Posted by Rita Mu
The Australian Trucking Association (ATA) is calling for the Federal Government to permanently exempt the trucking industry from the carbon tax.
Under the government’s proposed carbon tax, which is set to come into effect on 1 July 2012, the trucking industry will be exempt from paying a price on carbon for two years.
But chief executive of the ATA, Stuart St Clair, said industry should not have to pay a price on carbon at all.
“The ATA’s submission argues the industry should be permanently exempt, because 85 per cent of trucking businesses are small businesses with fewer than five employees,” St Clair said. “They are entirely comparable to other small businesses that are exempt from the carbon tax, except they happen to operate trucks weighing more than 4.5 tonnes.
“The trucking industry has already spent millions on improving its environmental outcomes. For example, particulate emissions from Euro five engines - mandated from 1 January 2011 for all new trucks - are 92 per cent lower than the particulate emissions from new model trucks built in 1995.
“Importantly, the draft carbon tax bills already include this permanent exemption for trucking operators. The government says it will introduce another bill at a later date to extend the tax to the industry from 2014. In our view, the government should stick to the wording of its existing bills and keep the exemption in place,” he said.
Under the government’s draft carbon tax bills, business fuel users will pay the carbon tax through adjustments to the fuel tax credits they claim on their business activity statements. The fuel tax credit rate will be adjusted twice a year on 1 January and 1 July, and businesses would get three weeks notice of the new rate.
In a recent submission, responding to the government’s draft carbon tax bills, the ATA indicated that three weeks notice was not long enough for many trucking operators to change their freight rates or fuel charges.
“Some trucking industry contracts explicitly prevent price changes during December and January. Many businesses in other industries would face the same problem as well,” St Clair said.
“The submission recommends the government should adjust the carbon tax on business fuel once a year, on 1 July. Businesses already expect tax changes to occur on 1 July, and many contracts are renegotiated in the lead up to this date.
“The carbon regulator should be required to give three months – or preferably six months – notice of the change to the fuel tax credit rate, so businesses have time to pass on the change in their costs.
“The fuel tax credit rate for trucking operators is also reduced by the road user charge, which is set each year by the Minister for Infrastructure and Transport. To avoid confusion and the need for trucking businesses to go back to their customers twice, the Fuel Tax Act should be amended so the two adjustments are confirmed and take effect at the same time.”
St Clair said the government should provide assistance to industry associations to develop standard contracts and invoices that reflect the introduction of the new tax.
“The government has announced a $40 million program of Information Assistance Grants to enable industry associations and non-government organisations to tell their members about practical ways they can reduce their energy costs,” he said.
“The guidelines for these grants should be expanded to enable associations like the ATA and its members to develop new standard contracts and invoices.
“For example, if trucking businesses become subject to carbon pricing, the industry would need to develop a standard invoice that shows customers how much of their bill is due to the carbon tax,” he said.
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