05 November 2015

Existing system will lead to trucking industry being overcharged $1.2 billion, lobby group says.

The trucking industry is at risk of being overcharged more than $1 billion over six years unless Australia’s governments reform heavy vehicle charges, the Australian Trucking Association (ATA) has warned.

The industry’s peak representative group has pushed for changes to the charging system, one day out from a ministerial meeting on the matter.

The National Transport Commission (NTC) told transport ministers in 2014 the existing formula used to determine fuel and registration charges was outdated and responsible for overtaxing truck and bus operators.

A new set of options has been presented to ministers to consider when they meet to decide fees for next financial year.

“We understand the NTC has provided ministers with three options. The best option would be for ministers to agree to eliminate the overtaxing immediately. This would see the road user charge fall from its current level, 26.14 cents per litre, to 25.3 cents per litre in 2016-17. The vast majority of heavy vehicle registration charges would also fall,” ATA CEO Chris Melham says.

Transport ministers are expected to consider a freeze to existing charges during tomorrow’s meeting.

“But freezing government revenue wouldn’t solve the problem. It would overtax the truck and bus industries by more than $1.2 billion over the next six years, in addition to the overcharging in 2015-16 and previous years,” Melham says.

He adds that transport ministers need to recognise that charges significantly affect the competitiveness of trucking operators.

“The problem is made worse by the high upfront costs of heavy vehicle registration charges, which create cashflow difficulties for small businesses,” he says.

The Federal Government froze the fuel excise in its 2014-15 and 2015-16 budgets, in recognition of the problems with the charging model.

The Australian Livestock and Rural Transporters Association, the Queensland Trucking Association and the South Australian Road Transport Association have also lobbied for a reduction in heavy vehicle charges to offset the overcharging that has occurred.

Extracted in full from Owner Driver.