Industry says no to Victorian truck tax

Truck tax

The response to reports of a truck tax to be imposed on heavy vehicles delivering freight into the Port of Melbourne has been a resounding ‘no!’ from the transport industry.

Word emerged in early February that the Victorian government is considering charging between $150 to $250 per container in tax (based on the vehicle’s age and carbon emissions) to put towards funding for rail freight.

But industry voices have said that this is not the right way to go about developing the rail freight network in Victoria, and will only put more pressure on those delivering freight into the port by road.

Victorian Transport Association CEO Peter Anderson says that while no official conversation has taken place between the state government and the industry organisation, he would vehemently oppose any proposal of a truck freight tax.

“What’s been reported doesn’t make sense,” he says.

“An emission tax on a large proportion of the industry that doesn’t use rail, it doesn’t make sense. You’re combining two issues into one, and it doesn’t follow logic. You’re just putting a tax on a tax.

“We certainly as an industry wouldn’t support it in any shape or form. If it was to come into being or be announced then we would be up in arms over it.

“It doesn’t reflect what the industry’s about.”

According to expert reports, rail freight in Australia still has a long way to go before it can start to take on the load that is being taken on by road freight.

The Victorian government is currently aiming to have 30 per cent of containers moved by rail by 2050, in an effort to lower emissions by getting more trucks off the roads.

However, trucks are still taking more than the majority of the work at the Port of Melbourne, with rail investment still a work in progress.

Projects like the Port Rail Shuttle, which aims to connect freight company Salta’s terminal in South Dandenong to the rail network to allow easy access to the Port of Melbourne, are still a significant way off from completion.

Bundled in with the Level Crossing Removal Project, the federal government has put $18.3 million towards the project, with the Victorian government providing $9.7 million.

Anderson says it may not be enough to make a substantial change.

“When the Port Rail Shuttle comes into being, if it runs at its peak it’ll still be able to move only 13 per cent of containers off the wharf.

“It would be 87 per cent of the industry that would have to be taxed and they wouldn’t have a choice. So you’re just a mandating a tax.

“We’d want to ask where the money’s going to go to – back into transport?”

The worry of increased costs on transport operators and businesses that will come with a new tax is also a concern for rural communities.

For local transport companies that service rural areas in Victoria, there is even less infrastructure available when it comes to rail freight.

Mildura City Council mayor Liam Wood says a freight tax would add unnecessary pressure to local businesses in the area.

“Given the ongoing need for major upgrades to the rail network, including completion of the Murray Basin Rail Project, our region is still heavily reliant on road transport, meaning we could be among regions hardest hit by this new tax,” he says.

“This means increased costs for our local transport operators, which will then be passed on to local growers and businesses transporting goods in and out of our region.

“And of course, it’s our broader community who will then feel the impacts of these increased costs at the checkout.

“We need more information from the Victorian government on how income from this new tax will be spent, the impact on regional areas, and how much of it will be invested in our region – whether its rail or road upgrades.”

While rail freight funding needs to be considered as Australia faces the continued need to lower emissions and address the driver shortage, Anderson says a truck tax is not the way to do it.

He expresses concern that it may even take trucks away from the Port of Melbourne entirely, given the option.

“Just taking on the current environment, it won’t take a lot of additional cost not brought to Melbourne, but being dropped off in Sydney and Adelaide,” he says.

“It’s easier to pick them up off the rail than the wharf.

“We’ve got things like the infrastructure tax which has gone from $5 to $155 in three years. We’ve got regular increases of stevedore charges which are coming at us thick and fast.

“We’ve got the Port of Melbourne wanting to increase its rent which is going to increase the pressure on us.

“That’s one of the issues that we have, that the cost of moving containers in and out of the Port of Melbourne is increasing far greater than any other port.

“This additional charge, if it was real, would just be another nail in the coffin for wanting to bring containers into Melbourne.”

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