The Senate has disallowed the planned increase in the effective fuel tax paid by trucking companies.
The increase would have taken effect from 1 January 2009, and would have seen the industry’s fuel tax go up from 19.633 cents per litre to 21 cents per litre.
The Australian, state and territory transport ministers agreed on 29 February to increase the tax, as part of this year’s heavy vehicle charges determination.
The other part of the heavy vehicle charges determination is an increase in registration charges for about 75 per cent of heavy vehicles and all trailers.
Registration charges will fall for the remaining 25 per cent of vehicles, including the charges for three, four and five axle rigid trucks.
Trucks registered in the states and the Northern Territory will be subject to the new registration charges from 1 July 2008.
The Senate has previously rejected the new registration charges for trucks registered under FIRS or in the ACT.
The registration charges for these trucks will instead go up by 2.3 per cent on 1 July 2008, because of a routine inflation adjustment. The full details of the inflation adjustment are in the 9 May edition of the Friday Facts.
What the Senate voted on and what it means for the industry
- Trucking companies pay an effective fuel tax rate of 19.633 cents per litre, after receiving a government rebate. This fuel tax is called the road user charge.
- The road user charge is set by a ministerial determination under the Fuel Tax Act, and can be changed through what is called a legislative instrument instead of an Act of Parliament.
- The Governor-General, ministers and senior public servants issue thousands of legislative instruments each year. It would be impossible for Parliament to debate all of them, so they are scrutinised by exception. The instruments are tabled in both Houses of Parliament; any Senator or Member of Parliament can move a disallowance motion to have a specific instrument overturned.
- The new road user charge determination was presented to Parliament in March. It would have increased the road user charge from 19.633 cents per litre to 21 cents per litre, an increase of 1.367 cents per litre, from 1 January 2009.
- There was a Senate motion to disallow the determination. The vote on the motion occurred this week and the determination was disallowed.
- As a result, the increase in the road user charge will not go ahead.
- The Government can try again, but it must either wait six months or arrange for the Senate to rescind the disallowance motion.
- The Government will only carry out its $70 million Heavy Vehicle Safety and Productivity Plan if the increase in the road user charge goes through.
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