November 18, 2022

Trucking industry should bear its full costs; further subsidies for trucking is bad policy

Pictured: a row of trucks prime movers. Photo credit: Dale Staton from Unsplash.

Australia isn’t getting the best deal from its trucking industry. Trucking is heavily subsidised, it is polluting, and it is dangerous – many Australians are killed and injured in heavy truck accidents each year.

We don’t think it’s good policy to give yet more subsidies to this industry at the further expense of all other Australians.

But that’s exactly what trucking industry executives, shippers (who hire trucking services), and their representatives want – more of other people’s money.

Dealing with unavoidable costs

It has often been said that all businesses face a dilemma of how to deal with unavoidable costs such as rent, infrastructure, labour and power. Those same businesses are then forced to either absorb costs or pass them on to their commercial clients.

Shipping Australia agrees completely with this sentiment: accordingly, trucking companies should be required to either absorb operating costs, such as paying Terminal Access Charges as levied by marine terminal operators, or pass these on to their commercial client (freight forwarders, shippers and consignors).

Bad policy and bizarre reasons

Unfortunately, the Productivity Commission has, in its draft report, has come up with a rather bad policy recommendation that trucking businesses should – for a fairly bizarre reason – be absolved of their own business costs and the huge externalities they impose on Australians.

There are trucking operators that are making huge profits and revenues off the back of the freight boom – not that you’d know it from listening to industry representatives. Yet there are repeated, strident, and vigorous calls for subsidy by being absolved of having to pay legitimate Terminal Access Charges.

Huge subsidies directed to trucking

Yet the trucking industry is already extremely heavily subsidised. About AUD$4 billion a year is directed to the trucking industry which does not pay its fair share of the costs of road creation and maintenance.

Consider this November 2019 statement from what was formerly known as the Transport and Infrastructure Council, which is / was a meeting of all the Transport Ministers from around Australia.

“Heavy vehicle charges: Council considered the advice of the NTC, and acknowledged that… there was a growing gap between road expenditure and revenue from charges. National heavy vehicle charges, which are designed to recover the heavy vehicle share of road expenditure, have essentially been frozen since 2014… Council identified a preference for charges to rise by 2.5 per cent in 2020-21 and 2.5 per cent in 2021-22, subject to consideration by governments where necessary. Council noted the charge increases would be significantly less than the amount of 11.4% estimated by the NTC as necessary to recover the heavy vehicle share of recent road construction and maintenance costs“.

Trucking can pay its own way, but it lobbies – successfully – to make everyone else pay for the trucking industry instead. And that’s just not right.

Trucks are very dirty

Worse, trucks are very dirty. Per tonne-kilometre, they belch out huge volumes of greenhouse gases. They are the second-highest polluters of greenhouse gases per tonne-kilometre, only aeroplanes are worse. In Australia, trucks produce more carbon emissions than rail, aviation and shipping combined.

Among other things, trucks belch carbon monoxides, nitrous oxide, sulphur dioxide and particulate matter. These are damaging to human, plant and animal health. They cause lung cancers, aggravate heart disease and cause a range of illnesses. They can severely damage eco-system health and agricultural productivity through, for example, the formation of acid rain.

Trucks are hazardous to human health

Trucks are also directly hazardous to human health.

About seven Australians a fortnight are killed because of heavy truck accidents; just under ten Australians a week are hospitalised because of heavy trucks, according to the official booklet, “Road trauma involving heavy vehicles 2020 statistical summary“.

The Productivity Commission’s recommendation would, if carried through, subsidise an industry that is already highly subsidised. The recommendation would, if carried out, make rich Australians richer at the expense of all other Australians. It would also help to grow an industry that is one of the worst environmental offenders in the transport sector.

It would subsidise and help grow an industry, which, each year, makes hundreds of Australians sick, greviously injured, or dead.

And that’s just not right.

Condemnation

On these grounds, the Productivity Commission’s recommendation to absolve the trucking industry of the costs that it should rightfully bear is a truly awful policy and it deserves to be condemned.

And we do condemn it.

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