The Government's proposed fuel tax cut could end up costing Australians more, not less, in the long run, according to experts.

The trucking industry has warned that the abolition of the fuel tax credit could add an extra $20 to grocery bills, as businesses pass on the cost of higher fuel prices.

Australian Trucking Association chairman David Smith said that the group has already sent a letter to Prime Minister Scott Morrison, warning him of the possible implications of the tax cuts — which were supposed to aid people with the rising cost of living — making struggling Australians far-off worse.

He said: “The food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax credit.”

“They can only do this through increased rates or a new fuel tax credit levy or other mechanisms."

“Unless this is resolved, it is estimated that this will add $20 per week to the average household’s food bill. This will negate the cost of living relief which the Government sought to provide.”

Australian Trucking Association chairman David Smith said that the short-term relief from the cut on fuel excise tax could cost Australians more on groceries and electric bills in the long run. Credit: iStock.​

The Morrison Government's decision to reduce the fuel excise by 22 cents per litre in order to ease the burden on Australians at the petrol pump in late March is a welcome relief for many.

However, the move has come at a cost to truck drivers, who are now only seeing a 4.3 cent per litre reduction in diesel bills.

It should be noted that prior to the tax cut, fuel excise was 4.2c per litre, but truckies and logistics companies scored a 17.8c per litre fuel tax credit, which included a refund of the excise, minus the Government’s 26.4c per litre road-user charge.

This is an unsustainable situation for the trucking industry, which is already struggling to cope with rising fuel costs.

Mr Smith said that the move will have "unintended consequences", emphasising that about 53,000 trucking businesses are now in limbo due to the increased fuel prices.

Additionally, the Coalition highlighted that while households could save $700 on fuel prices on average, the savings could be negated if groceries were to rise by $20.

It should be noted, however, that the fuel tax change is not the only factor affecting the prices of groceries.

The cost of fertiliser has skyrocketed in recent months, due to the war in Ukraine and the rising cost of natural gas. This has put a strain on grain farmers, who are already struggling with higher diesel and labour costs.

Thomas Elders Markets data shows that the cost of sending fertiliser to Australia has jumped by $718 per tonne since last May. This is a staggering increase that is sure to impact the bottom line for farmers.

Aside from the cut of fuel excise, other factors were at play for the rising cost of living. Credit: iStock.​

GrainGrowers chairman Brett Hosking said that this perfect storm of supply chain problems in China and the Ukraine war is putting pressure on the already struggling agriculture industry.

The higher fertiliser costs are expected to reduce yields in the months ahead, which will ultimately lead to higher prices for the consumer.

We understand that the economic turmoil that we are currently experiencing is a consequence of band-aid solutions that do not align with long-term goals.

We want to hear your opinions on this. Do you think the government's policies cater to the needs of the people or are these band-aid solutions that only offer short-term relief?

 

[Judig01]

Experts advise Australians to brace for another surge on electric bills and groceries as fuel excise tax impacts logistics and transport companies​

The Government's proposed fuel tax cut could end up costing Australians more, not less, in the long run, according to experts.

The trucking industry has warned that the abolition of the fuel tax credit could add an extra $20 to grocery bills, as businesses pass on the cost of higher fuel prices.

Australian Trucking Association chairman David Smith said that the group has already sent a letter to Prime Minister Scott Morrison, warning him of the possible implications of the tax cuts — which were supposed to aid people with the rising cost of living — making struggling Australians far-off worse.

He said: “The food supply chain can only keep shop shelves stocked if operators can offset the loss of the tax credit.”

“They can only do this through increased rates or a new fuel tax credit levy or other mechanisms."

“Unless this is resolved, it is estimated that this will add $20 per week to the average household’s food bill. This will negate the cost of living relief which the Government sought to provide.”

Australian Trucking Association chairman David Smith said that the short-term relief from the cut on fuel excise tax could cost Australians more on groceries and electric bills in the long run. Credit: iStock.​

The Morrison Government's decision to reduce the fuel excise by 22 cents per litre in order to ease the burden on Australians at the petrol pump in late March is a welcome relief for many.

However, the move has come at a cost to truck drivers, who are now only seeing a 4.3 cent per litre reduction in diesel bills.

It should be noted that prior to the tax cut, fuel excise was 4.2c per litre, but truckies and logistics companies scored a 17.8c per litre fuel tax credit, which included a refund of the excise, minus the Government’s 26.4c per litre road-user charge.

This is an unsustainable situation for the trucking industry, which is already struggling to cope with rising fuel costs.

Mr Smith said that the move will have "unintended consequences", emphasising that about 53,000 trucking businesses are now in limbo due to the increased fuel prices.

Additionally, the Coalition highlighted that while households could save $700 on fuel prices on average, the savings could be negated if groceries were to rise by $20.

It should be noted, however, that the fuel tax change is not the only factor affecting the prices of groceries.

The cost of fertiliser has skyrocketed in recent months, due to the war in Ukraine and the rising cost of natural gas. This has put a strain on grain farmers, who are already struggling with higher diesel and labour costs.

Thomas Elders Markets data shows that the cost of sending fertiliser to Australia has jumped by $718 per tonne since last May. This is a staggering increase that is sure to impact the bottom line for farmers.

Aside from the cut of fuel excise, other factors were at play for the rising cost of living. Credit: iStock.​

GrainGrowers chairman Brett Hosking said that this perfect storm of supply chain problems in China and the Ukraine war is putting pressure on the already struggling agriculture industry.

The higher fertiliser costs are expected to reduce yields in the months ahead, which will ultimately lead to higher prices for the consumer.

We understand that the economic turmoil that we are currently experiencing is a consequence of band-aid solutions that do not align with long-term goals.

We want to hear your opinions on this. Do you think the government's policies cater to the needs of the people or are these band-aid solutions that only offer short-term relief?

Why do we have to import fertiliser?

 

[Ricci]

I can see a time in the not too distant future when I just get Centrelink to pay my pension directly to the supermarkets so that I can get my weekly groceries.

 

[Donk]

Due to medical reasons wife and I are on highway regularly, hospital/Dr visits. Rather noticable that semis are travelling at approximately 90 ks, as we do. Due to fuel saving costs, if you think I am wrong take notice of how many vehicles are doing the same. Travel well, travel safe.