Diesel tax reform 'would aid farmers'

DEAN KOZANIC/The Press

FARMING COSTS: Road Transport Forum chief executive Tony Friedlander believes farming exports could be more competitive if the charges were replaced by a single diesel tax.

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Excessive road user charges are hitting truck-reliant farmers in the pocket, a transport lobby group says.

Road Transport Forum chief executive Tony Friedlander believes farming exports could be more competitive if the charges were replaced by a single diesel tax.

A Lincoln University report commissioned by the forum shows trucks servicing the agricultural sector travel more than 234 million kilometres a year.

But trucks carrying farm produce are made less competitive by road charges and laws limiting the loads carried. Some trucks carry only 80 per cent of their potential, the forum says.

"The road user charges [the Government] generates would be far in excess of the extra cost [to road maintenance]. So there would actually be a net income gain for the Crown," Mr Friedlander said.

Sheep and beef farmers were the heaviest users, responsible for nearly 138 million kilometres a year, according to Lincoln University's agribusiness and economics research unit. Next come dairy farmers on 95 million and kiwifruit farmers on nearly 1.7 million.

Together the three sectors accounted for more than 80 per cent of New Zealand's agricultural land use, and most farmers had no alternative to road transport.

Mr Friedlander said it was well known that farmers needed trucks, but till now now nobody had quantified just how dependentthey were on the road transport industry.

The survey was conservative in that it dealt only with direct inward and outward cartage from the farm gate, and not with the rest of the distribution chain, he said.

It was commissioned on the back of a Government study on the carbon footprint for agriculture.

Mr Friedlander said a single diesel tax and allowing trucks to carry more were essential first steps to containing the farming industry's costs.

"On our calculations, sheep and beef farmers spend about $522 million annually on road transport. That's nearly 11 per cent of farm expenditure a year.

"Road transport costs dairy farmers about $361 million a year, or nearly 9 per cent of on-farm expenses, and kiwifruit farmers' road transport bill is around $6 million a year, or nearly 2 per cent of farm costs."

Policymakers needed to take into account that anything which drove up road transport costs had a direct impact on the profitability of export earnings.

He said New Zealand road transport rates were already more than 30 per cent higher than in Victoria and Tasmania because of the Government transport policies.

"If New Zealand road transport rates were the same as in those two states, beef and sheep farmers would save around $150 million a year, dairy farmers $100 million a year and kiwifruit farmers nearly $2 million a year."

The forum would continue to lobby the Government for a change to a single "much more efficient" diesel tax, he said.