Where does trucking stand after the budget?

After many days of claims, counter-claims, disinformation and general information overload, the picture around future taxation and funding affecting the trucking industry has become clearer. The news appears to be good with no major changes feared by the industry coming to fruition, for now!

 

The process started at the end of last week with the announcement from the Standing Council on Transport and Infrastructure (SCOTI) the road user charge for trucks would remain unchanged in 2014-15 at 26.14 cents per litre. This had been widely expected despite the National Transport Commission’s advice stating registration charges should be decreased by 6.3 per cent and the road user charge lowered by 1.14 cents per litre.

 

Looking down the barrel of a harsh budget the State Roads Ministers, who make up SCOTI, were not game to reduce revenue in any way, and kept the charge at the same level. This decision leads to an increase in rego charges for trucks of 1.3 per cent as of July 1 this year.

 

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This was followed by a pre-budget leak of the plan to restart indexation of the excise charged on fuel, leading to rises in the rate on a twice yearly basis. This news was followed by claims the move would increase the price of food in supermarkets for the consumer, as a result of rising fuel costs.

 

This was an erroneous assertion as the road user charge is fixed for trucking companies. Because the fuel tax credit is given against the amount of fuel tax paid by an operator, at a rate of tax paid minus the 26.14 cents road user charge, the costs to the road transport industry will remain unchanged.

 

While the rest of the budget was all about cutting funding and raising taxes/levies/co-payments, the main area with increased funding was infrastructure and this includes a lot of road improvements and schemes to reduce congestion.

 

The list of major road spending expected to come on stream in the coming years is impressive. Plenty of spin will be involved in publicising exactly where funding is coming from, whether it is a state or federal initiative. The fact remains, a lot of spending from the budget is going into bricks and mortar road architecture. It’s a long list:

 

$6.7 billion for the Bruce Highway in Queensland
$5.6 billion for the Pacific Highway duplication in NSW
$3 billion for Melbourne’s East West Link, spread over both stages
$2.9 billion for the Western Sydney Infrastructure Plan
$1.5 billion for WestConnex, plus a concessional loan of up to $2 billion to accelerate Stage 2
$1.285 billion for the Toowoomba Second Range Crossing
$944 million for Adelaide’s North South Corridor Adelaide
$929.6 million for Gateway Motorway North in Brisbane
$611.4 million (in addition to $63.6 million already provided) for Gateway WA at Perth Airport
$589.7 million (in addition to $25 million already provided) for the Swan Valley Bypass in WA
$508 million for the Warrego Highway in Queensland
$400 million for the Midland Highway in Tasmania
$307.8 million for the Great Northern Highway upgrades in WA
$263.4 million for the Western Highway Ballarat to Stawell duplication in Victoria
$232 million for the Goodwood and Torrens Junctions upgrade in SA
$111.1 million for the Majura Parkway in the ACT
$77 million for the Northern Territory Roads Package

 

For the trucking industry this spending needs to come on stream as soon as possible.

 

“With funds for a number of major infrastructure projects not scheduled to flow for a number of years, it is imperative that all governments act with a sense of urgency and deliver on road and rail projects receiving funding next financial year to improve efficiency and boost productivity,” said Michael Kilgariff, Australian Logistics Council Managing Director.

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“This is particularly important against the backdrop of a relatively tough budget for many parts of the economy, the more efficient movement of freight across our domestic supply chains ultimately benefits all Australians and stimulates much needed economic activity.”

 

 

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Author: Tim Giles

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