Hidden detail in fuel tax cut ‘will add $20 to grocery bills’, as ‘perfect storm’ ramps up costs
Aussies are already feeling the pain at the checkout – but a “perfect storm” could be about to send prices skyrocketing further.
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The Government has been spruiking its fuel tax cut for weeks now – but one botched detail could send the cost of everyday staples soaring.
That’s according to the trucking industry, which has warned in a letter to Prime Minister Scott Morrison that the abolition of the fuel tax credit – which was meant to ease cost of living pressures – could actually add an extra $20 to grocery bills.
“The food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax credit,” Australian Trucking Association chairman David Smith wrote in the letter, obtained by news.com.au.
“They can only do this through increased rates or a new fuel tax credit levy or other mechanisms.
“Unless this is resolved, it is estimated that this will add $20 per week to the average household’s food bill. This will negate the cost of living relief which the Government sought to provide.”
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The Morrison Government announced the fuel tax change on budget night in late March, revealing it would temporarily reduce the fuel excise by 22 cents per litre in a bid to ease the pain felt by many Aussies at the bowser.
Before the cut came into effect, the fuel excise was 44.2c per litre, but truckies scored a 17.8c per litre fuel tax credit, which included a refund of the excise, minus the Government’s 26.4c per litre road-user charge.
But until late September when the cut expires, the fuel tax credit has been removed and the road user charge slashed to 22.1c – and truck drivers are only seeing a 4.3c per litre reduction in diesel bills, which the industry warns is unsustainable.
According to Mr Smith, these “unintended consequences” mean the future of 53,000 trucking businesses are now in limbo.
Meanwhile, the Coalition claimed the measure would save households an average of $700 – which would be all but negated if groceries were to rise by $20 as a result.
‘Perfect storm’ driving up prices
However, the fuel tax change is not the only factor impacting prices for everyday essentials.
Grain farmers are also feeling the pinch as a result of soaring fertiliser costs in addition to skyrocketing diesel and labour prices, with data from Thomas Elders Markets revealing the cost of sending fertiliser to Australia had jumped by a staggering $718 per tonne since last May as a result of the war in Ukraine and the rising cost of natural gas.
“Together with the supply chain problems in China – which produces much of the world’s fertiliser – and now the Ukraine war, it’s been a perfect storm,” GrainGrowers chairman Brett Hosking told 9 News.
That is expected to reduce yields in the months ahead, ultimately leading to higher prices for the consumer.
Theft explodes as prices go through the roof
The rising cost of essentials is leading to an explosion of thefts in supermarkets, as cost of living pressures drive some to petty crime.
According to 9 News, there has been a huge spike in theft in Melbourne in particular, with Sonsa Markets’ Lorenzo Perrone claiming the rate of thefts had “definitely increased” recently – which also forces businesses to raise prices to cover the losses.
In fact, National Retail Association’s Dominique Lamb confirmed that retail crime costs the industry an eye-watering $9 billion a year.
Power bill hike
Meanwhile, the Australian Energy Market Operator’s latest report has revealed wholesale electricity prices have more doubled in just 12 months, sparking speculation of price rises.
Mariam Gabaji, energy expert at comparison site Finder, said now was the time to shop around.
“You have two different types of energy plans on the market: those that offer fixed rates for a certain period (such as 12 months) or others that have variable rates,” she explained.
“If you don’t like switching electricity plans often in search of the cheapest variable rates, you’re likely to benefit from a fixed rate plan instead.
“However keep in mind one of the best ways to save on energy is by switching your energy provider. Finder analysis shows this could save you up to $415 each year.”
Originally published as Hidden detail in fuel tax cut ‘will add $20 to grocery bills’, as ‘perfect storm’ ramps up costs
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