Truckie tax a warning for farmers

The federal government is assessing whether to increase heavy vehicles charges by as much as 30 per cent by 2025, raising the prospect of higher transport costs for farmers.

Farmers could be staring down the barrel of increased transport costs if a proposal to raise road use charges for trucks by as much as 30 per cent goes ahead.

Transport Minister Catherine King is assessing whether to ramp up the heavy vehicle charge for three years from July by either 6 or 10 per cent annually, to recover the amount the federal government spends on roads.

National Farmers’ Federation president Tony Mahar said the sector did not support either increase amid inflationary pressures already putting financial strain on the agricultural and transport sectors.

“The cost of freight has a direct impact on both prices for consumers and the profitability of farm businesses. While the NFF recognises and supports the need for sufficient road expenditure, we do not support either proposed change to heavy vehicle charges,” Mr Mahar said.

“The proposed increased costs come at a time where the cost of production is increasing for Australian farmers.”

Road user charges have stagnated since Covid, but the increase being proosed from July this year has the transport and agriculture industries alarmed. Picture: Andy Shaw/Bloomberg News.

The proposal would see the road user charge increase to either 32.4 cents per litre or 36.2 cents per litre by July 2025.

It follows a freeze on charges in 2020-21 due to the contraction in economic activity during the pandemic, and then a rise of 2.5 per cent in 2021-22. This is despite a rise of 13.4 per cent being necessary to recover the heavy vehicle share of recent road construction and maintenance costs.

The yawning gap between revenue raised from road user charges for heavy vehicles and revenue spent on roads is estimated to reach $1.44 billion in 2023-24.

Opposition transport spokesman Bridget McKenzie said the tax was sure to drive up cost of living pressures for families and businesses and could shutter smaller operators already struggling with the elevated cost of fuel.

“Everything we make in this country and every good we buy gets to a shop by travelling on a truck, whether it originates on a farm, from a factory, or enters the country via a port,” she said.

The Australian Livestock and Rural Transporters Association has proposed a more modest increase to the RUC of 9 per cent over three years.