Napthine introduces amendment to scrap freight tax


Victorian Government moves to officially wipe the proposed Port of Melbourne freight infrastructure charge from the books

Napthine introduces amendment to scrap freight tax
Napthine introduces amendment to scrap freight tax

By Brad Gardner | December 9, 2011

The Victorian Government has moved to officially wipe a proposed Port of Melbourne freight tax from the books, introducing an amendment to replace it with a licence fee.

Ports Minister Denis Napthine
this week
introduced the Port Management Amendment (Port of Melbourne Corporation Licence Fee) Bill to kill off the former government’s planned freight infrastructure charge, which would have applied a toll to trucks accessing the East or West Swanson terminals.

The charge was due to begin this year and revenue would be used to fund infrastructure projects outlined in the now defunct Victorian Transport Plan.

Napthine says the Port of Melbourne will now bear the impost through an annual licence fee starting at $75 million on July 1, 2012. It will rise along with inflation, and Napthine says the money will be used on infrastructure projects to improve the state’s productivity.

The trucking industry lobbied furiously against the toll, which would have cost $140-$180 for each truck entering the port. Napthine says operators would have been unfairly targeted.

"The FIC (freight infrastructure charge) presented a real threat to Victoria’s competitive advantage in the freight sector along with the livelihoods of smaller, family-run truck operators. It would have significantly disadvantaged exporters and transport operators in rural and regional Victoria," he says.

He labelled the charge "a looming regulatory burden" and likened it to Victoria’s troubled public transport ticketing system, Myki.

"The tolling system required to collect the FIC would have cost more than $100 million to set up and run – an amount well in excess of projected revenue in the first year. It was an ill-considered proposal with shades of Myki for trucks," Napthine says.

"By contrast the port licence fee will be relatively cheap to implement and efficient to administer."

The government estimates revenue over the first three years of the licence fee will be similar to the FIC and will come without the cost of running a tolling system.

Victoria’s economic regulator, the Essential Services Commission, will be responsible for monitoring and assessing how the port goes about recovering the fee from port users.

Premier Ted Baillieu earlier this year announced his government would not support the FIC, a move the Victorian Transport Association welcomed. Its Deputy CEO, Neil Chambers, claimed small and medium sized businesses would go broke under the scheme.

The VTA threatened to fight the government at every turn if it moved ahead with the charge, while the Victorian Employers Chamber of Commerce and Industry and the Victorian Farmers Federation also campaigned against the plan.

Debate on the Bill has been adjourned until December 21.

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