Road Transport Forum

Freight rates will rise about 1.4 per cent because of the regional fuel tax proposed in the Budget, the Road Transport Forum estimates.  The increase is on top of the 11 per cent to 18 per cent increase in heavy-vehicle road user charges from April 1 which has already begun to force freight costs up.

"This is a 1.4 per cent tax on freight to fund passenger transport in Auckland," said chief executive Tony Friedlander. He said the tax was "lunacy".

Because so many imports and exports went through Auckland, people well outside Auckland would end up paying for passenger transport they would never use.

Farmers and the freight industry have come out swinging following the government's decision to allow regional fuel taxes of up to 10 cents per litre in Auckland and Wellington.

The fuel taxes, unveiled at last week's Budget, are intended to provide additional funds to build roads and improve public transport. In Auckland, this will include the electrification of the city's rail network - estimated to cost over $1 billion.

The Road Transport Forum, which represents the freight industry, says it should not have to subsidise public transport, because it does not use it.

Chief executive, Tony Friedlander, says a diesel tax of 10 cents per litre will increase freight rates by 1.4 per cent on average.

Federated Farmers vice president Don Nicolson is also joining the attack, saying it is totally inappropriate for farmers to subsidise public transport. He says it is a service the vast majority of rural people never use or derive any benefit from and a lot of diesel is used off-road for agricultural machinery. "While refunds will be available the refund process will be onerous and yet another compliance cost," Mr Nicolson says.

Mr Nicolson says that the fuel tax question is likely to affect the entire country. "Not only is it likely that other regions will implement the tax, but in the 1990s fuel companies averaged the short-lived regional petrol tax meaning that everybody paid. "There is nothing stopping a repeat this time around," Mr Nicolson says.

But the government argues a tax at the 5-10 cent level will be significant enough for petrol companies to implement regionally, rather than spreading a lower 1-2 cent tax across regions as companies did under the previous regime.

However, the fuel tax does have some supporters. The Auckland Chamber of Commerce says trucking will be more efficient once the tax is imposed because fewer cars will be clogging the roads.

It says the freight industry needs to accept fuel taxes as part of the cost of doing business. Nevertheless, chief executive Michael Barnett acknowledges that businesses will need to pass on some costs to consumers in order to remain competitive.

Trucks are covering greater distances on New Zealand's roads, but getting into fewer crashes, Ministry of Transport figures suggest.

Last year, trucks were involved in 74 fatal crashes. Five years earlier, in 2001, they were involved in 76 fatals, but travelled almost 500 million kilometres fewer.

The Road Transport Forum, a lobby group for trucking companies, said the statistics ran contrary to the impression created by recent news stories of trucks being involved in many crashes.

And when they did crash, it was usually the other vehicle's fault, forum chief executive officer Tony Friedlander said.

"Over 92 per cent of all road accidents don't involve a truck. Of those that do, around two thirds of injury accidents between a truck and another vehicle are caused by the other vehicle," he said.

"We were very concerned at reports saying there has been a rise in accidents involving trucks. We have analysed the ministry's statistics and these tell a very positive story about heavy trucks and their drivers."

However, according to figures obtained from the Ministry of Transport by NZPA, 21 per cent of fatal crashes over the last three years involved a truck. From 2000 to 2002, 19 per cent of deadly crashes involved trucks, and the 9-year-low of 15 per cent was in 2003.

However, on a distance-travelled basis, trucks were getting into fewer crashes and killing fewer people.

In 2006, there were 25 fatals per billion kilometres the truck fleet travelled. Five years earlier, there were 31 per billion.

Road transport operators put a lot of effort into making sure their trucks and drivers share the road safely, Mr Friedlander said.

"Truck operators take road safety seriously, as the statistics show. Despite this improvement, the industry is continuing to work hard to further improve its safety performance through proposing measures such as the Operator Safety Rating System which Land Transport New Zealand is now developing," he said.

Some bus and truck operators went on a fuel-tax "buying" spree on Friday and Saturday after the Government gave them just two days' warning of an average 11 per cent rise in road-user charges.

One large South Island bus company is understood to have spent almost $1 million, buying six months of road-user charges at the old rate, which have been in force since 1989.

Industry organisations representing bus and truck firms are annoyed at the short notice of the increase, which came into effect yesterday and ranges from zero to 22 per cent for vehicles weighing six tonnes or more when laden.

The Government has defended its decision to waive a standard 28-day notice period for regulatory changes, saying it was entitled to protect its revenue base, to ensure that all vehicles paid their share of wear and tear to roads.

But the reduced notice period still allowed operators able to raise funds at short notice to buy up road-user distance licences before yesterday's increase.

Christchurch's Red Bus Company, owned by the city council, is believed to have spent about $900,000 to achieve a saving of $150,000.

Bus and Coach Association executive director John Collyns said that was all very well for wealthier operators, but many smaller firms were left in the invidious position of having no time to renegotiate contracts with their customers.

"The Government has been a bit devious shoving this through late on Thursday," said Mr Collyns, who estimated that the tax increase would cost bus and coach operators an extra $4 million a year.

Acting Transport Minister Harry Duynhoven said road charges for vehicles heavier than six tonnes had not risen since 1989, despite an almost doubling of taxes on lighter vans and buses in the meantime.

A Ministry of Transport official estimated that the overall increase would raise an extra $59 million towards roading costs, to which Mr Duynhoven said the Government needed to ensure all vehicles contributed their fair share.

"Vehicles over six tonnes in weight cause a disproportionate amount of wear and tear to roads."

The minister said an extra $1.3 billion committed by the Government to land transport in last year's Budget meant it was spending $300 million more than it would receive from road users in the three years to 2009 "to ensure New Zealand has a world-class transport system".

He said road charges made up about 10 per cent of transport operators' direct costs, so an 11 per cent rise would mean an overall cost hit of around 1 per cent.

That was little comfort to South Auckland cartage contractor Wil Harvie, president of the National Road Carriers' Association, who said he was trying to scrape up enough money to buy two months of travel for a saving of around $300.

Mr Harvie said he was fortunate in having only a small number of fixed contracts, meaning he would in most cases be able to pass on extra road charges, but he feared some operators might be driven out of business.

Road Transport Forum chief executive Tony Friedlander said the Government was guilty of "either a casual indifference to the financial viability of transport businesses across New Zealand or total ignorance of how business is carried out".

Tax on petrol also rose yesterday, by an inflation-adjusted 0.69c a litre, as did road user charges on vehicles of six tonnes or less - by 0.64c for every 1000km including GST.

But the Automobile Association has called on oil companies to absorb the petrol excise increase. As of last night petrol prices had yet to go up and oil companies were not commenting.