Trucking industry opposes call for fuel excise to fund rail

By: Jason Whittaker


The Alliance of Councils for Rail Freight Development is pushing the Federal Government to use diesel excise revenue to fix

The Alliance of Councils for Rail Freight Development is pushing the Federal Government to use diesel excise revenue to fix ailing rail infrastructure in rural Victoria.

Its plan, however, is running into opposition from the Australian Trucking Association (ATA), with ATA Chief Executive Stuart St Clair saying the trucking industry should not foot the bill for rail infrastructure.

The alliance’s chairman, Vernon Knight, says a portion of the $30 billion generated by the diesel excise will go a long way toward fixing the chronic rail problems in regional Victoria.

"The redirection of the Commonwealth fuel excise would clearly reward our best transport option," Knight says.

So poor is the state of the network that Pacific National may soon pull out to devote resources to more profitable areas. Furthermore, intermodal operator Wakefield Transport last month went into administration partly due to the delay in upgrades to the Mildura section of the track.

Knight also says, by investing more in rail infrastructure, the Government will go a long way to slashing Australia’s greenhouse gas emissions.

"Rail could quickly become Australia’s most potent weapon in the fight for the environment if we gave the network its proper status," he says.

Citing Tim Fischer’s report into the state of the rail network, Knight says one train can transport the equivalent of 50 B-doubles, thus reducing the wear and tear of the road network as well cutting the amount of diesel used when transporting goods.

"From any perspective, the benefits in terms of transport costs, public safety, road maintenance and global warming provide overwhelming support for a fast, efficient and standard national rail network."

But as the fuel tax is built into the road user charges paid for by trucking operators, the ATA believes rail funding initiatives should stem from other revenue streams.

"The trucking industry already pays 19.633 cents per litre in fuel tax, and will pay 21 cents per litre in 2009. In contrast, rail operators pay no fuel tax at all," St Clair says.

If the Government supports the rail group’s proposal, St Clair says operators will need to pay more for fuel because the Government will need to increase the fuel tax to compensate for rail expenditure.

This, St Clair says, will also adversely affect the broader community, because the industry will pass on any cost rise that will result from higher taxes.

"The alliance’s plan is a thoroughly bad idea. It would push up inflation, because trucks carry 75 per cent of the freight carried in Australia," he says.

St Clair also questions why the trucking industry should be singled out to shoulder the burden for rail infrastructure investment. While noting the Government needs to spend more on infrastructure, he says the cost should also be borne by the community, not just trucking operators.

St Clair also rejected the claim rail is the best transport operation, saying it is useful when delivering freight such as coal through the Hunter Valley but cannot match trucks when it comes to metropolitan areas.

"It’s the worst transport option, though, if you want to deliver groceries to a suburban supermarket. I haven’t seen one yet that has its own rail siding," he says.

"Australia needs a transport policy that allows people transporting freight to pick the best mode for the job. People will continue to prefer road transport because of its flexibility, reliability and convenience."

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