Confluence of drought, bushfires and coronavirus seen undermining trucking finances
National trucking bodies are seeking an abatement or at least a delay of planned truck fuel tax and registration charges hikes.
The views are contained in responses to the consultation report released by the National Transport Commission (NTC) in December, seeking industry views on the Transport Ministers Council’s (TIC’s) preference for an increase in both heavy vehicle registration and road user charges by 2.5 per cent in 2020-21 and a further 2.5 per cent in 2021-22.
Both the National Road Transport Association (NatRoad) and the Australian Trucking
Association (ATA) see the timing, in the midst of long-term, ongoing or impending disaster impacts, as troubling.
NatRoad respectfully takes somewhat the harder line, with CEO Warren Clark stating members opposed the suggested increase.
“We oppose the suggested increase given the current environment,” Clark says.
“We thank Ministers for reducing the initially proposed increases of over 11 per cent per annum.
“But we believe the Consultation Report does not take into account the true devastation caused by widespread drought and the ongoing bushfire crisis, let alone the foreshadowed impacts of the coronavirus.
“The heavy rains that have followed the bush fire destruction have also caused additional delays and stoppages on some road networks.
“Many members have been directly affected, especially where tragic stock losses or destruction of forested and agricultural areas occurred.
“Local communities were hit hard. Many members have been affected by the need to divert hundreds of kilometres from their usual routes to maintain current contracts.
“This means that a lot of members lost money because the contract provided for a pre-agreed price for delivery. This is no time to be increasing the costs of heavy vehicle operations by increasing the road user charge or registration costs which are effectively taxes.”
If the call to have a continued freeze on these charges is not heeded, NatRoad recommends that any increase occurs from July 1, 2021 rather than from July 1, 2020.
Read how industry bodies sought to head off the hikes, here
The ATA also sees value in the later date.
“In November, transport ministers identified a preference for the truck fuel tax and registration charges to rise 2.5 per cent from 1 July 2020 and then another 2.5 per cent from 1 July 2021,” CEO Ben Maguire says.
“In total, this would see the effective tax on fuel increase 1.3 cents per litre. The national registration charge on a six axle articulated truck would increase $287.
“Ministers rejected officials’ advice that charges needed to increase by 11.4 per cent, after industry representatives briefed them on the cost and demand pressures faced by trucking businesses.
“Since November, the economic outlook for the trucking industry has got even worse.
“The unprecedented bushfires in late 2019 and early 2020 significantly affected the revenue of many trucking operators and will continue to affect them into the future. And now the coronavirus is expected to have a greater impact on the Australian economy and supply chains than the bushfires.
“This year is not the time to be raising taxes and charges on the people who transport two thirds of Australia’s domestic freight.
“In our submission to the National Transport Commission on the proposal, the ATA has recommended that the increases be deferred to 1 July 2021.
“Charges should then increase 2.5 per cent in 2021-22 and 2.6 per cent in 2022-23.
“Governments have directed the National Transport Commission to prepare a new heavy vehicle charging determination.
“The submission sets out the issues that the NTC should consider, including the need to exclude the cost of rebuilding bushfire affected roads from future charging calculations.”
The ATA notes that its submission was approved by its Transport and Economics Committee, following a unanimous vote by the ATA General Council last year.
“The submission shows how ATA members are working together to advocate on behalf of the trucking industry nationally,” Maguire says.