Trucking braces for challenges of carbon tax on fuel

Trucking wants ACCC’s help when carbon tax begins, as Murphy Transport warns operators could use scheme to undercut rivals

Trucking braces for challenges of carbon tax on fuel
Trucking braces for challenges of carbon tax
By Ruza Zivkusic | July 12, 2011

The Victorian Transport Association (VTA) has vowed to pressure the Australian Competition and Consumer Commission (ACCC) to help the trucking industry deal with fuel price hikes under a carbon tax.

VTA CEO Phil Lovel says he will push the ACCC to help the transport industry recover their rates that were reduced in line with the drop in the diesel fuel credit.

Trucking operators will pay a $25.40 carbon tax from July 1, 2014, which will increase diesel prices by 6.85 cents per litre.

"It’s a two-way-deal; they forced us to reduce our rates when the diesel fuel credit came in and now that they’ve reduced it we want them to help us increase our rates," Lovel says.

"We won’t take this lying down, it’s a cost to the supply chain and no company can absorb it.

"When the diesel fuel credit came in 2000 it was 18.51cpl and now it’s down to 15.043cpl and now they’re going to take 7cpl off that. We want cost recovery, we have to get that back."

Murphy Transport Solutions operations manager Ozan Kara says contracts with long-standing customers might be jeopardised because of the tax.

"It will just leave the door open for the competitors to come in and say we won’t forward the carbon tax on to you and we’ll wear that as a cost," Kara says.

"There might be an element of jeopardising the contract but I doubt it’s going to make us or break us; it will be slightly more difficult and we might slightly make a sacrifice to the rate and then take on the carbon tax."

GDP Transport Manager David Preston, of Creswick in Victoria, says the carbon tax cost will have to be passed on to his customers.

"At this stage there’s nothing to play with so the cost will have to be moved on to our customers," he says.

"A lot of what we do is tied on to the rural industry, it will take a lot of convincing them as an industry they’re being left off and when we come through the rate and charge them extra it’s going to take a bit of explaining to them and will make things tight."

Central Victorian Transporters (CVT) Manager Rodney Brown, of Maryborough in Victoria, carts cement and aluminium and believes his business will be hit hard by the carbon tax as those two industries are big users of power.

"Our major work is linked to users with a large footprint and the government has not even had the courage to say what the 500 industries they’re looking at to charge the tax to are," Brown says.

"The cement manufacturers in Australia potentially could be forced to close."

Transport Workers Union (TWU) senior official Michael Aird says his members are prepared to "take action in their own hands".

"Safe roads is about claiming cost recovery and there is no cost recovery reoccurring in the transport industry," Aird says.

"Our members are saying they’ve had a gutful; enough is enough and they want to take some action."

Aird has reiterated comments made recently by TWU National Secretary Tony Sheldon calling on the Federal Government to commit to introducing safe rates to ensure owner-drivers and employee drivers can recover their costs.

"They need safe roads legislation for their job security to get a fair go and they need it now. They’re prepared to stand up and fight and that can be a campaign or civil disobedience," Aird says.

"They will continue to fight until we see safe rates legislation put in place."

RMIT University senior transport lecturer Paul Mees believes the transport industry has got off "lightly" following the Federal Government’s announcement of a carbon tax.

"It should have been included in the carbon pricing and trading scheme because it is the second largest source of greenhouse emissions after electricity and its emissions are growing more rapidly," he says.

The Australasian Railway Association (ARA) accused the government of pandering to the trucking industry by exempting it for two years.

ARA CEO Bryan Nye wants the government to rethink the exemption, which does not apply to rail, before the tax begins next year.

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