Trucking wins two-year exemption from carbon tax

The trucking industry will be exempt from the carbon tax until 1 July 2014. In contrast, many off-road users of fuel, including the mining and rail industries, will be subject to the tax from 1 July 2012.

The announcements are set out in the Government’s climate change plan, Securing a Clean Energy Future, released on Sunday. Under the plan, transport fuel will be taxed through changes to the fuel tax credits system.

On 1 July 2014, the diesel fuel tax credits received by trucking operators for on-road use will fall 6.858 cents per litre, matching the planned 2014-15 carbon price of $25.40. This is expected to cost the industry and its customers $510 million in 2014-15 alone. The industry’s fuel tax credits will then decrease each year as Australia’s carbon price rises.

Off-road fuel users, including the mining and rail industries, will be subject to carbon tax from 1 July 2012, when their diesel fuel tax credits will fall 6.21 cents per litre, consistent with the initial carbon price of $23 per tonne. Trucking businesses that claim fuel tax credits for off-road use, such as the fuel used in excavators or bobcats, will be affected, but only for the fuel they use off-road. Fuel used off-road in agriculture, forestry and fisheries will not be taxed.

ATA Chairman David Simon said the Government’s decision would give small trucking businesses a breathing space to increase their fuel efficiency and renegotiate contracts with their customers. “In the lead up to today’s announcement, the ATA argued strongly that trucking operators should be exempt from the carbon tax altogether,” Mr Simon said.

“In a series of meetings, including with Minister Combet’s senior staff, we pointed out that 85 per cent of trucking businesses have fewer than five employees, and a limited ability to pass on increases in their costs.

“We pointed out that the industry has reduced its greenhouse gas emissions by 35 per cent per billion tonne kilometres since 1990, as well as massively reducing its other emissions. This has cost the industry hundreds of millions of dollars.

“And we pointed out that business conditions for trucking operators were extremely tough. The ATA didn’t win outright, but we did secure a two-year exemption from the tax for the industry.

“I would like to thank the Government for listening. The exemption will give trucking operators time to renegotiate long-term contracts with their customers and look at how to improve their fuel efficiency.”

David said the Government would need to push ahead with fixing the road transport regulations and charges that prevent trucking operators from using the most efficient equipment.

“The ATA’s recent environmental report shows the industry’s ability to reduce its fuel consumption is restricted by government regulation, poorly thought out charges and a lack of research and development on energy-saving technology,” he said.

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