David Simon, the Chairman of the Australian Trucking Association, has called on the government to commit, prior to the election, to not extend the carbon tax to the trucking industry.
He said that in its Clean Energy package the government said that the fuel used in the trucking industry would be exempt from the carbon tax until the middle of 2014.
They are then committed to reduce the fuel tax credits that it will be possible for truck operators to claim by about 7 cents in the litre that first year following the exempt period he said.
Here is more on the subject from the ATA website at http://www.atatruck.net.au/:
“That’s a 27 per cent tax hike. It would cost the industry more than half a billion dollars a year. It would be a massive shock for many trucking businesses, and they would not be able to respond.”
Mr Simon said the Clean Energy Package was based on the assumption that businesses would respond to the carbon tax by reducing their use of energy or switching to renewables. It assumes that businesses that cannot do this would be able to increase their prices. This would, in turn, change their customers’ behaviour.
“Neither of these assumptions fit the commercial reality of the trucking industry,” he said.
“Trucking businesses only have limited opportunities to reduce their energy use. Switching to renewables is not generally an option.
“The Government projects that the use of biodiesel will increase rapidly from the end of the decade, and that it will be the dominant transport fuel by 2030.
“But the carbon tax on trucking would take effect in 2014, not the end of the decade. Biodiesel blends are rarely available, and gaseous fuels like LNG are not usable for long distance operations.
“So businesses are left with trying to pass on the carbon tax.
“72 per cent of trucking businesses have only one truck. They are price takers, not price makers. Their customers would tell them to absorb the cost. The pace of businesses leaving the industry would increase.
“This would be a tragedy for the people involved. It would also reduce the industry’s overall flexibility and productivity.
“All large trucking businesses have peaks in demand. Different businesses have different peaks.
“For example, my company’s business peaks in the months before Christmas. A business that carts produce from Queensland would have its peak in January and February. By using owner drivers and subcontractors to cover our individual peaks in demand, the trucking industry doesn’t need to invest capital in equipment that stands idle for most of the year.
“Instead of making life more difficult for small trucking operators, the Government should make an election commitment not to extend the carbon tax to trucking.
“It should focus on developing a road funding and planning system that would enable the industry to use more productive vehicles that use less fuel to do the same job.”
Mr Simon rejected the environmental movement’s argument that fuel tax credits are a subsidy.
“In reality, it’s part of making sure that business inputs aren’t taxed. It’s no different to being able to claim back the GST,” he said.
Mr Simon has said that his prime concern about the introduction of the carbon tax and at the proposed rate is the cost that will be imposed on an industry that has very few options to be able to reduce their consumption.
The worry is that the trucking industry would not be able to cope with the costs and it would be the small operators that would suffer the most.
Instead he has suggested that money be spent to improve roads and developing a strategic plan to help the trucking industry reduce their overall fuel consumption as a more realistic and workable option.