Political fix on carbon tax risks more urban congestion: ALTA

ALTA believes government plan to exempt light commercial vehicles from carbon tax on fuel will propel increase in urban congestion

By Brad Gardner | July 5, 2011

The Federal Government’s decision to exempt light commercial vehicles from paying a carbon tax on fuel risks increasing urban congestion, an industry group claims.

The Australian Livestock Transporters Association (ALTA) has joined its industry counterparts in criticising the government’s decision to shield select groups from a carbon tax on fuel.

Climate Change Minister Greg Combet says families, tradesman and small businesses operating light commercial vehicles will all be excluded.

"Light rigid truck fleets are going to have a real incentive to swap across to LCVs, pushing emissions even higher and adding to urban congestion," ALTA Executive Director Philip Halton says.

"Applying a carbon tax to trucking, while leaving cars and light commercial vehicles out, is a political compromise. It’s not a consistent policy approach."

Halton made the comments in a newsletter to ALTA members, where he also argued the industry would need to focus on securing a workable solution if the government followed through on its plan to slug trucking operators with higher fuel bills.

"While it’s clearly a second-best option, something to think about could be pushing for a carbon tax to work like the GST: we could ask for a legal framework that makes it easier to pass on the costs of fuel to our customers," he says.

"It wouldn’t be as good as winning an exemption, but it would be a whole lot better than being stuck with the bill and having nothing more to say about it."

Halton says the industry must not be hit with an increase in paperwork if one system is brought in for trucks and another for general motorists.

While the Australian Trucking Association (ATA) understands the government will adjust the fuel tax credit if the carbon tax applies specifically to trucking operators, Halton believes increases will be applied upstream.

"The word from the government today appears to be that, if diesel is going to subject to a carbon tax, it will be levied at the refinery stage with refiners paying for emissions and simply passing on the cost at the pump," he says.

Halton says a dual system will be "a mish-mash of a policy", following on from comments made yesterday by ATA CEO Stuart St Clair who described the government’s approach as "an ad hoc arrangement".

Halton also points out that while the trucking industry’s emissions have increased due to the growth in the freight task, the majority of road transport emissions stem from passenger cars and light commercial vehicles.

Furthermore, Halton says CO2 emissions from cars and light commercial vehicles are outstripping growth in emissions from the trucking sector by 25 percent.

Prime Minister Julia Gillard will unveil her carbon tax package on July 10 after reaching an agreement with the Greens and independents.

Under the Carbon Pollution Reduction Scheme proposed by former Prime Minister Kevin Rudd, the trucking industry would have received a one-cent reduction in the fuel excise for every one-cent increase in the price of fuel.

Rudd’s plan, which failed to gain enough support to pass Parliament last year, would have introduced the subsidy for one year to give trucking operators time to adjust to the CPRS.

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