Changing the fuel tax credit scheme could make some businesses unsustainable, NatRoad says
The National Road Transport Association (NatRoad) has dialled up the pressure on the federal government to keep the existing fuel tax credit scheme in the 2018-19 Budget, set to be released tomorrow.
The existing scheme provides businesses with a credit for the fuel excise on any fuel used for business purposes in heavy vehicles and light vehicles travelling off public roads or on private roads.
NatRoad says the excise was used to help fund construction and maintenance of roads, but CEO Warren Clark reckons that road transport operators already paid their fair share, through the unclaimable part of the excise and through vehicle registration.
“The fuel tax excise is based on the long-held principle that direct inputs to production should not be subject to general revenue-raising taxes. It is not a subsidy,” Clark says.
“Fuel costs already account for between 20 and 25 per cent of a road transport operator’s costs. Increasing this cost could have a significant enough effect on margins that some businesses would no longer be sustainable.”
Environmental groups such as the Australian Conservation Foundation have called for the scheme to be scrapped, calling for the government to phase in a cap to fuel tax credits, starting at $80,000 and stepping down by $20,000 per year, until a final cap of $20,000 is reached.
“This cap would ensure the vast majority of industries – including most claimants from the agriculture and tourism industries –are able to continue to receive the credits as they do now,” the ACF says, in its pre-Budget submission.