The Australian Trucking Association (ATA) has called on the government to reject the Productivity Commission’s plan to more than double the tax on truck fuel, warning it would increase costs for operators and households alike.
ATA Chair, Mark Parry, released the 2026-27 pre-budget submission today, highlighting that the proposal would phase out fuel tax credits for trucking operators. Currently, operators pay an effective fuel tax rate of 32.4 cents per litre, which is set to rise to 52.6 cents per litre from Monday, 2 February. The commission’s plan would see this climb to 66.1 cents per litre by 2035.
Parry said the fuel tax credit system was essential for keeping freight costs manageable across Australia, including for rural exporters.
“Removing fuel tax credits would increase costs for industry and hard-pressed households, who have already faced rising electricity and childcare costs,” Parry said.
“Many trucking businesses would struggle to pay the extra fuel tax, which would increase by about eight per cent each year. The industry has already dealt with a 19 per cent increase over the last three years, along with driver shortages, extended payment terms, and the impact of natural disasters.”
Parry said the commission’s plan would not reduce emissions.
“The report does not consider the effect of removing fuel credits on decarbonisation, but in reality it would be zero. Diesel remains essential for freight, and there is no single technology ready to replace it,” he said.
“Regional communities rely on trucks for daily necessities. This plan would simply be an unavoidable tax increase. It would also reduce the financial capacity of operators who could invest in low-emission vehicles.”
The ATA is instead calling for targeted measures to support decarbonisation, including a voucher scheme to reduce the upfront cost of electrification or alternative fuels, a low carbon fuel standard to encourage renewable diesel, and support for high-productivity, low-emission vehicles.
