Costs on every product a farmer buys, from tyres and parts right through to feed for stock and everyday expenses to live, is set to increase further come the end of September if the fuel tax credit is not reinstated to keep the cost of freighting down.
That was the warning from industry representatives at the Livestock & Rural Transporters Association of SA conference last weekend.
The cut in fuel excise of 22 cents a litre came into effect on March 30 - the same time businesses using fuel in heavy vehicles on public roads were no longer able to claim fuel tax credits with the road user charge exceeding the excise duty paid.
This change has crippled truck enterprises across the country because the fuel tax credit was automatically taken off the GST paid at BAS statement times - be it monthly or quarterly, says Australian Trucking Association chair David Smith.
He said the previous fuel tax credit was 16.8c/L would equate to a massive credit for most operators with more than a handful of trucks.
LRTASA president Frank Tedesco said without the credit on their fuel tax, the price of diesel would need to be passed on in the cartage charge with the end user copping the brunt.
"If the fuel tax credit was reinstated, that would bring prices down as well, because transport rates wouldn't have to be so high," he said.
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"You are getting a return back to offset the cost of the fuel levy so that would be able to reduce some of your running costs where there would be no increase to the end consumer."
He said if the government decided not to reinstate the tax credit and put the fuel excise back up then freight rates would lift to as much as double.
"For businesses that rely on the credit through a cash flow setup - it will put some businesses out," he said.
Mr Smith said they couldn't do anything about the global situation or supply and demand.
"We have to pay what the bowser price is - even though it's hurting like hell," he said.
"We hope the tax credit is reinstated but there is no guarantee that will be the case."
LRTASA vice president Xavier Beinke said his business pricing was based on diesel expenses of $1.40/L.
"We have worn it as it has gone up and up and up but it's gotten to the stage where we can't wear it anymore so we have to pass it on in the form of a fuel levy," he said.
"Our rates haven't gone up - it's costing us more to stay on the road and we cannot do it anymore as it's cutting into our profits."
The trucking industry were thankful SA Transport and Infrastructure Minister Tom Koutsantonis acted immediately to write to federal minister Catherine King to ask for restoration of the fuel tax credit.