Companies

Jul 4, 2011

Carbon tax last straw for trucking industry demanding answers

A union heavy who helped install Julia Gillard as prime minister now threatens to turn against her not because of her backflip on a carbon tax, but a backdown on supporting mandated rates of pay for truck drivers. It's an age-old argument.

Jason Whittaker — Former <em>Crikey</em> editor and publisher

Jason Whittaker

Former Crikey editor and publisher

A union heavy who helped install Julia Gillard as prime minister now threatens to turn against her not because of her backflip on a carbon tax, but a backdown on supporting mandated rates of pay for truck drivers. To those who've worked in and for the transport industry -- I spent more than six years reporting on the sector -- the comments from Transport Workers Union boss Tony Sheldon in media yesterday and today are like a broken record. Just like the threat of blockades and go-slows and civil disobedience -- attempts in the recent past have failed; truck operators never show up because they're too busy trying to make a buck. But with the government's carbon tax, and the likely impact on fuel costs, Sheldon has a new spin for journalists and a larger wedge for the government in taking on clients -- led by the big two supermarket chains, the union's biggest enemies -- that screw down contract rates and put owner-drivers and truck operators at risk. The union boss confirmed to Crikey this morning he will campaign against a carbon tax if Gillard doesn't keep her promise on industry support. Her vow first came two years ago at an ACTU conference in Brisbane -- truck drivers "shouldn't have to die to make a living", Gillard declared as workplace relations minister, "and we will be working on safe rates to prevent them from having to take that risk". The idea of government intervention into a commercial marketplace was unprecedented in many ways and alarmed employer groups, but the stance was backed by numerous reports over many years, the latest from the National Transport Commission in 2008 which found "economic factors create an incentive for truck drivers to drive fast, work long hours and use illicit substances to stay awake". Poor pay causes road deaths. Sheldon, an ALP Right powerbroker and long-time TWU boss, rejoiced at the commitment and spoke loudly on the advisory body set up by the government; union figures continued their trick of dragging out coffins and crosses at protests to indicate the number of drivers who continue to die under pressure from bosses and clients -- almost 300 last year, they say. A discussion paper was released, backed by parliamentary secretary Jacinta Collins, industry was consulted, and ministers from Mark Arbib to Anthony Albanese appeared to back the cause. This time last year Gillard spoke of the "compelling case" for action. But there's been no action. Legislation hasn't been drafted, Sheldon told Crikey, citing "constant bureaucratic stumbling blocks in actually implementing client accountability and safe rates". Gillard's office didn't respond to questions on a timetable or whether the government remains committed to enforcing contract rates. The carbon tax promises to drive even more complexity -- and ultimately higher costs -- into fuel tax arrangements for the industry. While Gillard has declared ordinary motorists and "light commercial vehicles" will be compensated for the impact of the tax at the bowser, trucks (vehicles over 4.5 tonnes) are set to pay. Industry believes the government will reduce the tax rebate operators receive on diesel fuel which will push costs up to 7 cents per litre higher. And there are fears the tax could distort the freight task. As trucking industry lobbyist Philip Halton told Australasian Transport News today, shielding vans and light trucks from the tax will provide incentive for operators to ditch their more efficient trucks for smaller vehicles -- resulting in even higher emissions. The highly-contentious issue of road user charges, which the Productivity Commission will examine in a government concession to the Greens, add another layer of complexity and debate. Higher costs -- and the industry has battled rising oil barrel prices for years -- are not a problem in themselves. The challenge for truck operators -- by some calculations the biggest contributor to GDP, ahead of mining and manufacturing -- is in recovering their costs from prime contractors. Coles and Woolworths (and others) want to sell bread for cheaper, they squeeze contractors like transport suppliers harder to maintain profits and those businesses demand greater productivity from their sub-contractor and owner-driver workforce. And as everyone in a cut-throat sector knows, there'll always be someone who will do it for less. Sheldon insists he's "not a climate skeptic". But as he told Crikey today: "I'm going to campaign against any tax, any arrangement and any failure by this government to deliver safe rates... I will campaign against any tax that will kill more people on our roads." Even if that means embarrassing a government already under pressure to deliver climate change policy? "The government has to take responsibility for the decisions it makes," he said. "They [Labor] put all their eggs in one basket in regards to a carbon tax and a carbon trading scheme. They've managed to isolate their traditional constituency." Higher costs in transport services impact businesses up the supply chain and customers down the chain. As Queensland trucking operator Darren Nolan of Nolans Transport told us today: "Heavy vehicles already pay significant costs, and registration fees have gone up. Any costs we incur will have to be passed on to consumers, which means you'll have to pay more for your groceries. "From a company perspective we are significantly concerned, and I'm concerned one, from a company financial perspective, and two, on the impact it will have on our customers and growers who are already trying to recover from natural disasters. We pay significant registration costs to supply food and goods to the nation. The more we have to pay the more our consumers and customers will have to pay, simple as that." A carbon tax also hikes compliance costs in an industry already strangled by red tape. "Don’t forget the administrative burden that comes with this because someone would have to calculate the emissions and usage," Nolan said. "Someone would have to be paid to do that; there is more than a significant administrative burden." So does the transport industry deserve compensation like other sectors? Not necessarily, long-time sub-contractor and industry representative Rod Hannifey says -- "we just need people to understand that it costs". "It becomes an inflationary thing: wages will go up, the cost of goods will go up, and the cost of doing business will go up," he said. "We have a problem now that the bigger companies want their prices lower tomorrow than they want it today." The largest and smartest transport operators have made great strides in reducing their fuel use through hybrid engines and aerodynamic savings (the design of rigs can have an enormous impact on efficiency). Previous government regulations mean trucks run the cleanest engines on the road. But smaller operators don't have the financial support to invest in greener technologies. Frank Black, the owner-driver representative to the Australian Trucking Association, said: "People in the industry are always looking to be emissions friendly, they’re always looking to upgrade to better equipment, but it costs to upgrade, and more tax makes that hard." To transport industry players the arguments on costs and clients are as old as time. In a carbon-constrained world, the government may now have to address them. *Additional reporting from Crikey interns Andrew Duffy and Lawrence Bull

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32 comments

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32 thoughts on “Carbon tax last straw for trucking industry demanding answers

  1. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @GAVIN MOODIE — Posted Tuesday, 5 July 2011 at 2:17 pm
    I am with you, as you and other point out carbon pricing will have an miniscule affect compared to all the other cost variables but unlike those will be stable and easily covered.
    It is also only temporary (miniscule and temporary).
     Human nature:- while sitting on a huge boil/carbuncle all attention is on the mosquito landing on ones nose in case it bites.

    @DAVID ALLEN — Posted Tuesday, 5 July 2011 at 3:50 pm
    While the carbon price will make stuff all difference to their costs it will start the development of your very accurate vision of the future and save fuel which is going to run out sooner leaving lots of little trucks around with empty tanks.

    @LIZ45 — Posted Tuesday, 5 July 2011 at 2:53 pm
    I feel for your pain. Don’t let it get you down, we are going to make the difference and you’re helping.

    @TIM NASH — Posted Tuesday, 5 July 2011 at 7:13 pm
    Diminishing supply bringing on rising prices ++for fuel will sort the trucking business longevity out but the carbon price will start the process or replacements happening.

  2. Bellistner

    There is not one option out there for a low emission truck, electric or hybrid from any truck makers and you have to ask yourself why?

    Because there is ZILCH demand.

    There’s no long-range low-emission truck, but there is a after-market mod for some trucks that allows the use of LPG/Diesel Dual Fuel. For short-range deliveries, there’s a small number of makers such as Miles Electric Vehicles, and the Port of LA is trailing an electric ‘container’ truck capable of 100km range.
    If a fleet is ‘captive’ (ie, goes from depot A to Depot B, and return), it makes planning and conversions a whole lot easier.
    My Partners’ Father does Courier driving for a living, and does probably 300km/day. That’s outside the range of a BEV at a price point most businesses are willing to pay (but doable), but if it was a Series hybrid, it’s bang on what’s needed.

  3. michael crook

    Good comment AR. Glad someone remebered that.

    Frank, I think you will find that current renewable technology is quite capable of delivering baseload power, a la Spain/Portugal. The only thing lacking here is the politcal will to do it. have a look at the BZE, or 100% renewables web pages, very informative.

  4. Frank Campbell

    Michael C:
    One reason Spain and Portugal are economic basket-cases is the colossal waste of capital on wind turbines.

    It’s estimated that 2.2 jobs are lost in Spain for every “wind” job created. In Australia (and no doubt elsewhere) “wind” jobs cost over $1 million each.

    And the power generated is virtually useless.

  5. Charles Bryant

    The proposed carbon tax on what Gillard calls the ‘the big poluters” is absurd.
    It is not the producers of our electricity the cause, it is you and I and every citizen who demand the supply of electricity for our myriad electric items and we scream when that supply is interupted. New power stations are being built to supply all these ” little poluters”
    Wake up Australia and ignore the spin.
    In my life time I have witnessed the death and burial of COMMONSENCE and the birth of SPIN.
    Charles

  6. Gavin Moodie

    Of course power generators will pass on the carbon tax to their customers, which makes their screams for compensation illogical – perhaps another form of spin.

  7. Liz45

    @GAVI{N – Sometimes I wish I was under a general anaesthetic – then all the bs could just carry on without me knowing about it. I just get fed up with the rubbish, the selfishness is mindblowing! Wait until it all goes pear shaped? Those who are screaming now will be the loudest whiners when the Barrier Reef is permanently stuffed! Or the great whales start to die from starvation! The Fishers and Shooters Party (NSW)will whine that fish stocks are down and getting worse. Doesn’t anybody care, that if the oceans’ temps keep rising, even a little bit, no more fish – can’t reproduce if temps rise?

    Thanks Harvey! (On a happier note – My self sewn wattle tree is in bloom – and the fragrance is beautiful. I don’t even know what type it is, but it has those lemon ‘fluffy’ flowers – drop dead gorgeous! The foliage is fine almost like a ‘fern’. I hope it’s not one that has a short life span – another self sewn one has croaked? Maybe too much rain? My only complaint is that it’s now so tall I can’t take a good photo of it. Being a shrimp myself doesn’t help. Standing on a step ladder to clean the top of my car is one thing, doing the same to take a photo might scare the neighbours – lost the plot scenario, lol) I’m looking forward to the PM’s Address on Sunday, and am hopeful that it will be positive. The hysteria and bs is just tiring now!

    My niece’s ex husband was/is a truck driver. He believed (haven’t spoken to him for several years) that the taking of drugs is widespread among truckies, whether they’re ‘no doze’ type drugs or others I don’t know, but the way some of them drive it doesn’t surprise me? I also believe that a lot of drivers are off duty police officers? How true that is, again I don’t know. However, to be fair, I’ve also met truck drivers who’ve been very kind and helpful on the road. In March I drove to Newcastle, and on the highways it wasn’t uncommon for trucks to overtake me, while I was doing 110? I thought they were limited to 100 max? I’ve never been tail gated etc but I’d just pull over and let them go – rather they’re in front of me than ‘in my boot’?

    The NSW Labor Govt cut back on all or a lot of petrol transported by rail – the savings were small? At the time it was asserted that there’d be more accidents involving tankers and cars, and there have been – one in Canberra prior to xmas ’09 or ’10 and one near Katoomba I think. Both involved the deaths of all concerned. The Canberra accident involved the truck driver, and a family of 5 – two parents, 3 kids, little kids, one only a baby – all incinerated! There has probably been more.

    There’s been a campaign for almost 15? years for a rail line from the Port Kemble wharf over the mountain. X number state and federal govts just talk about it, but nothing has been done. I think it just needs to be completed. I wonder if the truck manufacturers, petrol companies etc have played a role in it being fobbed off, year after year. That would take a lot of trucks off the road, including those that take new cars from Port Kembla back to Sydney? Provided more jobs on the wharves, but now we have more trucks on the roads, causing road surface damage too! Oh dear! (sigh)

    @MICHAEL CROOK – Indeed!

  8. GlenTurner1

    “…shielding vans and light trucks from the tax will provide incentive for operators to ditch their more efficient trucks for smaller vehicles”

    The move to lighter transport vehicles in urban areas is going to happen anyway. The age of trucking companies getting away with running vehicles which are massively incompatible with other road and footpath users is ending.

    If a carbon tax was present on lighter vehicles this would accelerate the removal of heavy vehicles. People would trade down kilometers traveled in their 4WD to do some travel in more efficient vehicles: scooters, bicycles, shoes. That would increase incompatibility of heavy trucks even more, leading to a peak in deaths, and bringing the use of heavy vehicles in urban areas to a more abrupt end.

  9. galeg

    Hands up all who are going to do the right action of locking their car in the garage and taking a bus too do their weekly shopping, pick up the kids from school, walk the Kms to the nearest rail station. Sorry there is an alternative, and that is to dust off the old pushy in the back shed and use that.

    What a waste of time,
    a. Increased business costs will be passed to the consumers
    b. The Feds compensate the consumers

    Why should I change my life style?

    For renewables, who in their right mind would invest in them when, unless all businesses and the vast majority of the general public accept the tax, nothing will be achieved, and the tax scrubbed / rolled back by the next Gov. Obviously any money invested would then be lost. This does not hold for Gov investment as they seem to screw up everything anyway.

  10. Suzanne Blake

    Hope the Union gouges her policy and in public.

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