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Wednesday, 19 March 2008
Page: 2211


Mr SECKER (9:56 AM) —Transport is very much an important part of any rural electorate. It is also very important for the cities, because of the transporting of goods all across this country. In my electorate of Barker, we have some very large transport firms—for example, K&S Corporation and MacKenzie Freight Lines at Mount Gambier. Interestingly enough, both of them are about halfway between Adelaide and Melbourne. The transport industry is what really makes Australia tick. Without an efficient transport industry, we would not be able to get goods from A to B. We would not be able to get goods from the farms or the factories to the manufacturers and then to the wholesalers and retailers. It really is an important part of the Australian economy.

Reflecting that the new government’s main mantra is reducing inflation, we have seen stunts and suggestions they are going to reduce their expenditure on airfares by $15 million and take away $100 million in drought relief. Things like the rural apprentices program and the FarmBis program are all being cut. Unfortunately, most of these programs have been cut in rural areas, which, as a representative of a rural area, I find very concerning. In the scheme of things, they really do not cost all that much. The government will probably have a budget of something like $260 billion this year, so a few million here or there out of $260 billion is not all that much.

The government suggest that they are going to bring in a budget with a surplus of at least 1.5 per cent of GDP, which is not all that amazing, really, when you consider that the budget surplus last year was 1.6 per cent and the year before was 1.5 per cent. So to reach their goal of a surplus of 1.5 per cent of GDP is really not all that extraordinary. This is all aiming to fix up the bogeyman of inflation. I do not have a problem with any government trying to ensure that we do not allow inflation to get out of control, but what we have here is legislation under which fuel prices and registration costs for transport will actually go up, increasing Australia’s inflation rate. The Interstate Road Transport Charge Amendment Bill 2008 and related legislation will have a greater inflationary effect than any other bills brought before this parliament by the new government. It has been suggested to me that milk will ‘only’ go up 17c a litre. I think 17c a litre is just indicative of all the other food and grocery prices that will go up as a result of this legislation.

For example, B-doubles with three axles will incur nearly $6,000 in extra registration costs. A firm like Scott’s Transport in Mount Gambier would have at least 600 trucks. Six hundred trucks at $6,000 per truck is more than $3½ million each year. Those costs have to be passed on to the people who need to transport goods from the farms to the factories and from the factories to the retailers and wholesalers all around Australia. It will be a government induced inflationary cost. It will be a direct cost to the CPI and, as a result, it will have a pretty serious effect on inflation in this country. It is amazing that this government has not done some modelling to work out the extra costs on inflation caused by not only the CPI increases in fuel excise on trucks but also by this proposed act and the road user charges. It will be much higher than CPI because they will be using a different indicator. This bill increases the registration charges for heavy vehicles registered under the Federal Interstate Registration Scheme, or FIRS. These are heavy vehicles which transport goods interstate. Another problem with this is that it will deter transport operators from moving up to the B-doubles and road trains because the semis and the single- or double-axle trucks, the ordinary heavy lorries—for want of a better term—will not have those increased charges. So there will be disincentive to go to the more efficient B-doubles and road trains.

Transport is a major industry in my electorate of Barker, and the road network is a challenge across the whole region. The city of Mount Gambier, in my electorate, is situated midway between Melbourne and Adelaide and is the centre for a large transport industry—in fact, it is a transport hub. It is the transport hub for Scott’s Transport, K&S Freighters, South West Freight—SWF—and other trucking companies. All of Mount Gambier’s industries rely heavily on incoming or outgoing freight services, not only for what would be termed ‘traditional agricultural production’ but also for the very large forestry industry, which relies heavily on the transport industry. There is no capacity to move over to rail because railway lines cannot be moved very easily to different areas, so the truck industry will always be needed to service that industry. Transport is very much an expanding industry elsewhere in Barker. There is lots of heavy transport because of the wine grape industry, the timber industry, the wine tourism industry and the fish industry. Several hundred kilometres of coastline act as a boundary to my electorate, and there is a very large rock lobster and fishing industry. Whilst the Howard government investment in AusLink and Roads to Recovery improved the conditions of major roads of the electorate, a few years ago a road study of the south-east of South Australia reported a real need for future planning for roads in that area. The issue is not only the major interstate routes, as heavy vehicles need roads to the blue gum plantations—which are about to come on line and are all over the place—and providing a temporary road network, and one that is capable of carrying heavy vehicles, will always be a challenge.

Tourism is also a major industry in the electorate so another challenge is the integration of heavy transport and tourism, with the need to share the road network and to make it safe. That goes to the need to build bypasses such as we have in Millicent, which the Howard government provided funding for; the Worrolong Road bypass in Mount Gambier; and the proposed Penola bypass, which will pass right through the greatest industry in the country—the wine industry—and one of the greatest wine areas, the Coonawarra. It is very important that we do not have transport traffic interfering with the tourism industry because of safety problems. Anyone who has been through the Coonawarra will know that the existing trucks and the tourists can sometimes be a dangerous mixture.


Mr Martin Ferguson —And is the mill is going to be built?


Mr SECKER —The member for Batman raises an interesting question about the mill being built. This is a Labor state government project and I support it being built, but we would have to wonder sometimes at the delays that have been happening as to whether it will occur.


Mr Martin Ferguson —Or the commitment of the proponent.


Mr SECKER —That may be so.


The DEPUTY SPEAKER (Hon. BC Scott)—The minister will cease interjecting.


Mr SECKER —The minister may be right but, in the end, I will not be deciding that, nor will the federal government be deciding that. Members of both sides would support that happening but whether or not it does will not be up to this government or this opposition; it will be up to the proponents and whether they come up with the money. So I certainly will not be blaming the federal government if it does fail.

Heavy transport, in particular, is an industry which has successfully reversed many of the negative perceptions the public had about it. It is certainly a much better and safer industry than it was perhaps 10 years ago. People often associated the industry with road deaths, long hours and drugs, but fortunately that image has changed. There has been over the past five years a decrease of about 22 per cent in fatal crashes for articulated trucks. While one death is always one too many, there has been a great rate of improvement in conjunction with high productivity in the industry, and we should always welcome that. If we had the same sort of reduction in road deaths in ordinary cars in Australia, I think we would all be very thankful for that. Heavy vehicles already pay registration charges, which vary by truck type and axle loads, and a diesel fuel excise.

Australia’s national freight load is expected to double by 2015. That is a very large increase. The road transport share of that compared with rail’s share is expected to increase. It follows then that it is important to keep the trucking sector cost efficient to support Australian industry’s international competitiveness. The Howard government went a long way to keeping the transport industry efficient and competitive by maintaining and extending the on-road diesel grant and keeping the indirect tax burden low on trucking. Under the Labor government, this is not so any more. The decision by state and federal transport ministers to increase truck charges is short-sighted and counterproductive. It does not make sense in the face of growing freight volumes. The Labor government will be solely responsible for the inevitable serious damage to Australia’s exports and the economy as a result of these ill-considered increased charges.

Trucking operators currently manage the freight task on very limited profit margins and are not in a position to absorb additional costs. This bill will put pressure on freight rates, which will now rise. When I was doing my economics degree, the transport industry was often cited as a near perfect industry in its pricing structures because of the competitiveness in the industry. Customers will feel the impact of increased freight charges and, accordingly, consumers will feel the impact through increased costs of consumables such as food products, white goods and building materials—everything that Australians use daily. Supermarkets will raise their prices and this will further contribute to inflation.

The reduction in charges for smaller trucks will mean that the general public will now have to share the road with one-third more trucks than is necessary. We have a state Labor government in South Australia which turns a blind eye to road infrastructure in rural and regional areas. The addition of more trucks will have an impact on the overall safety of road use in the future and will significantly increase carbon emissions. Again, this goes against the grain of what this government professes to be trying to reduce: carbon emissions and inflation. So these measures are counterproductive with regard to these two so-called goals of this new government.

The increased revenue will not be returned to road upgrades where it is collected and will simply disappear into the black hole of consolidated revenue, where it will be eventually lost through Labor’s economic mismanagement at a state government level. There is no hypothecation, there is no guarantee and there is no instruction to the state governments that they must spend that income on roads. Why can’t the federal government insist on state governments spending that increased income from these taxes and registration fees on roads where it is sorely needed? State and federal Labor ministers have ignored the views of the trucking industry and the impact of higher charges.

The Howard government’s introduction of the GST and removal of sales tax had a significant impact on reducing the indirect tax burden on the trucking industry. We all know that batteries and tyres became cheaper as a result of that tax system, and many other areas of the transport industry also became cheaper. Even when there were costs, they became an input tax credit. It was actually very good for the transport industry, given the lack of increases over recent years in transport industry charges. The only real increases have been due to world oil prices, which have increased the price of diesel.

It is very important that we have proper planning for our road needs. Developments like the Alice Springs to Darwin railway line, particularly the development from Alice Springs to Darwin—some 90 years late many South Australians would believe, but it came eventually; again, an initiative of the Howard government—took some pressure off roads, but road transport is a growing need. This bill makes no attempt to fairly attribute road costs. In addition to freight services, road networks provide local access as well as significant services for passenger transport.

In a true user-pays system, road costs could reasonably be attributed to home and business owners. Some costs of road infrastructure also can be attributed to passenger vehicles and, I agree, to some trucks, and some costs inevitably are common to all users. What does not make economic sense is to attribute the need for road capital spending only to heavy vehicles, when there is no viable alternative means of transport. Heavy vehicles already pay their share of road spending through registration fees and a net fuel charge. The trucking industry believe in paying their fair share and do not shrink from the principle that the vehicles should pay their fair share of road construction costs as well as for the damage that they do to the road network. But the industry should not be loaded with more than its fair share. The increase in the road user charge does not ensure parity of road use with fair charges and will have a major impact on a vehicle’s operating costs. Registration charge increases, coupled with an increase in the road user charge, will impose heavy costs on the trucking industry, and these costs will have to be passed on to Australia’s dispersed communities and trade competing industries.

In January of this year, independently verified analysis undertaken by the Australian Trucking Association showed that heavy vehicles are currently overcharged by $130 million a year for road infrastructure spending and not undercharged as Labor has put forward. There is more to road usage than simple axle size and weight. The significant increases in registration charges for highly productive multi-combination vehicles, such as B-doubles and B-triples, do not make sense when compared with their record of delivering greatly enhanced safety and environmental performance. The registration charge increases carry the very real prospect that industry productivity, safety and environmental performance will stall as trucking operators revert back to greater utilisation of the semitrailer configuration and slow the uptake of B-triples.

It will be an unfortunate situation if the first significant road transport deliverable on COAG’s national reform agenda detracted from the productivity of the trucking industry. This will increase inflationary pressure in the community and reduce the competitiveness of Australia’s trade-competing industries. These changes might be more palatable if they were delivered in conjunction with a commitment to expand and improve routes such as Melbourne to Adelaide via the Dukes Highway, in my electorate, or Adelaide to Sydney via the Sturt Highway, also in my electorate. There is no such commitment other than that which was given by the Howard government; therefore, there will be no gains in productivity. The simple outcome is that the cost to consumers will be greater. It will certainly put up the price of groceries, as well as everything else that households buy. Truckies will struggle to maintain their businesses, and struggling farmers and low-income families in my electorate will be hit as increases flow through to them. (Time expired)