Truck charging system broken

Australia’s truck charging system is broken and must be fixed, the CEO of the Australian Trucking Association, Andrew McKellar, said today.

Mr McKellar was responding to the decision by transport ministers last night to increase truck fuel and registration charges by substantially more than inflation from June 2021.

“Treasury’s inflation forecast for 2021-22 is 1.5 per cent, but governments have decided to increase the charges paid by Australia’s hard working trucking businesses by 2.5 per cent,” Mr McKellar said.

“The decision will increase the registration charge for a workhorse prime mover and semitrailer by $144 a year, and the effective rate of fuel tax by 0.6 cents per litre.

“This increase is more than many trucking businesses can afford. In a recent survey we ran, more than a third of the trucking businesses that participated told us their business activity was still down compared to immediately before the bushfires and the start of the pandemic.

“Trucking businesses also have great difficulty passing charge increases on to their customers.

“Only 13 per cent of the businesses in the survey said they were able to pass on both registration and fuel price changes. Small businesses had the greatest difficulty passing on charge increases, but even larger businesses found it difficult to pass on cost increases more than the inflation rate.

Mr McKellar said the decision could have been much worse, with the NTC’s charging model, PAYGO, recommending a 13.4 per cent increase in charges.

“The PAYGO output highlights the serious and growing problems with model. Under the model, charges are driven entirely by governments’ spending plans, even if those priorities are inconsistent with the industry’s requirements or ability to pay,” he said.

“Charges can increase sharply from year to year, which makes it very difficult for businesses to make decisions about their own prices, particularly when they sign multi-year contracts.

“The model is broken and must be fixed.

“In addition, governments need to put in place measures to improve the cashflow of trucking businesses.

“We need restrictions on payment times longer than 30 days, the extension of price regulation to truck tolls and port access charges and changes to allow businesses to pay truck registration charges by monthly direct debit,” he said.

Read the ATA submission on the original charging proposal

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