Business Costs, Feature, Industrial Relations

QTA says rising costs show need for congestion tax

Owner Driver speaks to QTA CEO Gary Mahon about Queensland's proposed company taxes amidst rising congestion on the roads.

Rising fuel prices and steadily increasing congestion in Brisbane and surrounds has major transport companies considering charging ‘congestion taxes’ to their clients.

In an industry run on “tight margins”, sitting stuck in traffic and burning fuel is becoming a bigger issue than ever, says Queensland Trucking Association (QTA) CEO Gary Mahon.

While it is a move that has been brought up time and time again for the better part of the past 15 years in ‘Australia’s most congested city’, the signs are pointing to a more cohesive, industry-backed push this time around.

Reports have emerged of at least one Queensland-based company seriously considering the tax, as Mahon says the QTA has entered discussions with several.

“Larger companies are giving us the feedback that they’re only able to do two trips across a particular section of the capital city versus where they might have been able to give four journeys in more recent times,” he tells Owner Driver.

“We’ve got additional costs in fuel burn and a range of other costs to do with drivers sitting in congested roads.

“One way or the other, we’ve got to do something about these increasing costs, particularly with the ever-increasing cost of fuel.”

As of November, the Australian Institute of Petroleum estimates that the national average price per litre has risen to 217.7c for diesel, and 200.9c for unleaded.

Industry forecasters warn of even greater spikes as the end of the year approaches, according to Mahon, as global oil prices continue to rise.

“There’s no sign of any relief coming with fuel,” he says.

“More and more commentators in that space are saying in the lead up to Christmas we’re going to suffer even more increases.”

Long gone are the days of these sorts of prices.

The calls for the congestion tax come amidst a major shift in the transport sector, with the federal government releasing the Infrastructure Policy Statement on November 14.

Setting out parliament’s ‘strategic themes’ for its transport infrastructure, there has already been hot debate over what it means for the industry.

Industry association NatRoad says that the statement shows the government heading in the right direction, while warning of the implications of further taxing of the road transport industry.

They believe that if it is implemented correctly, Australia can “reap a national dividend from strategic investment in infrastructure”.

But Mahon disagrees, saying that the transport industry could be negatively affected by the government’s shift in focus towards what it says is firmly on productivity, sustainability, and liveability.

“We’re substantially disappointed in the announcement by the federal government minister for transport and infrastructure about changing the priorities of road investment around the country,” he says.

“We would argue that there’s a dire need in this country for a much more progressive investment in the road freight network so we can develop a more efficient supply chain around this country.

“We’re a very large country by geography, we’re highly dependent on road freight.

“Rail provides a solution to parts of the economy, but as a country we’re going to be highly dependent on road freight for a long time yet to come. We don’t see any progressive thinking to link substantial freight network investment to low-carbon replenishment.”

RELATED STORY: NatRoad warns of road tax risk in infrastructure statement

Mahon says that one of the areas aside from congestion that is contributing to the consideration of taxing companies harder is how the government utilises toll roads.

It is a major cost for drivers, he says, that could be avoided with the implementation of a different system.

“Most toll roads are relatively empty after about 9 or 10 at night,” Mahon says.

“Why are we paying full price during the night for many of these distribution centres or other places that require reasonably large distribution of loads?

“Maybe you could consider utilising some of that technology during the late hours.

“I’m not necessarily professing that we should work 24/7, but if you can make some of these opportunities available, various fleets might consider the benefits of using different parts of the network at different times and capturing that in their logistics.”

More than anything however, the QTA would like to see greater investments in the country’s roads with the trucking industry in mind.

The QTA wants to see greater investment in Australia’s roads.

Mahon believes the growth of the industry will see the demands for transport outweigh what is possible to deliver on Australia’s road network.

“One way or the other we’re going to need to either invest differently in our roads, start to think differently about how trucks are utilised within the network,” he says.

“We would argue that one of the problems in this country over the last 100 years is that principally we design roads for cars, and we let trucks use them.

“We’ve got competent forecasters in this space suggesting that we’ll have 26 per cent growth in road freight over the next three years. That exceeds population growth. We’re looking at 40 per cent growth by the end of the decade. One way or the other we’ve got to deliver that freight.

“We need to be ready, and we’re not seeing evidence of progressive and strategic investment and decision-making being made to make those roads efficient and as safe as possible.”

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