Truck drivers are warning households face paying $20 extra a week for grocery essentials because the federal Coalition has bungled a centrepiece of its budget cost-of-living measure to cut the cost of petrol.
In a letter to Prime Minister Scott Morrison, a copy of which has been obtained by The Sydney Morning Herald and The Age, 11 trucking organisations demanded an immediate meeting with him to work out a solution to the “unintended consequences” caused by the effective abolition of the fuel tax credit.
Warning that some truck driving businesses had already gone under, Australian Trucking Association chairman David Smith told Morrison the budget night decision was undermining the government’s own policy to reduce cost-of-living pressures on voters.
“The food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax
credit,” he wrote.
They can only do this through increased rates or a new fuel tax credit levy or other mechanisms. Unless this is resolved, it is estimated that this will add $20 per week to the average household’s food bill. This will negate the cost of living relief which the government sought to provide.”
A $20-a-week increase in groceries would almost wipe out the estimated $700 saving the government estimates the average household will receive due to the cut in fuel excise.
Pre-budget, fuel excise was 44.2¢ a litre, but truck drivers received a fuel tax credit of 17.8¢ a litre – a rebate of the excise, minus 26.4¢ a litre, which is kept by the government as a road-user charge.
The budget-night decision to halve the fuel excise meant the road-user charge was higher than the fuel excise. Until the end of September, the fuel tax credit will be reduced to zero, and the road-user charge will be effectively cut to 22.1¢, meaning truck drivers will only see a 4.3¢-a-litre cut in their diesel bills compared to the 22.1¢ enjoyed by the rest of the population, and will no longer get a rebate cheque at the end of each month.
Ahead of the decision, the government had been warned the change could cause financial difficulties to truck driving businesses, which relied on the fuel tax credit to offset their monthly or quarterly Business Activity Statement (BAS) tax obligations.
Morrison was directly told by a trucking representative of the problem the move had created.
Smith said in his letter that not only would the Coalition’s plan force up the cost of groceries, it would force many truck drivers off the road.