Government freezes Heavy Vehicle Road User Charge

By: Greg Bush

Federal Government praised for taking action to support freight operators during the Covid-19 pandemic

Government freezes Heavy Vehicle Road User Charge
The Road User Charge will remain at 25.8 cents per litre for diesel for the next two financial years.


Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development, Michael McCormack, has announced that the Federal Government will keep the Heavy Vehicle Road User Charge (RUC) at its current level for the next two years.

The minister says the decision, announced on May 1, will save Australian truck owners and operators hundreds of dollars a year.

"The Road User Charge, which is set to recover the heavy vehicle share of road maintenance and improvements, will stay at 25.8 cents per litre for diesel in 2020-21 instead of increasing by the scheduled 2.5 per cent," Minister McCormack says.

"Our response demonstrates our commitment to supporting the heavy vehicle industry as we put Australia in the best position possible to deal with the Covid-19 outbreak.

"Australia’s heavy vehicle industry is crucial to sustaining our economy and distributing critical goods during the Covid-19 pandemic. This freeze will ease some of the current pressures on the industry.

"It is so important we help maintain the supply and flow of medicines and medical equipment and food and essential items to our supermarket shelves at this time. Road freight is absolutely critical to this," the minister says.

Assistant Minister for Road Safety and Freight Transport Scott Buchholz says all levels of government are continuing to work together, along with industry and regulators such as the National Heavy Vehicle Regulator, to minimise any unnecessary barriers to freight movement.

"Following the closure of some state and territory borders, the Federal Government has been coordinating national action to make sure essential workers who aren’t travelling in trains or trucks such as safety inspectors, mechanics and maintenance crew, are able to get to where they need to be with limited disruptions," Buchholz says.

"The Australian Health Protection Principal Committee and the National Cabinet have also approved an exemption for roadhouses, dedicated truck stop facilities and truck driver lounges to remain open so Australia’s heavy vehicle drivers have access to showers, restrooms and facilities to undertake their mandated fatigue management breaks. This is critical to keeping freight moving during the Covid-19 pandemic.

"I have been working very closely with industry throughout this pandemic, hearing from operators large and small.

"As a government we acknowledge the transport sector has had two speeds during this pandemic. There are those that have been working relentlessly with greater amounts of freight to move, while many other operators across the supply chain have experienced the opposite and suffered as a result of Covid-19.

"These measures go some way in demonstrating all levels of government recognise the pressure on the transport industry at this time.

"The government has the back of these hard working Australian men and women of the transport industry who continue to work so hard to ensure critical supplies reach Australians when and where they need them," Buchholz says.

ATA calls for Road User Charge deferral

The decision to not increase the Road User Charge on July 1 has been widely welcomed across the transport industry.

NatRoad CEO Warren Clark says maintaining the current 25.8 cents per litre for diesel over two financial years was recognition for the road transport industry’s contribution to sustaining the Australian economy and delivery vital goods during Covid-19.

"The freeze will help relieve some of the financial pressure many businesses are feeling during this time," Clark says. "The work of the Deputy Prime Minister and Assistant Minister Scott Buchholz should be recognised and applauded.

"Transport operators have tight profit margins and any steps to reduce operators’ costs is helpful in business survival."

Clark says 2020 has been a challenging year for the industry with the double impact of the bushfires and now Covid-19.

"This is a win for our industry," he adds. "The next step is for states and territories to either freeze or reduce the burdensome heavy vehicle registration charges which are also due to rise by 2.5 percent from July 1."

Australian Trucking Association chair Geoff Crouch says every trucking business will benefit from the Federal Government’s decision to cancel the proposed increase in the tax on truck fuel.

He says it recognised that 2020 is not the time to increase taxes on the businesses delivering Australia’s essential food, medicine and other goods.

"As a result of the pandemic, Australia is likely to experience the biggest contraction in national output and income since the Great Depression," Crouch says.

"Australia’s 50,000 trucking businesses simply could not afford to pay more in taxes and charges."

Australian Livestock and Rural Transporters Association of Australia (ALRTA) president Stephen Marley went further, saying the RUC freeze was welcome news for all Australian businesses and consumers.

"Over the past 12 months the Australian economy and community has been pummelled by crisis after crisis including drought, bushfires, floods and Covid-19," Marley says.

"During these difficult times Australian governments, businesses and consumers more keenly recognise the essential role of the road freight sector in delivering vital supplies including medicines, fuel, food, drinks, personal consumables, stock feed and water.

"Trucks not only help us through crises, they help us rebuild afterwards.

"The Federal Government decision to freeze the Road User Charge will keep road transport costs to a minimum over the next 12 months. This will in turn help support millions of Australian businesses and households during the Covid-19 recovery phase. An increased tax on trucks would have been an increased tax on everyone."

Marley thanked both Michael McCormack and Scott Buchholz for consulting with the ALRTA during both the bushfire and Covid-19 crisis.

"These two leaders have championed a sensible and pragmatic decision at a time when government revenue is also under threat."

Despite this, Marley says during the years from 2014 to 2019, the road transport industry was overcharged more than $1 billion.

"If ever there was a time to rebuild trust by giving some of it back, now is that time."

However, while Queensland Trucking Association (QTA) CEO Gary Mahon congratulated the Federal Government, he says the QTA will continue to advocate the cause for a reduction in the 30 percent JobKeeper threshold. He believes the current rate is too high for the road freight industry.

"We provided case study modelling to government with evidence to indicate that many will be forced to cease operations before getting anywhere near a 30 percent downturn," Mahon says.

He adds that the road freight industry has performed a key role on the frontline of the Covid-19 pandemic.

"The road freight industry should be well commended for currently having no reported infection outbreaks."

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