The association's executive officer, Peter Gaske, said the government's decision to slash the subsidy scheme signaled the "end of an era" and would increase operating costs by between 18 and 25 per cent for small to medium-sized Queensland-based freight companies.

"This represents to a company with 20 employees an increased cost of $100,000 per year apart from significant increases in registration charges (up to $10,000)," Mr Gaske said.

The Premier told Parliament today Queensland taxpayers would no longer have to subsidise interstate motorists who crossed the border into Queensland to take advantage of cheaper petrol.

"It will also save taxpayers more than $2.4 billion over four years as part of our strong plan to regain our Triple-A credit rating and restore the budget surplus," Ms Bligh said.

She said she understood the implications for motorists.

"It is a sacrifice - we are asking Queenslanders to play their part in keeping the building program going and protecting the 119,000 jobs it supports," she said.

However, Mr Gaske said the increased costs of freight would cost jobs elsewhere.

"Passing on increases in such a competitive market will simply not work due to the volume of idle trucking fleet currently unused or under utilised," he said.

"Absorbing the increase costs will lead to further job losses and downsizing of freight operations."