Government doesn't value us, say transport firms

Increases in excise duties and the new carbon tax have made it untenable for many transport firms to continue in business and a significant number in the Cavan, Monaghan region switched off their engines at Christmas and are not resuming business now in the new year. That is the word emanating from a sector that feels hard done by due to the tax burden they're being asked to carry, which they say is making it impossible for them to compete with operators in the UK and continental Europe. Gerry McMahon, a prominent member of the Irish Road Haulage Association from Monaghan, says that within the last 12 months the increase in excise plus the new carbon tax has put an extra 10 cent a litre on the cost of diesel and for an operator like him, with four trucks on the road, this is an extra €250 a week in costs. He can't ask his customers to bear the cost because they're already finding the going difficult and those in the transport business are endeavouring to retain customers rather than drive them away. The road hauliers feel aggrieved that their importance in terms of this being an island nation isn't being adequately factored into overall economic planning by the government. "I don't think there's an understanding from the political end; I know the association have looked for an exemption but it fell on deaf ears. I know a lot of hauliers closed their doors in December and decided that they couldn't take any more," said Mr. McMahon. He says the cost of diesel is making it hard for small transport firms in particular. He's aware of four transport businesses from Monaghan that called it quits before Christmas, with the loss of at least 20 jobs. He re-iterates the point that some form of exemption from tax on fuel is vital for hauliers at this difficult time and until the economy picks up again. Reducing the level of employer PRSI would be another worthwhile gesture, he believes. The increased costs on the transport sector is not just hitting smaller firms. Cavan, Monaghan has some large transport firms such as Virginia Transport and Maguire Transport, Ballinode. Virginia Transport operates 80 trucks and 300 trailers and employs 120 people. A family owned operation founded by the Cole brothers 30 years ago, it is one of the largest transport companies in the country and serves Ireland, the UK and continental Europe. Its trucks clock up more than 20 million kilometres a year. General manager Michael McBride describes companies like Virginia Transport as logistics companies rather than transport or road haulage businesses, terminology he feels is simplistic and doesn't fully take into account the sophisticated nature of the work involved, which includes the transportation and safe delivery of a wide spectrum of temperature controlled products in the food, pharmaceutical and manufacturing fields. "We operate to very high standards of quality control," he points out. Like Gerry McMahon, he says that the increase in excise and the new carbon tax has greatly increased their costs. Mr. McBride is adamant that the implications of the new carbon tax were not fully thought out. "In our business we have to use the roads as a matter of necessity, we have no choice, whereas private road users may have a choice as to whether they use their car or not," Mr. McBride said. Mr. McBride accused the government of deliberately hitting an important indigenous industry. Representations from the logistics sector were ignored and a company such as Virginia Transport was now having to bear an added €300,000 per annum in increased excise duties alone. The new carbon tax was a further equally severe financial burden that had to be carried by logistics companies, he added. "We have had to restructure; staff have had to make sacrifices and suppliers have had to make sacrifices. The government have completely ignored us," said Mr. McBride. Asked what level of lobbying the transport sector engaged in, Mr. McBride confided that he met representatives of the government prior to the budget to impress on them the consequences of a new carbon tax for the sector. The sense of grievance within the road haulage sector does not end with their unhappiness over the tax take in a litre of diesel. Irish road transport firms feel that they are having to compete on an uneven playing field with the rest of Europe in other areas as well. "An articulated truck in Belgium costs €500 a year to tax, the same truck costs £700 in Northern Ireland, while here in this jurisdiction it costs up to €4,000. This is a staggering difference when we are all members of the same EU," he says. He believes that the policy makers at government level do not take into account the implications of policy decisions such as the introduction of a carbon tax and how such a tax impacts on indigenous industry. "It feels as if the policy makers are making us jump more and more hurdles. We seem to be the only sector that the government specifically targeted to increase our costs in 2010," says Mr. McBride.