High freight costs a kick in the guts for farmers

Friday 25, January 2008

High freight costs a kick in the guts for farmers

Farmers will be horrified that freight costs are 30 percent higher in New Zealand than in Australia, said Don Nicolson, vice-president of Federated Farmers.

Mr Nicolson was commenting on a new report from Victoria-based consultancy, Pearson Transport Resource Centre, which has found that freight costs are higher across the board in New Zealand than in Australia. In fact, for the same-sized trucks, costs are one third higher in New Zealand.

The report, released today by the Road Transport Forum, identifies two main reasons why freight costs are so much greater in New Zealand: Australian trucks pay much lower road taxes and can carry heavier payloads.

“Freight is a significant direct and indirect cost for farmers and higher freight costs are bad news, especially for sheep and beef farmers who are really struggling with reduced incomes and increasing expenses, Mr Nicolson said.

“The report clearly shows the government can and should do its bit to fix the problem. Federated Farmers has already been calling for the government to allow heavier trucks to operate in New Zealand because of the economic and productivity benefits for the industry.

“It is also important to make sure that the appropriate costs are being allocated to trucks versus light vehicles. If too much of the road network’s costs are being loaded on heavy vehicles then the formula for Road User Charges could be recalibrated accordingly.

“More generally, the government must address the compliance costs being faced by business generally and ensure that it continues to invest to improve New Zealand’s transport infrastructure - better roads will lead to significant productivity and economic benefits for the industry.

“Federated Farmers also opposes the introduction of further fuel taxes such as the regional fuel tax. The regional fuel tax will hurt the agricultural sector because by taxing diesel it introduces huge compliance costs for both farmers who have to apply for a refund and Land Transport New Zealand who has to process the claims. The costs of these claims will ultimately be borne by farmers by way of higher freight rates,” said Mr Nicolson.

ENDS

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