Carbon tax holds no fears for Toll

A carbon tax on trucking from July 1, 2014 holds no fears for the nation's largest transport and logistics firm

By Brad Gardner | October 27, 2011

A carbon tax on trucking holds no fears for the nation’s largest transport and logistics firm, Toll, which plans to pass any cost increases on to its customers.

Chairman Ray Horsburgh told shareholders at yesterday’s annual general meeting he did not expect the scheme to add to Toll's operating costs.

The carbon tax is due to begin on July 1 next year. The trucking industry has been given a two-year exemption and will pay the tax through a 6.85 cent-per-litre discount in the fuel tax credit from July 1, 2014.

"We do not expect a net material financial impact on Toll as a result of the introduction of the carbon tax as any increased cost will be passed on to our customers," Horsburgh says.

A market-based emissions trading scheme is due to begin in 2015, which will gradually erode the fuel tax credit as the price of carbon continues to rise.

But Horsburgh says costs will be passed on to customers similar to the fuel surcharge arrangements Toll currently has in place.

"The Australian government’s potential changes to the carbon tax regime beyond July 2014 may see road transport lose its tax exemption," he says.

"If this occurs we will see an increase in the amount to be passed through to our customers, but again this is still not expected to have a material impact on our group results."

Horsburgh says the transport and logistics industry is a high greenhouse gas emitter and that Toll recognises it needs to reduce its carbon footprint.

Its annual report says Toll emitted around 533,000 tonnes of carbon dioxide in the 12 months to June 30, 2010. Figures for last financial year are still being prepared.

Toll is aiming for a 20 percent reduction in its Australian emissions by 2020 and will later this year release an environmental strategy outlining its plans.

"Given the size and scale of Toll’s operations, abatement of greenhouse gas emissions remains a key environmental focus for Toll," its annual report says.

Modelling released by Treasury says transport produced about 14 percent of Australia’s greenhouse gas emissions in 2010, with road transport accounting for more than 85 percent of that figure.

The Opposition, which has vowed to rescind the carbon tax if it wins office, claims the scheme will have a dire impact on trucking operators.

The Australian Trucking Association (ATA) is lobbying for the industry to be exempt, with CEO Stuart St Clair saying most companies are small businesses with fewer than five employees.

"They are entirely comparable to other small businesses that are exempt from the carbon tax, except they happen to operate trucks weighing more than 4.5 tonnes," he says.

Inverell Freighters Managing Director Keri Brown fronted a Senate inquiry in August and argued his business would not be able to pass the costs of the carbon tax on to its customers.

Brown believes the tax will add an extra $350,000 to his fuel bill in 2014.

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