Victoria dumps port freight charge

The Victorian Coalition scraps the previous government’s freight infrastructure charge that was to be levied on trucks at the port

Victoria dumps port freight charge
Victoria dumps port freight charge
July 13, 2011

The Victorian Coalition has today decided to scrap the labor government’s freight infrastructure charge (FIC), which
would have required every transport operator entering the Port of Melbourne to pay a tax for their load.

Minister for Ports Dr Denis Napthine says the tax would have ruined Victoria's competitive advantage when it came to freight and put many smaller, family-run operators at risk.

"Labor's unfair truck
charge would have significantly disadvantaged exporters and transport operators in rural and regional Victoria," the Minister says.

Dr Napthine says the FIC would have cost over $100 million to set up and administer, a cost completely out of proportion with the revenue it raised.

"The removal of the tax will save the industry from that regulatory burden," DR Napthine says.

"After extensive consultations with the transport industry and other business groups, we believe it will be better to replace Labor's unpopular 'truck tax' with a fairer, cheaper and more efficient system," he says.

The Coalition will apply a licence fee to the PoMC that the Corporation will then be able to recover through its normal system of fees and charges the industry is aware of and works with every day.

"The government will charge a licence fee to the Port of Melbourne which will then recoup its cost through the regular fees and charges already in place across the port," Napthine says.

The government's model has been welcomed by the industry.

Victorian Transport Association Chief Executive Phil Lovell says he endorses the new system and that he is pleased the
government listened to concerns raised by the trucking industry.

"Scrapping the previous Government's tax on trucks using Swanson Dock, is the right decision," Lovell confirms.

"The new licence fee on the Port of Melbourne Corporation is much simpler, more cost effective and does not place an administrative burden on the trucking industry."

The Victorian Freight and Logistics Council (VFLC) agrees.

VFLC Chairman John Begley says while it is up to government to collect funds for investment in transport infrastructure, his concern was that the FIC mechanism would not support productivity

"Levying the FIC on trucks would make it difficult to recover costs and create expensive administrative overheads," he says

"We have analysed collection methods and believe existing cargo-based levies are the most efficient means to collect much-needed funds.

"Traders understand these mechanisms. Our analysis indicates that we can maintain competitiveness with other east coast ports and still supply funds to improve international supply chains."

Begley says is important for industry and business to have a transparent process where their funds are involved.

"The sector needs to see that collected funds will be applied to improve infrastructure to help our trade performance," he says.

"The Council has identified a number of network improvements that represent significant productivity gains and a great return on investment for our traders."

"A cargo-based charge is a logical, sensible approach, which has been used in other states.

"Combined with a clear investment program for freight network infrastructure serving our importers and exporters we can achieve these productivity gains to recoup the cost of this levy."

"We are pleased that Minister Napthine has engaged with industry on this issue. While we would all like to avoid paying levies and taxes, a more common sense approach is welcome and much more in touch with the real world of logistics."

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