Transport minister says carbon tax’s impact will be “tiny”– about $35 extra driving a B-double from Sydney to Melbourne
By Brad Gardner | October 11, 2011
A carbon tax will have a “tiny” impact on the trucking industry’s fuel bill, according to Transport and Infrastructure Minister Anthony Albanese.
Speaking in Parliament today on the Federal Government’s Clean Energy Bill, which will introduce the tax on July 1 next year, Albanese claimed price rises would be marginal in the context of the fluctuating changes at the bowser.
Under the government’s plan, heavy vehicle operators will pay the carbon tax through a 6.85 cents-per-litre reduction in the fuel tax credit from July 1, 2014.
Light vehicles have been permanently excluded from the carbon tax, which will begin at $23 per tonne and rise to $24.15 the following year. It will reach $25.40 per tonne on July 1, 2014 and shift to an emissions trading scheme in 2015.
“In the case of heavy vehicles, operators will have a two year transitional period to reconfigure their fleets and re-negotiate contracts with customers,” Albanese says.
“Trucks powered by CNG, LNG, LPG or biofuels will be permanently excluded. Once in place in 2014, the carbon price will have only a marginal impact on fuel bills. In fact it will [be] tiny compared with fluctuations we regularly see at the bowser from variations in world oil prices.”
Albanese says the cost of driving a B-double between Sydney and Melbourne, based on today’s diesel prices, will be about $35 more.
In its report commissioned earlier this year by the Australian Trucking Association, the Centre for International Economics rejected claims diesel prices would rise dramatically under the carbon tax.
It says diesel prices already fluctuate by around 7 cents-per-litre on a regular basis.
“Therefore, while the imposition of a carbon price on diesel fuels will be an additional cost to the industry, it should not be outside of the scale of price increases that are observed through the market,” the report says.
Inverell Freighters Managing Director Keri Brown believes the tax could add an extra $350,000 to the cost of running his business because he will not be able to pass it on to his customers.
“The one increase they will not accept in a fuel levy nearly across the board is when you get a reduction in the diesel fuel rebate. You end up having to absorb that yourself, so in effect that is a fuel increase as a cost that we cannot pass on,” he told a Senate inquiry in August.
Brown says the tax might force him to close the business and that small operators will look to cut corners on maintenance to try and maintain a profit.
But with transport accounting for 15 percent of total greenhouse emissions, Albanese says he feels particular responsibility for dealing with climate change. He says around 87 percent of transport emissions stem from road transport and light vehicles.
“It would simply not be fair to leave it to our children and grandchildren to deal with the consequences of our inaction. Because if we do nothing, dangerous climate change will impact on this and future generations,” Albanese says.
“There is only one planet. Let’s treat it, and all of us that depend on its health, with respect. We must not be condemned by history as the generation that knew but did nothing.”