The Federal Government’s ‘razor gang’ risks fuelling inflation if it makes changes to the fuel tax credit system, the trucking
The Federal Government’s ‘razor gang’ risks fuelling inflation if it makes changes to the fuel tax credit system, the trucking industry argues.
Prime Minister Kevin Rudd says he has commissioned a ‘razor gang’, led by Finance Minister Lindsay Tanner, to cut spending in order to stave of rising inflationary pressures.
However, taking an axe to the transport industry may have adverse consequences, Australian Trucking Association (ATA) CEO Stuart St Clair says.
St Clair says trucking operators have expressed concern over what the Rudd Government’s intentions are towards the fuel tax credit system, which currently saves operators 18.51 cents per litre on their fuel costs.
St Clair believes any cut to the system will add to inflation because any cost suffered by the transport industry will add to operating costs which will needed to be passed on.
“By cutting the fuel tax credit they would add to inflationary pressures because they are going to increase the price of transport,” he says.
He says any cut to the fuel tax credit system will result in a 22 percent increase in operating costs, while grocery bills per year will increase by $86 for urban families and $103 for rural families.
While the concerns are only rumour at the moment, St Clair says the Government’s language about aggressive cost-cutting has fuelled speculation the transport industry may be affected.
“I think when governments make statements about reducing expenditure we need to ensure the Government understands the importance of fuel taxes and the fuel tax credit system because it is very important to our industry,” he says.
St Clair says the ATA will be lobbying the Government to ensure no changes are made to the system.
“We are just sort of flagging the issue with the Government to say, ‘look, the on-road grant for the fuel tax credit system is very important to our industry to remain competitive, which at the end of the day means the country remains competitive as an export nation,” he says.
Concern over changes to the current environment criteria for pre-1996 trucks has also been raised with the ATA. Currently, trucking operators with pre-1996 vehicles can receive the fuel tax credit so long as they maintain their trucks in accordance with maintenance programs such as TruckSafe.
St Clair says 58 percent of Australia’s entire heavy vehicle fleet is made up of pre-1996 vehicles, meaning any changes will have serious ramifications on the trucking industry.
“What needs to be understood is that pre-1996 vehicles play a very important role in the freight task,” St Clair says.
By bringing in more stringent controls, St Clair says the Rudd Government will increase operators’ running costs, which will need to be passed on to consumers.
“You are just going to add to the price of doing business,” St Clair says.
“Everything at the end of the day is carried by a truck at some point. We need to reinforce those things.”
What do you think? Send us your feedback.