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A silent response – government inaction increases the FTC problem

The fuel tax credit issue has been ongoing for the industry since fuel prices first increased earlier this year. Now the federal government is yet to reinstate the fuel tax credit for operators across Australia.

The fuel tax credit issue for truck drivers hasn’t been a recent development. Since the start of the year, when the previous federal government lowered the fuel excise for all motorists but removed the fuel tax credit for the transport industry due to rising fuel prices, companies have been hurting.

South Australian Road Transport Association (SARTA) executive officer Steve Shearer has been leading the charge in calling for the new federal government to reinstate the fuel tax credit before more transport companies across Australia fold. So far, he hasn’t received a response.

“We’ve heard absolutely nothing,” Shearer told ATN. “They’re saying nothing and it appears they’re staring us down.

“We’re getting nowhere at this stage. I think they’ll try to stare us down all the way past the end of September.”

The end of September is a crucial period of time for transport companies. Shearer previously initiated a SARTA-driven survey of companies in May. The results warned that around 3,500 companies expected to close by July 1 after the fuel tax credit (FTC) wasn’t restored by the previous business activity statement (BAS) payment date.

If the FTC isn’t reinstated before the next BAS quarterly payment date of September 30, Shearer’s survey suggests 57 per cent of Australia’s businesses won’t survive past it. If the system continues into next year, 90 per cent of Australia’s transport businesses expect to fold, crippling the nation’s supply chain.

Despite receiving the results of this survey, the federal government is yet to act on the FTC issue. It’s enough to frustrate Shearer. 

“It’s extremely frustrating and very concerning,” Shearer says. “There’s a degree of belligerence on the part of the government members.

“I’m deeply concerned about what transpires in the next few months if the FTC isn’t restored.”

Shearer says he is continuing to collect data from companies about how their business survived, or didn’t, during the June BAS repayment date. So far, Shearer says more than 30 per cent of respondents are saying they couldn’t make the payment at all, plunging them into debt with the Australian Taxation Office (ATO). In some cases, people have had to draw on personal family funds.

Shearer says this desperation from companies can be attributed directly to both the previous and current federal governments.

RELATED ARTICLE: SARTA makes FTC breakthrough

“Currently it’s just a fundamental bluff game that they’re playing,” Shearer says. “The governments both have a lot to be held to account for if we continue to see closures of trucking businesses as people don’t want to increase their ATO debt they’ve already established to cover their June BAS payment.

“The government can’t let this happen again in September. We’re expecting many businesses to close and we can’t afford that as an industry.”

Shearer says in response, the federal government is ignoring the issue completely. He says the government may think it is a case of the industry collectively whinging, but he warns they’ll have egg on their face when consequences become clear.

“The crunch will come as the community and media pressure continues to build to extend the cut in the fuel excise,” Shearer says. “In that context, we’ll be asking hard questions about the FTC.

“I don’t know where it’ll end, but I hope it’s not with the catastrophic collapse of big chunks of the industry.”

To add insult to injury, the ATO recently announced an increase to the FTC rate from August onwards. However, this increase doesn’t apply to the trucking industry, as the government previously took away the FTC for transport companies.

Compounding this is the fact that the ATO recently increased the fuel cost again, causing fuel bills to rise yet again for truckies in a disastrous year.

Shearer says the industry must continue to pressure the federal government to stop risking the livelihoods of many in the industry.

“We must really stress that the government is irresponsibly rolling the dice,” Shearer says. “What they’re doing is gambling with the livelihoods and jobs of many people in the trucking industry.

“These people sustained the community throughout the COVID-19 pandemic, and now the government is potentially risking the entire supply chain in the country.”

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