How To Minimise The Impact Of Rising Fuel Tax

Although the latest rise in fuel tax was a relatively modest 1.5 per cent, further increases are already on the horizon. Whether you're managing a large and complex enterprise fleet, or a handful of vehicles for a small business, it's time to address this issue.

The federal government increased fuel tax from 38.1 to 38.6 cents per litre on November 10. It also reintroduced indexation with inflation, which will see further increases every February and August. This will have an impact on every organisation running a fleet of vehicles, and those operating heavy machinery, unless they take a proactive and innovative approach.
Claiming rebates presents a challenge for mining, construction and other large organisations with complex fleets of vehicles and machinery to manage. A large mining site might be 50 kilometres wide, and a driver might do 300 kilometres moving around the site during any given day, but has also spent two hours just to get there. Those two types of driving attract different levels of rebate. Now multiply that across hundreds, or even thousands, of vehicles and machines. You can't rely on drivers and operators to accurately report this information. With fuel tax on the rise, there's more pressure on businesses than ever before to take a proactive approach, make these calculations and report them back to the Australian Taxation Office.

Fuel rebates also have not historically been claimed as well as they could have been, especially by small business owners who rely on being cost-effective. This is mainly due to how difficult it's been to collect the information you need to provide, such as knowing how many kilometres your fleet has done on road versus off road, or how many engine hours you need to claim a rebate for across every piece of heavy machinery. Many have simply decided it's too hard but this has to change. Commentary from the Australasian Trucking Association notes the latest fuel tax rise will have a greater impact on smaller operators than big organisations. Why wear unnecessary costs when GPS tracking technology can easily provide the data you need to manage them?

Using time and location data, which is generated through a GPS vehicle tracking system provides accurate and immediate access to the information you need when calculating your fuel rebate. Simplicity is the key because business owners are too busy to sit down and collate this information. Of course, claiming a tax rebate is just one benefit of installing this technology. There are also strong commercial outcomes:

Improved operations

With historical data readily available, and a clear view of how vehicles are being used, you can make more informed business decisions and improve asset management. For example, a prime mover uses up to two litres of fuel per kilometre. If you can change a job schedule and save 30 kilometres, that's a quick and easy operational cost saving. This also relates to tyre rotation and managing tyre pressures. When there are 20 tyres on a truck at $350 each, and you're managing a large fleet, the return on investment soon starts adding up.

Increased efficiency

Fuel-burning machinery is used across many different industries. If you have 50 pieces of machinery operating across 15 sites, trying to work out how many hours each one has done is a very labour-intensive process. With the ability to monitor and report engine hours, you can measure fuel burn and claim a rebate. It's also much easier to manage maintenance schedules.

Driver behaviour

Properly managing driver behaviour, including speeding and hard cornering, can significantly reduce fuel wastage and maintenance costs. Poor driver behaviour can cost thousands of dollars a year in fuel burn, speeding tickets and general asset depreciation through excessive wear and tear.

Regulatory compliance

Gaining a better understanding of exactly what's going on inside your fleet means you're better able to manage obligations under the Work Health & Safety Act. There have been a number of high-profile cases recently, with fines of more than $1 million dollars handed down by the courts. As a fleet manager you must do everything in your power to protect your people and your business.