Friday, October 31, 2014

Road Haulage Operators Down Under Move Freight More Cheaply with Discounted Fuel Levy

Tax Credits for Australian Hauliers Increase the Disparity in Costs with their UK Cousins
Shipping News Feature

AUSTRALIA – UK – The introduction of legislation into the Australian Parliament will mean, assuming it is passed into law, that road haulage operators in the country will be shielded from the forthcoming fuel tax hike due to come into force on 10 November 2014. The Australian Trucking Association (ATA) reports that the tax on fuel will increase 0.457 cents per litre from 38.143 cents per litre to 38.6 cents per litre. It will then increase every February and August in line with inflation.

The new ruling will mean an increase in the industry’s existing fuel tax credits by the same amount, from 12.003 cents per litre to 12.46 cents per litre, and enable them to increase in February and August as well. The Government is implementing the fuel tax increase through what are called tariff proposals, which are a long-established mechanism for altering customs and excise rates. The tariff proposals will need to be validated by Parliament within twelve months.

The Senate Economics Legislation Committee will hold an inquiry into the provisions of the Government legislation and the ATA will be making a submission in due course. ATA Chief Executive Stuart St Clair said the legislation would need to get through Parliament before it rises for the year on 4 December.

“Monthly BAS payers will need to lodge their November fuel tax credit claims in late December, and quarterly payers will need to lodge their claims for the December quarter in early 2015. The legislation is needed to make sure operators can lodge their claims at the increased fuel tax credit rate.”

UK hauliers will look on in envy, although the combined campaign from FairFuel UK backed by such organisations as the Freight Transport Association (FTA) and the Road Haulage Association (RHA) led to the cancellation of the 1.89 pence per litre fuel duty increase that was planned for September 2104 and duty rates will remain unchanged until at least 31 August 2015 (conveniently post-election) British drivers are still comparatively hard done by.

In October the average price of diesel fuel across Australia to the everyday motorist was A$1.52 per litre (83.6 pence per litre), compare this to the £1.31 per litre in the UK, with much of the difference explained by the 57.95 pence per litre duty charged in Britain against the 21.23 pence per litre ‘Down Under’. These figures include VAT in the UK at 20% and GST at 10% in Australia, all of which is reclaimable by registered transport companies.

It is against this backdrop that haulage of freight is recognised as essential and the Australian government grants operators the discount tax credits which help to keep prices down.