Fuel tax to tip $698m into government coffers

<b><font color=red>BUDGET</font></b>: Transport operators will contribute almost $700 million to government revenue when fuel excise increases on July 1

By Brad Gardner | May 10, 2012

Transport and logistics operators will contribute almost $700 million to the Federal Government’s bottom line when a 2.4 cents-per-litre increase to the fuel excise kicks in on July 1.

Budget papers show the government’s decision to increase the excise to 25.5 cents will recoup $698 million from the industry over four years.

The increase will coincide with significantly higher registration charges, which will be partially offset by a reduction in A-trailer fees.

According to the papers, the increase in the excise will cost the trucking industry $166 million next financial year, rising to $172 million in 2013-14.

Operators will fork out $177 million in 2014-15 and $183 million the following year.

"The change to the road user charge was recommended by the National Transport Commission (NTC) and agreed by the Commonwealth and state and territory transport ministers," the budget papers say.

"The NTC is responsible for conducting an annual assessment of these charges to ensure they remain in line with heavy vehicle share of road use."

However, the introduction of the carbon tax means the government is likely to strip far more from the industry than what is listed in the Budget papers.

The tax will apply to trucking from July 2014, leading to 6.85 cents-per-litre increase in fuel prices through a reduction in the fuel tax credit rate.

Transport ministers will meet on May 18 as part of the Standing Council on Transport and Infrastructure (SCOTI), and the trucking industry is lobbying for them to rethink their March decision to increase fuel and registration fees.

"At the meeting they should reconsider or defer this tax increase given the budget forecasts and the tight or negative margins across the industry," Australian Trucking Association (ATA) Chairman David Simon says.

While budget papers forecast the Australian economy to outperform most of the developed world in 2012-13 and 2013-14, it indicates industries outside of the resources sector are likely to struggle.

"Strong growth in the resources sector is expected to continue to spill over into other sectors, including parts of the construction sector, parts of manufacturing and parts of the services sector," the Budget papers say.

"However, conditions remain difficult for those sectors not benefiting directly or indirectly from the resources boom. Many sectors are facing challenging conditions from the high Australian dollar, ongoing global instability and uncertainty, and consumer caution."

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