CPI fee increases don’t pass the pub test

At NatRoad, we are well aware of the many pressing challenges facing our industry, particularly as our nation deals with a cost-of-living crisis. While governments work to provide relief to everyday Australians, the upcoming fee increases by the National Heavy Vehicle Regulator (NHVR), set to commence on July 1, seem out-of-step. We believe these rising costs may exacerbate an already difficult situation for many truck operators.

The main issue hurting our operators today is the relentless increase in operational costs. Recently, NatRoad commissioned economic research to review this issue and the findings are stark. According to HoustonKemp, the costs of operating a nine-axle B-double, traveling 250,000 kilometres per year, have increased by over 20 percent in the past six years. This significant increase has been driven by higher diesel prices, labour costs, maintenance expenses, tire costs, and rising interest rates.

Despite the end of the pandemic, the financial pressures have not eased.

Further research by IBISWorld underscores this squeeze on industry revenue, showing that profit margins declined by 1.8 percent over the last five years, now standing at a mere 2.3 percent. This wafer-thin margin reveals that, for many trucking businesses, profit margins are virtually non-existent or in some cases regressing. In addition, industry profits have seen a concerning decline of 7.4 percent. The reality is that many trucking businesses are operating on a knife-edge.

Moreover, the review of the Heavy Vehicle National Law has yet to provide tangible relief for operators. The burden of non-safety-related fines remains unaddressed, adding another layer of financial strain. The proposed shift towards an automated access system, based on the Tasmanian model, aims to reduce reliance on permits. However, the commitment to delivering this reform will need to be brought into question if the reliance on revenue from permits is poised to increase.

As we navigate these challenges, it is crucial for policymakers to engage with industry stakeholders and develop solutions that address the root causes of financial strain. Only through collaborative efforts can we ensure the sustainability and resilience of the trucking sector, which is vital to Australia’s economy and supply chains.

It is therefore essential for governments to carefully consider the broader impacts of aligning cost increases to CPI in a bureaucratic manner, without considering the broader consequences. These increases may seem justified on paper, but they fail to account for the harsh realities faced by our industry.

When governments consider fee increases, they must be balanced with the real-world impact on operators. Our industry cannot afford to bear additional burdens without risking significant economic consequences, especially as our nation’s dependence on trucking remains unwavering.