Rural retailers brace for up to 350pc freight cost increases

The Queensland government cut the Regional Freight Transport Service Contract subsidy to businesses in a number of rural communities at the start of April, increasing freight costs in places from $60 to $180 per pallet, and the future of the subsidy overall is uncertain.

The communities where the subsidy cut in April is being felt are Barcaldine, Cloncurry, Dirranbandi, Hughenden, Julia Creek, Longreach, Mt Isa, Roma, Winton, Dalby and Tara.

In a number of those places, the local shop is the only grocery outlet in the community.

The latest subsidy loss follows similar cuts in May 2021 to shops in Surat, Wandoan, Taroom, Theodore, Moura and Biloela.

Stores at Charleville, Cunnamulla, Thargomindah, Mitchell, Morven, Quilpie and St George have had the subsidy extended to June 30 this year, but the freight rates after that are uncertain.

The changes being made to the subsidy were revealed by the Supermarket Pricing Select Committee's report into supermarket pricing, tabled last Friday in parliament.

Warrego MP Ann Leahy, a member of the committee, said the inquiry had exposed the Miles government subsidy cuts as the cause of increased supermarket prices in a number of regional communities.

"It just shows how out of touch the Labor state government is when it doesn't understand that some supermarket price increases are as a result of its cutbacks to the regional freight subsidy," she said. "The cut during a cost of living crisis is just absurd."

Ms Leahy described it as a politically motivated cutback that showed the government didn't care about regional supermarket prices, competition or people.

"Each of the communities where the cuts have occurred are either in LNP-held electorates or cross-benchers," she said.

A Transport and Main Roads spokesperson said the independent review of freight funding arrangements identified a need to refocus future statewide freight funding assistance, and seeks to reduce freight-related cost of living pressures in highly disadvantaged communities in the Northern Peninsula, Torres Strait and Gulf, and in south west and central west Queensland regions.

They said a new approach across Queensland provides freight funding assistance in a number of different ways, including road, rail and direct checkout subsidies, and procurement processes were underway to assist with freight-related cost of living pressures along the Warrego Highway and Balonne Highway supply chains beyond June 30.

Linfox is currently contracted to provide subsidised road freight services in far south west Queensland until the end of June 2024.

"Procurement processes are underway to assist with freight-related cost of living pressures in far south west Queensland along the Warrego Highway and Balonne Highway supply chains beyond that time," they said.

"In the central west, several local government areas will continue to receive subsidised rail freight services to reduce freight-related cost of living pressures.

"Ongoing rail freight assistance will be provided for goods delivered from Rockhampton to Emerald, Alpha, Barcaldine, Longreach and Winton.

"Freight customers in competitive freight markets with a choice of providers are encouraged to contact the various service providers in their region to discuss the available options and select the option that best suits their needs and budget."

The spokesperson said TMR would continue to monitor any impacts of the changed freight subsidy approach, and recommendations would be provided into the future on further reform, if required.

Ms Leahy said this showed the government hadn't been listening to the evidence gathered during the supermarket inquiry.

"They're saying this is the status quo, without saying what they'll cut back," she said.

"We still don't know what the freight rates will be after the end of June.

"It's been made quite clear through the inquiry that the withdrawal of the subsidy will increase supermarket prices for rural people.

"I call on the government to reinstate the full regional freight subsidy post June 30 to all communities it is currently extended to, and to reinstate the subsidy to those who have been cut in May 2021 and April 2024."