Fuel tax indexation won't affect grocery prices: truckers

The Federal Government'’s decision to reintroduce fuel tax indexation will not affect the net fuel price paid by trucking operators, according to the Chief Executive of the Australian Trucking Association, Stuart St Clair.

As a result, Mr St Clair said the decision would not affect freight costs or grocery prices.

In Tuesday's Budget, the government announced that the fuel tax rate would increase twice a year in line with inflation, starting on August 1, 2014. The fuel tax rate has been frozen at 38.143 cents per litre since 2001.

Mr St Clair said the decision would not increase the net fuel price paid by trucking operators because of the fuel tax credits system.

“Under the fuel tax credits system, businesses can claim fuel tax credits for each litre of fuel they buy for use in trucks that meet one of four environmental criteria,” Mr St Clair said.

“Businesses can claim for the full amount of tax they paid on the fuel when they bought it, minus the road user charge, currently 26.14 cents per litre. As a result, the twice-yearly indexation of the fuel tax rate will result in matching increases in the fuel tax credits operators can claim.”

Mr St Clair welcomed the government'’s decision not to change the fuel tax credits system.

“The ATA pressed the government to keep the fuel tax credits system as it is, despite suggestions that it could take a haircut,” he said.

Mr St Clair said the trucking industry more than paid its way on the road system through the road user charge and very high registration charges.

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