More than half of the state’s truck companies face bankruptcy

Truckies say Australia’s supply chain faces imminent collapse as they are forced to pay for a Morrison Government discount for other motorists.

The national supply chain faces imminent collapse as truckies are forced to keep funding the federal government’s fuel tax discount for other motorists, an industry body warns.

A South Australian Road Transport Association survey found 57 per cent of respondents said their companies would be bankrupted by the “disastrous” policy.

Truckies lost their diesel tax discount when the former Morrison government announced a six-month halving of the fuel excise tax in response to surging prices stemming from the Russian invasion of Ukraine.

The discount deal runs until September 30 but the association’s chief executive, Steve Shearer, said it would be too late for many struggling businesses.

He said that, with little consultation, the government decision had forced the industry to pay for the halving of the 44c a litre discount.

“The former Coalition government made a disastrous and ill-advised decision on the run to abolish the fuel tax credit payable to truck operators to fund 80 per cent of the fuel excise cut,’’ Mr Shearer said.

“What that meant was that the taxpayer funded only 4.3c a litre of the 22.1c a litre cut in fuel tax and the truck industry funded the other 17.8c a litre in a sleight-of-hand move.

“Truck operators claim the tax credit each quarter, ranging from $2000 to over $150,000, and no business can sustain the loss of such a significant portion of their funds.”

Unlike motorists, most truck operators purchase their fuel wholesale in advance and did not benefit when fuel retailers passed on the 22.1c a litre tax cut at the bowser.

Diamond Bros chief executive Kym McDermid said the tax changes had disrupted cashflow.

“Many small operators in particular may not survive to the reintroduction in September,’’ Mr McDermid said.

“There was no reduction as the fuel prices soared leaving operators bearing the cashflow and revenue implications.”

Truck driver Jim Demicoli and Kym McDermid CEO of Diamond Bros aren't happy with the federal fuel tax policy. Picture: Tom Huntley

Mr Shearer said the national supply chain for food and products relied on trucks that soon would be forced off the road.

“The supply chain is now facing imminent collapse, as the trucking industry on which it depends is collapsing with 57 per cent of truck operators facing financial collapse if the tax credit is not restored prior to the scheduled September 30 date,’’ he said.

Mr Shearer said a national trucking survey was not expected to produce different results.

“Ninety-two per cent of SA companies that feared bankruptcy said they could survive if the new Labor government fixed the Coalition’s blunder and restore the tax credit from July 1,’’ he said.

“To do so will mean the government itself would fund the full 22.1c a litre cut in fuel excise, as the (former) Coalition government should have done, instead of making the trucking industry pay 17.8c a litre of it and send the industry into a financially fatal spiral.

“The cost of fixing the Coalition’s blunder is $350m, which is a drop in the ocean of the federal budget and pales into insignificance in comparison with the looming economic collapse.”

The SA survey will go national next week as the industry seeks help from the Albanese government.

The incoming government will not be drawn on what it plans to do with the fuel tax policy.

Originally published as More than half of the state’s truck companies face bankruptcy