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Inquiry asks drivers to pay for road trips

Dig deep: The Productivity Commission has recommended that any money raised from charging road users be set aside for spending on road infrastructure.

Productivity Commission urges user charges to be set aside for roads

15 Jul 2014

MOTORISTS should have to dig into their hip pocket for every kilometre they travel on our roads, a recommendation to the federal government has suggested.

In a report tabled in federal parliament yesterday looking at how government can reduce the cost of building and maintaining public infrastructure, the Productivity Commission – which earlier this year recommended the public purse be closed to car-makers – has called for research into the development of smarter in-car technology that can log where drivers go in an effort to charge them by the kilometre travelled.

“Governments should undertake pilot technical studies of (revenue-neutral) direct road user charging for cars and light vehicles using vehicle telematics and extend tolling across existing road networks as it becomes practical and cost-effective to do so,” the two-part report reads.

“The application of charging mechanisms created by rapidly-changing communications technology appears promising.

“Importantly, these trials would introduce direct user charges as a substitute for other taxes, such as the fuel excise.”

The report recommends that instead of the federal government feeding funds raised by road-related charges such as the fuel excise into general revenue, it should be fed into a separate pool of money specifically earmarked for improving roads.

It goes further, suggesting that road-making funds be distributed to individual states and territories, and clusters of local government, to manage where the money should be spent.

A submission to the PC inquiry from the Australian Automobile Association, which represents a number of state-based motoring interest groups, warned that any attempt to charge drivers a rolling rate for road use needed to be a “methodical, open and transparent process”.

“To win the support of motorists, it will be critical that the case for change is clearly laid out and the benefits of reform are properly explained,” the AAA said.

“Road users will be more likely to accept direct user charging if they see tangible results through better infrastructure and improved congestion and safety outcomes.”

Coalition treasurer Joe Hockey asked the PC to review public infrastructure in November last year shortly after the coalition government was elected, with terms of reference that included identifying ways to reduce infrastructure costs and address barriers to private sector financing.

“The majority of reforms recommended by the commission relate directly to state and territory governments, so the Australian government will now consult with them over the next few months before it releases its response,” Mr Hockey said in a statement released yesterday.

The statement said assistant minister for infrastructure and regional development Jamie Briggs would lead discussions with the states and territories “to drive further reforms to improve infrastructure planning, funding and delivery”.

Toyota Australia, which is responsible for almost two in every five new-car sales made here, declined to comment on the report or its potential impact on showrooms if the per-kilometre charge was introduced.

“(We) will leave it to the government to comment on,” corporate affairs media and external affairs manager Beck Angel said.

Holden, meanwhile, said any proposal to tie road charges in with use would be unfair on Australian motorists who already paid for roads through a range of other taxes, including the fuel excise and tolls on some roads.

"It would unfairly punish people living in rural and regional Australia and the outer suburbs of capital cities, where public transport options are not as prevalent," Holden executive director of corporate affairs George Svigos said.

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