Price cut for A-trailers, but fuel tax to rise on July 1

Fuel tax to rise by 2.4 cents per litre from July, but transport ministers agree to reduce A-trailer registration fees

Price cut for A-trailers, but fuel tax to rise on July 1
Price cut for A-trailers, but fuel tax rises

By Brad Gardner | March 23, 2012

The trucking industry’s fight for lower A-trailer charges has come at a cost, with transport ministers raising the fuel tax and increasing registration charges elsewhere to maintain revenue levels.

The Standing Council on Transport and Infrastructure (SCOTI) this week agreed to a proposal from the National Transport Commission (NTC) to jack up the fuel excise by an extra 2.4 cents per litre to 25.5 cents.

The NTC recommended an annual increase of 5.7 percent in heavy vehicle charges, but it used a new cost model that means price rises will vary.

The changes will take effect from July 1, along with a significant drop in the price of A-trailers. A tri-axle trailer will fall from $6525 to $3300, with the tandem unit dropping from $6195 to $3150.

It means the price of registering a nine-axle B-double will be $14,407 from July 1 – a price cut of more than $1300 – while B-triples will drop $4526 to $17,707.

Transport ministers last year tasked the NTC with looking at ways to reduce the price of A-trailers, which the industry blamed for making B-doubles unviable.

NTC CEO Nick Dimopoulos says the group consulted widely before issuing its recommendations.

"We’ve listened carefully to industry and government views and have developed a short-term solution that will significantly relieve the financial pressure on operators who use A-trailers," he says.

"The updated charges are based on the best available data and will ensure that operators who don’t do a lot of mileage, such as livestock transporters, and operators using safer more productive vehicle types aren’t unfairly disadvantaged."

However, the latest charging proposal ran into opposition from the Northern Territory. Furthermore, Western Australia voted to apply transitional arrangements to the charges.

The price-tag for keeping a semi-trailer truck registered from July will climb from $5746 to $6394, while a double road train will cost an extra $2419.

Fees for rigid trucks will differ based on the model of the vehicle.

The NTC used a new cost model to develop the latest round of charges. Under the previous system, charges would have risen across the board by 5.7 percent, meaning a B-double would have shot to $16,604 and a B-triple to $23,501.

The NTC recommendations differ from its initial proposal, which would have increased the fuel charge to 23.3 cents per litre and reduced a tri-axle A-trailer to $3480. The tandem-axle unit would have fallen to $3162.

In its report handed to ministers, the NTC says governments would have foregone $144 million in revenue if they stuck with the current charging system.

"Year on year, the annual adjustment has slightly under-recovered costs and has now reached levels of under-recovery that triggered the 2007 heavy vehicle charges determination," the group says.

Transport ministers also agreed to consider a new charging model when they meet in 2014. The NTC says the existing determination is nearing its end and that it is ideal to consider a scheme that moves towards direct pricing.

"However, NTC recognises there is currently no consensus for change. Therefore an ability to provide independent advice based on evidence-based policy analysis and strong engagement with industry and business will be critical," the group says.

It has proposed pricing trials as part of the process, while transport ministers will consider publicly releasing the model and data used.

The Australian Trucking Association (ATA) has long pushed for the data and charging model to be released, arguing it is necessary to verify the NTC’s recommendations.

Earlier this week it urged ministers to reject the latest round of charges and freeze the fuel excise.

"Many trucking operators are already doing it tough, with parts of the economy still in the doldrums and our customers demanding more and more supply chain efficiencies, which is their code word for cutting rates," ATA Chairman David Simon says.

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