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User charges could pay for roads
User pays: A report from Infrastructure Australia is recommending road-user charging.
Infrastructure Australia calls for inquiry into introduction of road-user charging
17 February 2016
INFRASTRUCTURE Australia has become the latest body to call on the government
to institute an inquiry into the introduction of road-user charges to pay for
road building and maintenance.
It has also called for the full implementation of road-user charging for heavy
vehicles within five years and within 10 years for light vehicles.
The independent statutory authority has echoed the calls from the Productivity
Commission, the Australian Competition and Consumer Commission and Intelligent
Transport Systems-Australia to replace the current piece-meal system of road
In a wide-ranging report that examines many areas of the economy where
infrastructure is required, Infrastructure Australia chairman Mark Birrell said
the funding of roads needed to be reformed so that users carried a fairer share
of the burden.
“The Australian Government should initiate
a public inquiry, to be led by a
body like the Productivity Commission or Infrastructure Australia, into the
existing funding framework for roads and development of a road user charging
reform pathway,” Mr Birrell says in the Australian Infrastructure Plan released
The inquiry would look at the fairness, financial sustainability and economic
efficiency of road funding.
Mr Birrell said it should also consider what would be the optimal system of
charging for road use, what the impacts would be of changing from the current
system and what a detailed reform pathway would look like.
He said that, while heavy vehicles have been paying for road use since 1992
through the PayGo system, new technology was making it easier to calculate the
full impact trucks have on the road network.
“Technology to support heavy vehicle charging has been used in parts of Europe
and in New Zealand for some time,” Mr Birrell says.
“Low-cost in-vehicle transponders and satellite tracking are increasingly being
used to open up parts of Australia’s road network to suitably-specified trucks.
Productivity improvements of up to 100 per cent are being realised, and
associated reductions in fuel use are cutting emissions.
“By 2014, the technology had already been installed in 25,000 trucks, a 65 per
cent increase from two years earlier.”
The call for a closer examination of road user charging was applauded by the
nation’s motoring clubs through the Australian Automobile Association, and also
by the Rail Manufacturing Co-operative Research centre.
“The AAA strongly supports Infrastructure Australia’s call for a public enquiry
into road funding reform and how we can replace current taxes with a fairer
road user pricing mechanism,” said AAA chief executive Michael Bradley.
“Australian motorists currently pay close to $28 billion in taxes and charges
every year, however the allocation of funding into road, rail and public
transport infrastructure needed across Australia remains ad hoc, unfair and
lacking in transparency,” Mr Bradley said.
The Rail Manufacturing Co-operative Research Centre pointed out that the
Infrastructure Australia Plan highlighted the fact that funding reform of the
transport sector was the most significant infrastructure challenge facing the
RMCRC chief executive Stuart Thompson backed the call to commit to the
implementation of a heavy vehicle road charging system within five years.
“Such a move would not only level the playing field between road and rail, but
it would also be a source of much-needed funding to meet Australia’s urgent
infrastructure challenges,” Mr Thompson said.
“Australia’s current system of cost recovery in the transport sector has
stymied the rail industry for decades.
“With the current renaissance in urban light rail projects and a strong
pipeline of rolling stock orders either being delivered or awaiting tender
outcomes, with the right policy settings the rail manufacturing industry in
Australia has the potential to grow to meet the challenges of Australia’s
future transport needs.”
Mr Thompson said under-recovery of road maintenance and building costs from
heavy transport meant that trucks were receiving an advantage over rail, which
received no hidden subsidies.
He said the forecast 80 per cent growth in the national freight task between
2011 and 2031 meant that much more needed to be done to achieve competitive
neutrality between road and rail.
He said it was in the national interest to replace some truck haulage with rail.
“One freight train can carry 280 heavy vehicles and the average passenger train
can take 525 cars off the road.
“Rail is also the safest form of land transport and, with the high growth in
the projected number of heavy vehicles on our roads, this is an important
consideration.” Mr Thompson said.