Truck companies warn national supply chain collapse as fuel tax cut forces them into bankruptcy

Truckies are warning of an ‘imminent collapse’ to the nation’s supply chain, saying a bungled tax cut could force them off the road.

Scott Morrison‘s decision to halve the fuel excise tax in response to surging prices caused by Russia’s invasion of Ukraine has meant truck drivers have lost their diesel tax discount.

Truck drivers only see a 4.3 cent cut per litre in their diesel bills compared to the 22.1 cent cut enjoyed by the rest of the population.

Truckies have warned Australia’s national supply chain will collapse as the cut to the fuel excise tax causes companies to go bankrupt

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More than half of South Australia’s truck companies warned they could face bankruptcy due to the tax cut, forcing trucks so heavily relied upon for the transport of food and products off the road.  

In a survey conducted by the South Australian Road Transport Association, 57 per cent of the state’s truck companies said they would be bankrupted by the ‘disastrous’ policy.  

‘The supply chain is now facing imminent collapse, as the trucking industry on which it depends is collapsing,’ the association’s chief executive Steve Shearer told The Advertiser.  

‘The former Coalition government made a disastrous and ill-advised decision on the run to abolish the fuel tax credit payable to truck operators to fund 80 per cent of the fuel excise cut.

‘Truck operators claim the tax credit each quarter, ranging from $2000 to over $150,000, and no business can sustain the loss of such a significant portion of their funds.’

South Australian Road and Transport Association chief executive Steve Shearer (pictured) said truck companies have faced a significant  loss to their funds and  are being forced off the roads

Under the policy, truck companies and drivers no longer receive a rebate cheque at the end of each month – a fuel tax credit they rely on to offset monthly and quarterly tax obligations. 

Most truck operators do not benefit from the fuel tax as they purchase their fuel in advance from wholesalers rather than at the bowser of a petrol retailer. 

Mr Shearer said the cost of fixing the Coalition’s blunder is $350 million and pales in comparison to the looming economical collapse if the fuel tax credit is not restored before the policy’s end date of September 28. 

‘Ninety-two per cent of SA companies that feared bankruptcy said they could survive if the new Labor government fixed the Coalition’s blunder and restore the tax credit from July 1,’ Mr Shearer said. 

‘The cost of fixing the Coalition’s blunder is $350 million, which is a drop in the ocean of the federal budget and pales into insignificance in comparison with the looming economic collapse.’ 

The South Australian survey is set to go national next week as the industry seeks help from the Albanese government. 

The former Morrison government announced a halving of the fuel excise tax in response to surging prices stemming from the Russian invasion of Ukraine. The policy ends on September 28 (pictured, man pumping fuel in Sydney)