ATA seeks Labor commitment on carbon tax

Trucking lobby redoubles effort to save industry from the carbon tax, using a televised address to seek commitment from government

ATA seeks Labor commitment on carbon tax
ATA seeks Labor commitment on carbon tax
By Brad Gardner | April 3, 2013

The trucking lobby is redoubling its efforts to spare the industry from the carbon tax and to put the onus on governments to unlock more of the road network to higher productivity vehicles.

Australian Trucking Association (ATA) Chairman David Simon used his nationally televised speech today at the National Press Club to seek an election commitment from the Federal Government to drop its planned decision to impose the tax on operators from July 1, 2014.

He also used the address to launch a report by PricewaterhouseCoopers, commissioned by the ATA, into the existing road planning, funding and charging system.

Trucking received a two-year exemption from the carbon tax on fuel when it was introduced last July, and Simon wants it made permanent. The industry will pay an extra 6.85 cents per litre for fuel once the tax is applied.

"Instead of making life more difficult for small trucking operators, the Government should make an election commitment not to extend the carbon tax to trucking," Simon says.

"Instead, it should focus on developing a road funding and planning system that would enable the industry to use more productive vehicles that use less fuel to do the same job."

The PricewaterhouseCoopers report recommends changes to the road funding framework to encourage the use of higher productivity vehicles, such as B-triples. The ATA believes the larger rigs are necessary to accommodate a growing freight task and reduce the number of trucks on the road.

"The report recommends that governments should set defined target standards for the roads in each tier of the freight network. The standards would be set so the industry could use high productivity vehicles on key freight routes," Simon says.

"There should be a transparent formula for allocating the charges paid by the trucking industry to upgrading key routes, last mile connections and local roads to meet the standards."

Simon wants B-triples and super B-doubles granted access to the Hume Highway between the outskirts of Melbourne and Sydney as soon as the Holbrook Bypass is completed in mid-2013.

The report also recommends removing road funding and access decisions from day-to-day politics through the establishment of a national road fund, which will develop investment and maintenance plans for major freight routes.

"The report recognises that it may be necessary to consider setting up state and territory level road funds as a first step," Simon says.

"Governments would be responsible for the overall direction of road investment through a master planning process. The report recognises there would also need to be a ministerial power of direction available for use in exceptional circumstances."

During his speech Simon described the existing funding model built on fuel excise and registration fees as "broken", bemoaning high registration charges as a key concern.

"The very high registration charges raise cash flow issues for small businesses, who have to find the amount as a lump sum. This is very hard when you’re running a business on tight margins," he says.

The PricewaterhouseCoopers report recommends reducing registration charges and raising the fuel excise to ensure those operators that travel more kilometres pay more than low-mileage firms. It’s a recommendation in line with the ATA’s and one at odds with current government thinking that favours mass-distance-location pricing.

"The industry would pay a similar amount compared to the current system, but small operators wouldn’t have to manage their cash to make a huge lump sum payment once a year," Simon says of the PricewaterhouseCoopers recommendation.

The report argues against mass-distance-location pricing, which will fit a GPS to trucks and bill them based on their weight, the roads they use and the distance they travel.

Simon also touched on the impact the ATA believes the carbon tax will have once it is applied to trucking next July, saying it will cost operators $500 million in its first year.

"It would be a massive shock for many businesses and they would not be able to respond," he says.

According to Simon, operators will not be in a position to reduce energy use or increase charges to cover higher fuel bills, forcing many to turn their back on trucking.

"Seventy-two percent of trucking businesses have only one truck. They are price takers, not price makers. Their customers would tell them to absorb the cost. The pace of businesses leaving the industry would increase," Simon says.

"This would be a tragedy for the people involved. It would also reduce the industry’s overall flexibility and productivity."

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