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Savings for road transport industry



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265/91 25 November 1991

SAVINGS FOR ROAD TRANSPORT INDUSTRY

The Coalition's "Fightback" tax reform package will produce big savings for road transport operation throughout Australia.

Truck operators will benefit from:

* Abolition of Wholesale Sales Tax on prime movers,

trailers, tyres, spares and other equipment.

* Abolition of payroll tax which currently impacts on firms employing as few as ten people on average earnings (see table 5.9 attached)

* Abolition of federal excise on diesel and petrol.

* Full rebate of Goods and Services Tax on all business inputs, including capital costs such as the purchase of a new rig and all running costs.

* Abolition of customs duties on imported equipment.

* Abolition of the compulsory training levy.

It is estimated that the benefit to the road transport industry of the abolition of wholesale sales tax and the fall rebate of GST amounts to $1 billion. Savings of this order will have a dramatic impact on the industry’s cost structure

and result in significantly lower charges to the users of road transport, particularly in rural, export based industries.

More than 70% of domestic freight is carried by road. Any savings in transport costs flow through to all sectors of the economy.

For instance, it is estimated that about 18% of the final product price of food represents transport costs.

Abolition of wholesale sales tax and the full rebate of GST will provide dramatic reductions in the cost of trucks. For example, an inter-state prime mover currently worth $200,000 will be $40,000 cheaper with the removal of wholesale sales

tax at 20 per cent and the full rebate of GST.

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Abolition of payroll tax will also significantly reduce the costs of fleet operators. For example, a transport firm employing 50 drivers and depot staff, with an annual wages bill of $1,5 million would save'$52,500 in, for instance, Queensland, enough to employ another 2 staff.

Abolition of fuel excise will also greatly reduce running costs. With full rebate of GST, the saving for business on the cost of petrol and diesel is 25.8 cents per litre. For a Kenworth truck with a fuel capacity of 1420 litres, this is a

saving of $366.66 every time the tank is filled.

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Issued at FH Group, Roeklea, Brisbane.

For further information contact (06) 277 4022.

COST COMPONENT (%)

Capital (annual lease) Prime Mover Trailer

Stamp Duty

Fuel

Tyres Prime Mover Trailer

Wages

Repairs and Wages

Administration

TOTAL

OPERATING COST ($)

Coalition Labor

24,382 8,883

33,400 11,244

400 400

18,263 42,471

4,366 7,702

5,260 9,280

37,790 39,364

20,520 22,800

5,701 6,335

128,007 170,554

42,547 SAVINGS