The tax on truck fuel would more than double under the Productivity Commission’s plan to hike truck taxes, Australian Trucking Association (ATA) Chair, Mark Parry.
Parry made the call as he released the ATA’s 2026-27 pre-budget submission, which urges the Government to reject the plan.
The ATA says the mooted plan would phase out fuel tax credits for trucking operators, while ATA submission argues that the Government should retain fuel tax credits for on-road heavy vehicles in the 2026-27 budget and beyond.
Under the fuel tax credits system, trucking operators pay an effective fuel tax rate of 32.4 cents per litre rather than the full rate, which will be 52.6 cents per litre from Monday 2 February.
The Productivity Commission’s own figures have revealed its plan would more than double the effective fuel tax paid by trucking operators to 66.1 cents per litre by 2035, the ATA said.
Mr Parry said the fuel tax credit system reduced the cost of freight for everyone in Australia, as well as rural exporters.
“Removing fuel tax credits would increase costs for industry and hard-pressed Australian households, who have already had to face a 21.5 per cent increase in electricity prices and an 11.2 per cent increase in childcare fees in 2025,” Parry said.
“Many trucking businesses would not be able to pay the increased fuel tax, which would go up by about eight per cent each year.
“Trucking businesses have already had to pay a 19 per cent increase in fuel tax over the last three years, as well as dealing with rising costs, extended payment terms, driver shortages and natural disasters.”
The ATA Chair said the commission’s plan would not achieve its goal of encouraging decarbonisation.
“The commission’s report does not analyse the effect of removing fuel credits on emissions, but I can save everyone the time and trouble,” he said.
“Its effect would be zero, because it would not address the real world barriers holding back the industry’s adoption of low emission solutions.
“It would not address the engineering reality that there is no single technology available to replace diesel engines.
“Many regional communities rely on trucking operators to move and deliver all their daily necessities. This requires diesel engines, so the commission’s approach would just be an unavoidable increase in tax.
“For those businesses that do have an alternative to diesel, the effective tax increase would reduce their financial capacity to invest in new vehicles and equipment.
“Instead of taking up the commission’s advice, the Government should implement a voucher scheme to reduce the up-front cost of electrification or alternative fuel options, a low carbon fuel standard to encourage the use of renewable diesel and support high productivity and low emission vehicles,” he said.
See the ATA submission here.
Read about the latest round of HVSI funding from the Federal Government.
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