Transporters ‘kicked in the guts with’ massive 6 per cent increase in fuel excise, each year for three years

Increases in road user charges for transporters has been described as a “kick in the guts” for an industry rapidly losing business owners because of mounting compliance and running costs. The Federal Government last week increased Heavy Vehicle Road User Charges by a whopping 6 per cent each year for three years, from 27.2¢ per litre of diesel from July 1, to 32.4¢ per litre in 2025–26. The increase is expected to raise a further $1.1 billion across four years. Livestock and Rural Transporters Association of WA president David Fyfe said it was disappointing that his national association had been calling for a 3 per cent increase in road user charges before COVID but nothing happened. “We had been calling for a 3 per cent increase for years but nothing happened,” Mr Fyfe said. “Then they announce this 6 per cent. “It’s a fair whack.” Introduced in 2006, the impost applies to each litre of diesel used by trucks, buses and coaches, and was created to fund road maintenance and repairs. In addition, registration charges are also increasing by 6 per cent, except in WA where it will increase 2.5 per cent from July 1. Mr Fyfe said the transport industry wanted to pay its fair share, but fuel was its biggest cost and the 5¢/L increase was going to hurt. “Diesel fuel is our biggest cost,” he said. “When it goes up it’s going to affect customers because we have to pass it on. National Road Transport Association chief executive Warren Clark said the rising fees would raise $101 million in the next financial year and more than $391m by 2026-2027. “That’s more than a billion dollars trucking businesses will have to find somewhere and if they can’t pass it on to customers and ultimately consumers, they will go under,” he said. Australian Dairy Farmers president Rick Gladigau said the increase would also likely hit primary producers, both in feed and delivery costs, and put further pressure on their businesses. “The rise in the heavy vehicle tax will certainly be an impost on dairy farmers as freight costs will increase for milk, hay, grain and everyday needs, and these are likely to be passed on to farmers,” he said. The Federal Government said the increase in rate would decrease expenditure on the fuel tax credit by $1.1b over four years from 2023–24. The change to the road user charge was a decision of infrastructure and transport ministers (excluding WA) in April, to contribute to road maintenance and repair, and was said to “strike the right balance between the need to move back towards cost-recovery of the heavy vehicle share of road expenditure and the need to minimise impacts on this vital industry. Mitchell’s Transport chief executive John Mitchell said the decision to increase charges was the wrong one to make and they should be thinking of decreasing the charges instead. “Why can’t it come down?” Mr Mitchell said. “Operators could then afford better equipment and machines.” He said the transport industry contributed about $50b to the national economy and its members deserved a say on how the Government approached its decarbonisation goals and road maintenance and upgrade spending. Western Roads Federation chief executive Cam Dumesny said the biggest customers to feel the increase in charges would be regional customers. “It’ll be incremental, there won’t be a massive skyrocketing in fruit and vegetable prices in Perth but it’s another inflationary pressure on transport companies that will flow through to retailers inevitably,” Mr Dumesny said. “If the Treasurer’s objective was to contain inflation then measures like this are counteractive . . . (they say) it provides certainty to industry — it’s as much certainty as a kick in the guts, to be frank. “What they’re forgetting is we’re already getting transport companies going under — it’s the same underlying problems that operating costs are rising faster than margins when there are already tight margins. “You start to expect some companies to fold.” Mr Dumesny said Australia needed a national freight and logistics strategy that encompassed road, rail, sea and air, because a lack of integration and co-ordinated planning nationally was ultimately increasing freight costs. “The problem is that it’s incremental but it’s a whole series of incremental cost increases . . . and they all begin to add up,” he said. “People keep talking about a recession coming — (this) increases the vulnerability of our industry and companies coming into a period of economic uncertainty.” In the Federal Budget $20.9m was provided for five years from 2022–23 for initiatives to decarbonise the transport and infrastructure sectors, including $7.8m to develop a Transport and Infrastructure NetZero Roadmap and Action Plan to support the decarbonisation of the transport and infrastructure sectors.