Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

This morning, when I was going through the morning papers, I saw with a gasp an article in the Age headed 'Treasurer urged to reduce fuel tax credits'. At face value, most Australians wouldn't know what that meant, but, if you're a transport operator in my electorate of Wright, or anywhere in Australia, an article like that will put shivers through your business. These types of articles keep operators awake at night. It read:

Treasurer Jim Chalmers has been urged to overhaul the fuel tax credit scheme to save the federal budget $4 billion a year …

I went and pulled the report that this came from. It was the Grattan Institute's Fuelling budget repair: how to reform fuel taxes for business. After reading the report, can I say that the fundamental assumptions that were made in it are incorrect and flawed. I urge the Treasurer to have his Treasury officials to look very carefully at the assumptions in this document.

Let me first explain what the fuel tax credits for the heavy vehicle sector are. Anything over 4½ tonnes is able to claim back a credit of around 20c per litre. This was introduced by the Howard government. John Anderson was the Deputy Prime Minister. In 1999 John Anderson said that fuel tax credits were intended to reduce transport costs, particularly for 'those people living in regional, rural and remote areas, where transport costs are a significant part of the cost of living and doing business'. Basically what he was saying was that, if you live in a regional area, outside a metropolitan area, the goods that you purchase have a higher transport component to their costs. This tax credit was given to make them cheaper, or provide a more level playing field for people in our regional and remote areas.

As the report says, in 2004 the then minister for industry, Ian Macfarlane, said fuel tax credits were 'money in the pocket for thousands of rural businesses and consumers'. But the report then goes on to say:

… more than 60 per cent of businesses in the top-five industries that receive the vast majority of credits are in major cities, where two-thirds of their employees are also based.

Well, if you're a transport operator in the great state of Queensland, say, and you're running into regional and remote areas out of the distribution hubs for Woolworths, Coles, our major retailers, that's where the distribution hubs are. That's where you employ the people. So they start their day there, and they run to the likes of Emerald, Mount Isa and Boulia, and they return back to Brisbane. That's where the administration centre is. That's where the tax returns are lodged. So all the benefits are received in the regional areas. But this report is claiming that the benefit is only received by those in the cities. It is fundamentally flawed.

I'm not suggesting that the government is going to pursue this, but it's in the press. The best thing that the Treasurer could do is to come out and say that they are not considering getting rid of the tax credits that give a level playing field to our regional and remote areas. If this were to go ahead, it would be a kick in the guts to the regional and remote families of Australia. If it were to go ahead, not only would it be a kick in the guts for the families but it would be a kick in the guts for the very sensitive parts of the transport industry that are already dealing with increased cost-of-living pressures.

I want to finish by saying that the Australian Transport Association has predicted that the trucking industry would be decimated if the Grattan Institute proposal were to succeed. In a news article, David Smith said:

There is no way that any transport business could survive this. Diesel is our biggest cost. We are already fighting ridiculous fuel prices; this would be the straw that breaks the camel's back.

There are some statistics at the end of the article. The Australian Transport Association research shows that only 34 per cent of trucking businesses can actually pass on increased fuel costs, including the reductions in fuel tax credits. This is a bad tax. It's bad for regional Australia, it's bad for the industry and it's bad for our country. It should not be adopted.

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