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ATA bats back Denniss tax attack on heavy vehicles

Noted economist claims rate is too low but industry says the maths used is faulty


The Australian Trucking Association has responded sternly to high-profile economist Dr Richard Denniss who proposes switching proposed electric vehicle road taxes to heavy vehicles.

In an opinion piece for online news service The Guardian, Denniss, thinktank The Australia Institute chief economist, charges that heavy trucks fail to pay their way for the road damage caused and cites the National Transport Commission’s (NTC’s) April 2020 Heavy vehicle charges determination – scope information paper in support.

“If the government – state or federal – was interested in genuine transport reform, then maybe some sort of user charge for electric vehicles would be part of that but the first thing you would do is introduce mass distance charging on heavy trucks,” he argues.

“A truck does 20,000 times as much damage as a normal passenger vehicle, but in Australia we don’t recoup the cost of that damage.

“While the fuel excise you or I pay has been increasing with inflation, [Australia] has actually lowered the excise for heavy vehicles.”

He sees the fall in rail loads between Sydney and Melbourne as due to under-pricing of truck taxes and the power of the road lobby as hindering action on mass distance pricing for large trucks.

Denniss proposed a similar system to the one in place in New Zealand, where heavy vehicles contribute roughly 37 per cent of land transport taxes – compared to the 12.5 per cent trucks currently contribute to government road outlays in Australia.

The ATA’s position on EV taxation can be found here.

The arguments fail to impress the ATA.

“Increasing taxes on heavy vehicles would be a tax on jobs, consumers and Australia’s economic recovery,” acting CEO Bill McKinley says. 

McKinley views the Australia Institute proposal to increase taxes on heavy vehicles is an outrage, and accuses it of having failing to do its maths properly.    

“The claim that heavy vehicles pay 12.5 per cent of the cost of road expenditure is factually incorrect. On average, it is actually around 22 per cent. 

“Trucks and buses make up less than 4 per cent of vehicles on our roads, compared to passenger cars which make up more than 74 per cent. This means the less than 4 per cent are paying 22 per cent of the cost of the road network.”  

McKinley points out that heavy vehicles already pay road user charges, which are set by transport ministers and include a fuel-based road user charge and significant registration charges. 

“Trucking is a small and family business industry. More than 98 per cent of trucking operators are owner-drivers or small businesses who already work on tight margins,” McKinley says.  

“Trucking plays an essential role in our communities and has kept Australia supplied with food, medicine and fuel during the coronavirus restrictions and lockdowns. Increasing taxes on heavy vehicles would put increased price pressure on everyday consumer items. 

“Instead of thanking hardworking truck drivers for keeping Australia moving in difficult times, the Australia Institute wants to tax them more to justify well-off owners of electric vehicles, often worth more than $100,000, to drive on our roads without paying for their use.”  

ATA notes that it has been working to promote policies for accelerating the uptake of low- and zero-emission vehicles, whilst ensuring a fair and sustainable road user charging system to pay for safer roads. 

McKinley argues that increasing taxes on heavy vehicles, whilst not charging electric vehicles for their road use, will undermine public transport, increasing congestion and undermining attempts to improve urban sustainability.  

“The Australia Institute proposal would increase tax on buses and will incentivise individual passenger transport, likely encouraging a shift from public transport to single vehicles,” he says. 

The Denniss opinion piece can be found here

The NTC information paper quoted in it can be found here.


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