Australian industry conditions declined materially in March, with the Australian Industry Index falling 19.9 points to -23.6, the steepest monthly fall since the initial pandemic phase of early 2020. Uncertainty was the main factor, with 30% of businesses reporting volatility in fuel prices, freight and supply arrangements. More than a quarter said rising costs were a major pressure across fuel, freight, raw materials, resins, plastics and packaging.

Construction, and civil in particular, is the most reliant Australian industry on diesel, contributing 79% of our energy. Civil Contractors Federation Australia has spoken to governments and national and state media about the rise in costs and the contract flexibility needed to work through the energy shock. Minimising price rises in maintenance and replacement costs of civil infrastructure requires the government working closely with the civil sector in the period ahead.

Diesel hit $3 a litre last week. We've got lump sum contracts locked in, purchase orders issued, and now suppliers are adding fuel levies or pushing back on supply unless prices move. Every path from here costs someone money that wasn't in the original deal.

For regional and civil contractors, the compounding effect is the biggest concern: fuel costs hit transport first, then materials, then every other input. There is no way to swap diesel out. It is what moves everything.

In recent weeks we have engaged with our supply chain, consultants and subcontractors to understand the real cost impact hitting active and pipeline projects. The picture is not uniform, but the direction is consistent, and the pace is faster than anything we saw coming out of COVID.

A national reef operator in Far North Queensland will see fuel expenses increase by $1 million dollars from February to end of financial year in June. Fuel shortages and fuel costs are impacting farmers, the tourism industry, and regional communities and small business owners. One in seven people in Far North Queensland are employed by tourism.

Australia imports roughly 90 per cent of its oil, and the country's refinery count has fallen from eight to just two. The shift has left Australia increasingly exposed to global energy shocks. Energy Minister Chris Bowen confirmed six oil shipments bound for Australia in April were turned back or deferred due to escalating tensions. The government has alluded to a "national crisis."

$9 per litre diesel by July? Sounds ridiculous until you actually run the numbers. Australia runs on diesel. We've got 20 to 26 days of supply. We import 90%, refined in Asia, but the supply chain runs through the Middle East for around 48%. We are at the very end of that chain. With flows constrained at 25%, that is where pricing breaks. With flows stalled, you are looking at a 60-plus per cent shortfall, and fast. That is not expensive fuel anymore. That is access. Industries start to slow, or stop.

The current fuel security issue was entirely predictable and, in fact, comprehensively predicted. No recent Australian government can say it was not warned. The "fair-weather" approach that plagues Australia's fuel security could not contrast more starkly with the concerted action directed towards critical minerals. The 2014-15 senate inquiry into Australia's transport energy resilience examined the very issues in which the country is currently mired.

The ATO has launched temporary repayment plans for businesses struggling with surging fuel costs, and will limit compliance actions in the hardest-hit industries. Through the plan, eligible taxpayers can lock in three-year payment commitments, with equal monthly instalments and no upfront payment. The ATO's shift reverses a course of increasingly stern compliance measures that had been in place since the end of COVID-19 restrictions.

The ATO recognises that high fuel costs are affecting some businesses and will provide targeted support to eligible businesses unable to meet their payment obligations for three months, until 30 June 2026. This includes streamlined access to more flexible payment plan arrangements, including longer payment terms, no upfront payment, and access to general interest charge remission. If high fuel costs are affecting your business's ability to meet tax payment obligations and you are having difficulty getting working capital financing from your bank, please let us know.

From 1 April to 30 June 2026, the fuel excise tax has been cut in half, from 52.6 cents per litre down to 26.3 cents per litre. The Heavy Vehicle Road User Charge, previously 32.4 cents per litre, has also been dropped to zero for the same three-month period. Fuel tax credit rates for heavy vehicles on public roads are now 20.2 cents per litre, and for other business use off-road, 52.6 cents per litre. When the relief ends on 30 June, prices jump straight back up if the conflict has not been resolved.

We can't control the war in the Middle East. We can't stop the war in the Middle East, but what a responsible government can do is do everything it can to shield its citizens and to shield small businesses. The ATO has agreed to provide temporary relief for businesses unable to meet their tax obligations due to fuel supply issues, including more generous payment plans, remission of interest and penalties, and support in PAYG instalments where there's been a downturn in tax income.