The Federal Budget was announced late-March this year by the Australian Federal Government in the hopes that it will strengthen the country’s short term economic outlook, but does it have the viability for a long-term solution?
In summary, the 2022-23 budget’s main goals are to decrease Australia’s unemployment rate, deliver more jobs, invest in stronger security/defense, improve education and invest further in Australian essential services. They also want to assist with the cost of living, support small businesses and finally, to inject capital into Australia’s roads and rail infrastructure.
A significant part of the budget for the Australian transportation sector is the long-awaited acknowledgement of the impacts of the Ukraine-Russia war, rising inflation rates, rising fuel costs and the impact they pose on everyday Australian families and businesses.
One of the most relevant changes is the temporary fuel excise relief for the next six months. This will provide relief for sky rocketing fuel prices that has been created from the Russia-Ukraine war. The Federal Government has instituted a 50% reduction in fuel excise (fuel tax), decreasing the overall excise from 44.2 cents per litre to 22.1 cents per litre.
Assistant Minister for Road safety and Freight Transport, Scott Buchholz, said he couldn’t remember a period of time when Australia had such a significant cut to fuel excise.
“I welcome the cut to the fuel excise, every time Australians, be it motorists or the transport sector, fill up their tank for the next six months,” said Buchholz. “Whether you’re line haul between capital cities or running round the city, it will cost truckies less.
“This cut in fuel excise will flow through to the bowser over the next two weeks as retailers replenish their stocks.
This announcement benefits logistics businesses significantly, and can save fleets tens-of-thousands of dollars over the 6-month period, but more importantly it will ease some of the pressure that Australian fleets have felt over the last couple of years. Australia’s transportation industry in particular has been hit hard by a series of extreme events, from Covid-19 to extreme weather events, increased cost of living and cost of fuel/transportation.
Although the announcement is welcome news, many transportation businesses will remain ‘in the red’ for some time.
The big question that the budget doesn’t answer is this: ‘What support will there be for the transportation industry for the remainder of 2022 – 2023?’.
The Federal Government has rolled out a roadmap for short-term relief for Australian businesses, however, there is less known about what long-term support will be provided for our transport and logistics industry.
The industry has been thrown a lifeline, but how long will this last for?