses operate on tight margins
- The ATA’s research shows that only a third (34 per cent) of trucking businesses can pass on increased fuel costs (including reductions in fuel tax credits)
- The businesses that can raise their charges are rarely able to increase charges by more than CPI.
- Many trucking businesses would lose money and need to close
- The plan would impose higher costs on rural and remote communities. The Grattan Institute concluded that its tax hike would only have a small impact on consumer prices. Its modelling is based on an average figure, though. The tax hike would have a much greater impact on rural and remote communities, where the cost of transport is higher.
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