Death and taxes
We’ve all learned a lot from the Covid-19 experience so far. No matter how resilient a business thought they were, months of no work, or severely reduced business, hits the bottom line and for those who can stay operating, costs have to be cut. We can see that in the number of people being laid off work every day.
Road freight transport has played a critical role in keeping New Zealand moving through the various stages of lockdown. Trucking will be equally important through the economic recovery as New Zealand will be heavily reliant on export goods making their way to markets around the world.
Trucking operators have adapted through the various restrictions imposed by Government and have done their best to keep some kind of business going and people employed.
Economic recovery is a long way off. While the trucking industry continues to respond quickly and well to the challenges presented by Covid-19, everyone has taken hits during New Zealand’s lockdown, and the hits keep coming.
Like all businesses, trucking companies want to get back to full operations as soon as possible, recover their losses as quickly as they can, and keep good people employed.
The challenge ahead for trucking operators that already work with tight margins will be the ability to absorb, or pass on, increasing costs when all businesses are tightening their belts.
This is why the RTF is asking the Government to again consider the increase to Road User Charges (RUC) of 5.3% on 1 July 2020. Back in April the Government said no to our first request to stop this increase, but the business environment is now even worse.
I am aware that trucking companies with customer agreements that allow them to negotiate increases on Government imposed charges are finding, in spite of contractual obligations, those customers are saying no to adding the RUC increase into costs.
If trucking companies cannot pass on this cost, they will have to absorb it. For some that will impossible in this environment.
New Zealanders are struggling to make ends meet, and businesses are trying to get back on their feet in the worst economic conditions most of us have seen in our lifetimes. No one can sustain increased costs. Yet if this tax goes ahead, trucking companies that want to survive will have to pass the cost on and the cost of living for all New Zealanders will increase.
Pretty much everything travels on the back of a truck, so it is a cost on the final price of all goods.
Benjamin Franklin said, in 1789, “in this world nothing can be said to be certain, except death and taxes”. While the RTF appreciates the value of tax to keep our road network operating, in this Government’s own words, these are “unprecedented” times. Surely that means, in 2020, rules can be changed to accommodate what is looking like a very grim landscape.
– Nick Leggett, CEO, Road Transport Forum