Fuel excise & unintended consequences
While majority of the country will enjoy the slight reprieve on cost of living thanks to the fuel excise reduction in the recent budget announcement, those in the transport industry are not as thrilled.
This temporary reduction in the fuel excise, while reducing the cost of fuel at the bowser, will also have a direct impact on the Fuel Tax Credit rate our transport clients receive. With some rates being halved and others being removed all together while the reduction in excise is in place, transport, mining and farming businesses will be sure to see increases in their Business Activity Statement bills over the next 6 months.
While technically those who operate heavy vehicles on our public roads will still receive a benefit from the fuel reduction overall, the shine on this budget announcement is surely dulled as this benefit dwindles down to the likes of 4.3 cents per litre. While those operating on private roads will have their credit offset completely by the excise reduction.
For an industry that has already felt the recent effects of natural disasters, the global pandemic and the increase in fuel prices, we can’t help but wonder how the practical implications of the Government’s recent budget announcement will flow on to our transport clients.
Its also a subtle reminder that there are often unintended consequences to Government announcements, which leaves the aim to please everyone even more difficult in an ever increasingly complex world.