'Fuel tax' sends costs soaring for business

Axing Queensland’s fuel subsidy will tax transport operators heavily and push up cost of goods, QTA says

'Fuel tax' sends costs soaring for business
'Fuel tax' sends costs soaring for business
Axing Queensland’s fuel subsidy will tax transport operators heavily at a time when they will struggle to pass on the extra costs to customers.

That’s according to the Queensland Trucking Association (QTA), which has hit out at the decision by the Queensland Government today to cut the 8.3 cents per litre subsidy on petrol and diesel to help pay back billions of dollars in debt.

Queensland Premier Anna Bligh says the decision by the New South Wales Government to axe a similar subsidy in northern NSW aided the decision to scrap the Queensland rebate.

But QTA CEO Peter Garske calls that "misleading".

"Any comparison with the limited subsidy administered by the NSW Government in northern NSW, soon to be abolished, fails to take into account the significant benefit received state-wide by consumers as the consequence of reduced freight rates," he says.

The QTA says transport operators face cost increases of between 18 and 25 percent per year once the subsidy is cut on July 1.

Trucking operators also face steep registration fee increases from July under an agreement struck by all state governments.

For a transport company employing 20 people the increases to registration and fuel costs will cost an extra $100,000 per year, the QTA says.

"Trucking operators are experiencing an economic time where the focus of their clients is to ‘cost and control’. Passing on increases in such a competitive market will simply not work due to the volume of idle trucking fleet currently unused or under utilised," Garske says.

"Absorbing the increase costs will lead to further job losses and downsizing of freight operations."

Garske says the decision amounts to a fuel tax and will send the price of goods higher.

"In the longer term regional communities, importers, exporters, agricultural producers and manufacturers will feel the impact of increased freight rates which will threaten jobs and be counter-productive to the Premier’s stated goal of protecting employment."

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