If the Road User Charge returns on July 1 as planned, Australia risks plunging straight back into the same crisis that threatened to bring the nation to its knees in March.
When the war in the Middle East first started, the price of fuel significantly rose. The price of diesel, the fuel that powers almost all Australia’s trucks, rose close to 90 per cent. This meant at the pump some businesses, if they could find a supply of diesel, were paying up to $3.25 a litre. Fuel cards were maxed out. Trucks were parked because operators simply could not afford to fill them. A survey completed in April by NatRoad found that 38 per cent of operators had taken a truck off the road.
This threatened to significantly increase the price of basic goods and services, including essentials like groceries and medicines, at a time many Australians were already struggling with the cost of living.
At the end of March, the Federal Government made the sensible choice to prioritise stability and throw truckies a lifeline. The Road User Charge (RUC), a 32.4c per litre levy on heavy vehicle fuel use, was removed for three months from April.
This change has helped to keep our nation moving – with all the benefits it brings. Inflation declined in April, largely due to the success in reducing fuel prices and the carry-on impact through the Australian economy.
However, the recent federal budget confirmed the RUC will be reinstated from July 1. This will immediately add 32.4 cents a litre to the cost of fuel for every truck driver in the country.
Meanwhile, the conflict in the Middle East remains unpredictable. Global fuel markets remain volatile. Regardless of when it ends, the war will impact supply chains for many more months, a fact acknowledged by the Federal Government.
When trucking costs surge, every Australian household pays. Road freight carries around 80 per cent of Australia’s domestic freight.
The milk in your fridge, the groceries on supermarket shelves, the feed delivered to farms, the parts keeping regional businesses running — almost all of it arrives by truck. When fuel prices spike, costs have to be absorbed. Once they can’t be absorbed further, they can move through the economy quickly.
Every rising cost is a direct hit to an industry already operating on razor-thin margins and carrying enormous pressure across fuel, insurance, wages, finance and compliance.
Even before the war, these cost and compliance pressures were contributing to sham contracting, an illegal practice that seeks to classify employees as contractors, therefore reducing costs such as superannuation. The government, to their credit, is taking strong action to try and stamp this out.
Without leadership and practical intervention now, Australia risks sliding straight back into the same cycle we saw only months ago. Regional Australia will feel this first and hardest.
Unlike metropolitan centres, regional communities do not have alternative freight options. They rely entirely on trucks to move food, fuel, medicine, livestock, machinery and essential goods. Every extra cost imposed on trucking businesses flows directly into regional economies.
And the warning signs from operators are already there.
Transport businesses are delaying investment in their businesses and small operators are still questioning whether they can stay on the road. Many are still recovering from the financial shock of March while trying to prepare for the next wave.
Suspending the RUC for heavy vehicle freight until the end of the year would deliver certainty to an industry which has to keep going.
Because when trucks stop, Australia stops.
We have already seen what happens when fuel prices spiral and operators are left carrying the burden alone.
Australia cannot afford to make the same mistake twice.
