Charges transition to come at a cost to trucking

Proposal for transition to new charging framework will leave trucking paying additional $199.7 million in registration fees and fuel excise

Charges transition to come at a cost to trucking
Charges transition to come at a cost to trucking
By Brad Gardner | December 10, 2013

A proposal to transition the trucking industry to a new charging framework will leave operators paying almost $200 million more in registration fees and fuel excise between 2014 and 2016.

The National Transport Commission’s (NTC) update to its heavy vehicle charging options unveiled last month suggests a staged approach to reduce the impact of the reforms on government coffers.

Under the NTC’s plan, the move to the new charging system will begin from July 1 next year and be implemented from July 1, 2016.

The NTC says the move will "offer a smoother shift from the current charging regime" to a new system.

Under this approach, the NTC says the industry will pay an additional $199.7 million in registration fees and fuel excise, with $117.2 million coming from registration and $82.5 million coming from excise.

"Necessarily, any transition path…where there is a reduction in lost revenue for jurisdictions would be offset by an equal increase in registration charges and/or RUC [road user charge] paid by heavy vehicle operators," the NTC says.

Revenue flowing to state and territory jurisdictions will gradually reduce in years one and two under a transition, as opposed to the direct method which would deliver an immediate $145 million hit to revenues.

The Federal Government will incur a slight drop in revenue under a transition, but the amount of money it collects will increase in the second year.

The NTC has modelled the figures on governments adopting Option A, which makes technical improvements to the existing charging framework while maintaining the current revenue split between registration fees and the excise.

However, it says governments could go with options B or C, which raise more revenue through the fuel excise and less through registration fees, if an intergovernmental agreement has been signed by July 1, 2016.

It says there would be no change in total revenue raised from the industry, the only difference being that more would come from the excise.

Option B involves making the same technical improvements as Option A, but more revenue will be raised from the excise (71.7 per cent). Option C would raise 79.2 per cent of revenue from the excise.

The NTC is currently seeking feedback on the heavy vehicle charging options and its proposal for a transition.

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