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Wednesday, 19 March 2008
Page: 1332


Senator BOSWELL (5:55 PM) —The Senate is debating the Interstate Road Transport Charge Amendment Bill 2008 and the Road Transport Charges (Australian Capital Territory) Repeal Bill 2008. As Senator Macdonald has said, these bills are very important for people who live outside the metropolitan areas.

On 29 February 2008, Commonwealth, state and territory transport ministers, who are all Labor, agreed at the Australian Transport Council to a revised set of charges that will apply to Commonwealth registered heavy vehicles. These charges will be used as reference fees by the states and territories on their own heavy vehicles. These bills concern the application of charges agreed to by the Australian Transport Council to heavy vehicles registered under the Commonwealth and the subsequent take-up of those charges to vehicles registered under the states and territories. This debate, in other words, is about what costs are imposed upon Australia’s road freight industry. The costs have a direct effect not only on the many small business truck operators and their productivity but also on the final price paid by consumers for the goods being transported, particularly food. In addition, there are environmental concerns. It is important to get the policy settings right to provide incentives for lower emission vehicles.

The two key elements of the charge structure that apply to the road freight sector are registration fees and the diesel fuel excise system, known as the road user charge. The real impact of these bills will be felt in regulations that are to be tabled in parliament after the passage of the bills. The regulations will schedule the details of the heavy vehicle registration charges. These charges will contain significant increases to be implemented over three years from July 2008. The key feature is the way in which the government will determine these charges by applying an annual road cost adjustment formula. This formula will be particularly expensive for Australia’s road freight industry due to the rising costs of materials associated with road construction and maintenance. This means that registration costs are going to go up at a higher rate than the CPI.

Close to 70 per cent of Australia’s truckies and all those at the heavier end of the industry are going to be paying more tax. This means that there will be a rise in costs associated with road expenditure that will eventually flow through to consumers. Productivity is affected because the costs agreed to by the Australian Transport Council of all the Labor ministers fall heavily on the highly productive multicombination vehicles such as B-double and B-triple trailers. For example, the registration charges for B-doubles will increase from $8,041 to $14,340, including a multicombination prime mover charge of $7,050. B-triple charges will skyrocket to $20,340, including the multicombination prime mover charge of $7,050.

The government is imposing very substantial increases in charges on the most efficient sector of the road freight industry. The government’s fee structure will reduce the incentive for operators to use high-productivity vehicles. Operators will be inclined to stick with semitrailers instead—so much for the government’s concern about greenhouse gases and climate change. While it plans to make working families pay through the nose for plastic grocery bags, it has agreed to a charge arrangement that will actually encourage more greenhouse gas emitting vehicles onto our roads.

At its February meeting, the Australian Transport Council decided to increase the road user charge—or diesel excise—from 19.633 cents per litre to 21 cents per litre. This occurs by reducing the amount of rebate going to on-road diesel users. Most importantly, this fuel excise increase will be indexed. This is the first time it has ever been indexed since 2001, and it will be indexed using the same formula that is used for the heavy vehicle registration charges. This regulation, made under the Fuel Tax Act 2006, was tabled by Labor on 13 March, before this legislation had been brought into the parliament. It will take effect from 1 January 2009.

The coalition will be moving to disallow this instrument. Why? Because this instrument brings back fuel excise indexation. One of the great achievements of the coalition government was to put a stop to the rise and rise of fuel excise and fuel prices because of the impact on working families and inflation. Well, senators on the Labor side, you can walk the walk and you can talk the talk, but you have nowhere to hide on this one. This is against every principle that Prime Minister Rudd went to the election on: working families, the environment—the lot. Yet Labor is bringing back taxation indexation on fuel. Paul Keating has re-entered the parliament! The indexation of fuel excise was introduced by the Keating government, and the Rudd government is bringing it back for the road transport industry—only the Rudd version uses a formula that will lock in a greater tax take than under the old CPI method. Rudd is Keating on steroids! Seventy-five per cent of Australia’s domestic freight is moved by trucks on our roads. The Rudd Labor government has just raised those transport charges.

Many of the country’s 365,000 trucks are operated by small business. They will be the first to suffer by being slammed with the increased charges. It is a difficult life being an owner-operator in the freight transport business. The hours are extremely long, the debt is extremely high and the competition for the contracts is fierce. An extra squeeze on profit margins is totally against the interests of the small transport operators. The small operators will find it more difficult than the larger operators who move groceries to pass on the increased costs. The extra costs will ultimately be passed on to the consumer in the form of higher prices for everyday items that people need to buy to survive: food, groceries, medicine, clothes, building materials, water tanks and all kinds of products. Here we have a government that on one hand says they are doing something about rising grocery prices and on the other hand slugs a new tax that raises the transport costs of getting the groceries to the market and to the consumer.

Labor state and territory governments’ revenue will rise substantially as a result of the increased fuel tax and registration charges, with the annual revenue stream to Labor governments growing by $168 million. The fuel tax take to Labor states and territories will rise from $1.146 billion in 2007-08 to $1.226 billion in 2010-11—an increase of $80 million. The increase in heavy vehicle registration charges will push up the tax take for Labor state and territory governments from $638 million to $727 million in the same period—an increase of $88 million. But that is okay: more money for the state Labor governments to use on giving their former premiers cushy overseas jobs at $200,000 or $300,000 a year. The fundamental flaw in the Rudd government’s road user charge scheme is that the money collected from the registration or the fuel excise does not have to be spent on better roads, road maintenance or transport infrastructure for heavy trucks. There is no guarantee at all that any of this money will actually be spent on roads. They can spend it anywhere they like—even on sending a former Premier on a $200,000 or $300,000 excursion to America.

I remind the Senate that, contrary to the myths recently put out by Labor, the coalition’s funding commitments for land transport were at a record high some years before the last election. In fact, not only did we build new and more roads; we had to pay for the ones Labor built before us and put back on the national bank card. It now looks likely that the Labor government will halve the coalition’s AusLink commitments of $31 billion between now and 2013. Labor could end up spending $15 billion less than what the coalition promised. That is a huge hole in the road. It means that there will be projects right around Australia at risk from Labor’s razor gang. We already know that there will be $500 million slashed from the Bruce Highway funding for work between Cooroy and Curra. Labor has made no commitment on continuing Roads to Recovery and the $350 million funding that has been so essential for local governments to keep their roads up to date. Labor has also made no commitment as to the $300 million we had committed to spend on the development of roads around regional Australia.

We are a big country. We cover a huge geographical area. We have responsibilities to those Australians working hard, thousands of miles from here, to see that they can live a decent life with access to basic goods at a fair and reasonable price. Roads are our lifeblood, whether they are bringing exports to ports or consumer goods to the independent grocery store at Cloncurry. We rely on an efficient road transport system. The change in government is certainly going to change this country. Bit by bit, day by day, tax by tax, the Rudd government is unravelling what makes Australia tick.