A leading environmental group is demanding the Federal Government scrap the fuel tax credits scheme because it is not essential
A leading environmental group is demanding the Federal Government scrap the fuel tax credits scheme because it is not essential for the trucking industry to remain viable.
In a speech to the National Press Club today, Executive Director of the Australian Conservation Foundation (ACF) Don Henry referred to the scrapping of the scheme – which currently allows the industry to claim an 18.51 cents per litre credit – as one of three initiatives the Rudd Government needs to implement to put Australia on a path toward a greener future.
According to Henry, the fuel tax is unjustified because it is merely propping up the already highly-profitable trucking industry.
“Does anybody think the trucking industry will shut down if it has to pay full price for its fuel?” he asked attendees.
He accused the industry of running a fallacious argument that the scheme is warranted to benefit struggling farmers.
“Agriculture, forestry and fishing together now account for 15 percent of the fuel tax credits by total value. Well over half goes to benefit mining and transport companies,” he says.
Furthermore, Henry labelled the scheme unfair, arguing it discriminates against commuters by subsidising billion-dollar industries that do not need tax breaks.
“Let’s not beat around the bush about what the fuel tax credits scheme really means,” he says.
He called on the Government to adopt reforms to move “away from using taxpayers’ dollars to promote activities that are destroying the planet”.
Doing so, says Henry, will deliver substantial savings to the Government as it looks to cut down on spending in the impending federal Budget.
Based on figures from the Australian Taxation Office, Henry says the scheme cost taxpayers $4.9 billion in the 2006-07 financial year, a 38 percent increase on the previous year.
“The scheme is costing each and every Australian $230 per year, on average, or costing each household $606 per year,” he says.
The Australian Trucking Association (ATA) has slammed Henry’s claims, referring to them as a plan to make people pay more for groceries.
“In total, the ACF’s plan would increase a typical urban family’s grocery bills by about $86 per year and a typical rural family’s grocery bills by about $103 per year,” ATA Chief Executive Stuart St Clair says.
St Clair argues abolishing the scheme will have a two-fold effect, in that it will not only push up the price of goods, but also squeeze already tight profit margins.
“We estimate that eliminating fuel tax credits would increase the costs of a typical trucking operator by 22 percent,” he says.
St Clair has questioned the logic of Henry’s claim that the industry can do without the fuel tax credit scheme, saying most companies would not be able to absorb cost of having to pay more for fuel.
“The trucking industry is intensely competitive, and they [sic] would have to pass on the extra costs to stay in business,” he says.
Rather than calling for an end to the scheme, St Clair says Henry needs to pressure governments to allow B-triples to operate in capital cities.
“They are safer and more productive than conventional semi-trailers and using them would enable operators to save millions of litres of diesel a year,” he says.
However, Henry is urging governments to direct their focus elsewhere, saying Treasurer Wayne Swan must pay more attention to environmental sustainability when formulating the Budget.
According to Henry, the issue does not receive the attention it deserves.
Along with scrapping the fuel tax credit scheme, Henry wants the fringe benefits tax concession for company cars and the tax breaks on aviation fuel, which sees airline companies pay only three cents in tax per litre of aviation fuel, abolished.
The calls to scrap tax breaks form part of the ACF’s pre-Budget submission.
“Let’s cut the perks for polluting and invest in a cleaner future today,” Henry says.
The ACF wants the savings that stem from scrapping the tax schemes to be invested in energy efficient measures, better public transport initiatives and cleaner cars.
During his speech, Henry also called for the newly-established Infrastructure Australia to be bound by environmental sustainability criteria and for it to place greater emphasis on public transport.
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