Cutting the fuel subsidy will cost Qld millions

By: Graham Gardiner


Greyhound Australia has spent the past 48 hours crunching the numbers on the scraping of the 8.3 cents a litre

Greyhound Australia has spent the past 48 hours crunching the numbers on the scraping of the 8.3 cents a litre fuel subsidy and believes it will cost the state dearly in the long run.

Chief Executive Robert Thomas says the decision will cost Greyhound alone $700,000 a year and that it is passengers and the tourism industry who will have to pay for it.

"We were in the process of abolishing our fuel surcharge but now we have to reassess that," he says.

"National transport players like Greyhound fill up a large percentage of our vehicles in Queensland due to its lower costs, now the ‘sunshine state’ has lost that competitive advantage.

"When you spend tens of millions of dollars each year on petrol, 8.3 cents a litre makes an enormous difference.

"As a national company based in Queensland, 60 percent of our fuel usage is for our home market and much of our business development spend is focused on developing tourism in regional Queensland."

Thomas also dismisses claims that the scrapping of the subsidy will save $2.4 billion over four years from the State’s bottom line.

"The majority of urban bus operators and many regional and rural operators benefit from cost-plus contracts with Queensland Transport (taxpayers pay well into the millions for this). Any increase in costs (in this case fuel) will automatically trigger a rise in costs and therefore a rise in subsidies from Queensland Transport," he notes.

"I am sure it would be of interest to many parties to review the modelling of this decision to assess the net position after increased subsidies and the impact on tourism have been accounted for.

"As a national transport company based in Brisbane, I implore the Government to reverse this decision."

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