Fuel excise cut to cost truckies $700m over six months

It was supposed to be a big saver for motorists but SA’s transport bosses are warning the Coalition’s big budget petrol play is devastating for their business.

Trucking companies will be left “devastated” by the government’s recent cut to the fuel excise, the industry has warned.

South Australian Road Transport Association chief executive Steve Shearer says freight companies will lose out on $700m across the country after the government cut a vital diesel rebate in last month’s federal budget.

The Fuel Tax Credit, a rebate which offered freight companies around 18 cents per litre cashback on diesel, was reduced to zero when the government halved the fuel excise.

Despite calls for support, Mr Shearer said the government had failed to acknowledge the problem.

SARTA executive director Steve Shearer.

“The federal government and agencies continue to be in denial about this,” he said.

“They don’t understand the business realities of road freight because they utterly failed to consult with the industry.”

“The six months of the temporary fuel excise reduction … will be devastating for trucking businesses and send many truck operators broke, causing major supply shortages in stores.”

According to Mr Shearer, the change left truckies worse off because they also lost a fuel levy which was placed on freight charges to combat fluctuating fuel prices.

Due to the reduced cost at the bowser for everyday motorists, freight companies were forced to scrap the levy, which acted as a safety net, due to the competitive nature of the freight market.

The government maintains that heavy vehicle operators will be better off with upfront costs at the bowser lowered despite the industry raising the issue.

“All road users will be better off as a result of the Government’s decision, including truckies,” Treasurer Josh Frydenberg said.

Wendy Fennell, of Mount Gambier trucking company Fennell Forestry, said her business had been hit hard.

Prime Minister Scott Morrison in a Sydney factory media event with treasurer Josh Frydenberg. Picture: Jason Edwards

“We’re actually negatively impacted,” she said.

“The government needs to hear the industry’s concerns.

“It was very poorly thought through.”

Ms Fennel’s 15-strong fleet of trucks transport timber to Western Australia and travel tens of thousands of kilometres every week, with fuel costs making up 25 to 35 per cent of her business’ bills.

Ms Fennell, a Mount Gambier local who has run her company for 30 years, said there was a genuine fear among small freight operators that an extension to the fuel excise cut will mean trucks will need to be parked.

With higher freight bills expected to drive up the price of goods, Ms Fennell said consumers “shouldn’t have to pay for this”.

The government has not confirmed whether or not it will reinstate the rebate for freight companies.