Logistics News

Industry quakes ahead of carbon tax

Transport providers look ahead to the weekend’s carbon tax package decision with trepidation but the government won’t be drawn on the detail

By <a href="mailto:bgardner@acpmagazines.com.au“>Brad Gardner and
<a href="mailto:rzivkusic@acpmagazines.com.au“>Ruza Zivkusic, Edited by <a href="mailto:agamelopata@acpmagazines.com.au“>Anna Game-Lopata | July 8, 2011

Transport and logistics providers look ahead to the weekend’s carbon tax package announcement with trepidation but the government won’t be drawn on the detail.

The federal government has spent much of this week dodging Opposition questions and industry demands for answers after the announcement that its carbon tax would not apply to fuel for households, tradespeople and small businesses using light commercial vehicles.

While he welcomed the exclusion of petrol from the tax, RACV public policy general manager Brian Negus is calling for clarity on a number of issues pertinent to providers.

“We want to know whether it is applied more broadly across the community, including business and freight,” Negus says.

“Our proposal is that any carbon price should be offset as a cent-for-cent reduction in fuel excise.”

The Transport Workers Union (TWU) wants a guarantee that employee drivers and owner-drivers will be shielded, while Labor senators and former TWU officials Glenn Sterle and Alex Gallacher have also raised concerns about the impact the tax will have.

The Australian Trucking Association (ATA) has criticised the prospect of a dual system that could exempt high-earning individuals but slug small trucking fleets and owner-drivers earning considerably less.

Meanwhile Prime Minister Julia Gillard has praised the work of transport providers saying she recognises the hard work they do for the country.

But despite her lofty words, Gillard has avoided being drawn on the issue of whether heavy vehicles will be exempt, telling Hasluck MP Ken Wyatt to wait until the carbon tax package is unveiled on July 10 for the answer.

Paterson MP Bob Baldwin used parliamentary proceedings to detail a conversation with the Newcastle-based JS Transport Group, which told him the tax would increase business costs by at least 5 percent.

“Goods are transported by trucks everywhere across Australia. Everything we use and everything we consume is transported by trucks,” Baldwin says.

Wannon MP Dan Tehan earlier this week sought answers from Assistant Treasurer Bill Shorten on what the carbon tax had in store for Allen Transport, which employs 22 people and operates 10 trucks in Tehan’s electorate.

Shorten did not answer the question, instead reiterating the announcement that light commercial vehicles would be exempted.

Opposition leader Tony Abbott received the same treatment when he asked if a carbon tax on fuel for trucks would lead to increases in the price of fruit and vegetables.

“Further details about carbon pricing will be available in coming days and to the nation on Sunday. I will be very happy to take any question from Australian families and Australian businesses on the impact of carbon pricing,” Gillard says.

Opposition spokesman on transport Warren Truss seized on comments from TWU National Secretary Tony Sheldon who argued the tax would put financial pressure on transport providers and contribute to road fatalities and injuries.

Minister for Infrastructure and Transport Anthony Albanese responded: “I have waited more than two years for a question from the shadow minister and I say to him he can wait five more sleeps for an answer.”

While it is lobbying for an all-or-nothing approach on the carbon tax, the Australian Trucking Association (ATA) believes the government will tinker with the industry’s fuel tax credit if heavy vehicles are not exempted.

Earlier in the week Victorian Transport Association CEO Phil Lovel pointed out transport and logistics providers are already doing it tough.

“We’re being attacked from all sides and the economy is down; various sectors of the industry are suffering and the costs are going up and this is the last thing we need because all our customers are affected.

“It might sound easy to get the rate increased but if the customer can’t pay it where does it leave you?”

“Most operators are feeling very apprehensive about their futures, they are worried about where they will get their growth from; everything is going up – the registrations are going up and our fuel charges have gone up so it’s really a difficult scene at the moment,” Lovell says.

South Australia Senator Alex Gallacher is another who argues the carbon tax will hit self-employed drivers because they would not be able pass on increased operating costs.

He told The Advertiser the carbon tax exemption to be provided to private motorists and trading operating light commercial vehicles should be extended to truck owner-drivers.

He also wants providers to be compensated if their costs increase as a result of the tax.

Small businesses with large trucks will also be vulnerable to any price rise in diesel, which could force them to go broke, Gallacher adds.

According to a recent study by the Centre of International Economics (CIE), a $25 carbon tax will increase the price of diesel by 7 cents per litre. Operators will pay an extra 8 cents per litre under a $30 scheme. The government is expected to announce a starting price of between $20 and $30 a tonne.

Although it asserts the increases will have an impact on operators, the CIE also says higher prices are unlikely to differ beyond the fluctuations the industry currently deals with.

The government intends to introduce carbon tax legislation this year, with the scheme to begin on July 1, 2012.

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