Groceries safe from fuel tax indexation

The reintroduction of fuel tax indexation won't drive up the prices of groceries, says the Australian Trucking Association

Following the unveiling of the Federal Budget on Tuesday, May 13, the Australian Trucking Association has issued a statement reminding the general public and trucking operators that the Government’s reintroduction of fuel tax indexation won’t affect grocery prices.

Unchanged since it was set at 38.143 cents per litre by the Howard government in 2001, the fuel tax rate will now rise twice a year in line with inflation, starting from August 1, 2014.

The ATA’s Chief Executive, Stuart St Clair, said the existing fuel tax credits system would ensure trucking operators wouldn’t be adversely affected by an increase in the fuel tax rate.

“Under the fuel tax credits system, businesses can claim fuel tax credits for each litre of fuel they buy for use in trucks that meet one of four environmental criteria,” he said.

“Businesses can claim for the full amount of tax they paid on the fuel when they bought it, minus the road user charge, currently 26.14 cents per litre. As a result, the twice-yearly indexation of the fuel tax rate will result in matching increases in the fuel tax credits operators can claim.”

Mr St Clair said that while the trucking industry would still be overcharged by $232 million in 2014-15, the ATA was thankful that the Government left the current fuel tax credits system unchanged.

“The ATA pressed the Government to keep the fuel tax credits system as it is, despite suggestions that it could take a haircut,” he said.

“The Government’s decision is a win for the trucking industry. The fuel tax credits system helps reduce the cost of transporting freight and keeps our exporters competitive.”

Mr St Clair also thanked the Government for its recently unveiled infrastructure investment package.

“Australia’s road freight will almost double by 2030,” he said.

“The Government’s investment will make the roads safer and deliver improved productivity,” he said.

Groceries safe from fuel tax indexation

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