Former board member reveals why governments chose to tread carefully on reforming charging framework.
An aversion to “big bang reform” combined with tough economic conditions have been blamed for governments voting against significant changes to heavy vehicle charges.
The former board member of the now defunct group tasked with developing a new charging system, Norm McIlfatrick, has revealed the reasons behind Australia’s transport ministers’ decision to adopt minimal changes to the status quo.
Among proposals put to ministers, the Heavy Vehicle Charging and Investment (HVCI) group recommended mass-distance-location pricing, which involves fitting trucks with monitoring devices to charge them based on the weight they carry, the distance they travel and the roads they use.
While ministers agreed to the HVCI’s recommendations on improvements to data collection and transparency on road expenditure, they rejected the call to move away from the current system built on registration fees and fuel excise charges.
“We were asking too much of ministers. Their commitment to major economic reform [was] at a time when regulators, in particular the National Heavy Vehicle Regulator (NHVR), were still bedding down,” McIlfatrick says.
“There is no appetite for big bang reform.”
McIlfatrick says the complexity and cost of implementing a new road pricing regime and the lack of industry support for it also influenced ministers’ thinking.
“It’s a very difficult ask, particularly in today’s reliance on fiscal demands that are going forward at a greater rate than the revenues into governments are,” he says.
“There was limited evidence for them to take to Cabinet to seek, particularly, Treasury approval at a time when all governments were facing significant fiscal challenges.”
McIlfatrick adds that proposed transport reforms struggled to compete with big-ticket items for attention from policy makers.
“In reality, the COAG [Council of Australian Governments] agenda was filled with many other things – major national issues, health, disability schemes, education – and I don’t think that transport gets more than five or 10 minutes when those COAG reform councils meet,” he says.
The HVCI shut its doors on June 30 after two years of work on heavy vehicle charging reform.
Transport ministers agreed to begin work on documenting road conditions, improving the collection and use of heavy vehicle road usage data, publishing annual expenditure plans and improving road access for the industry through trial projects.
The recent review of competition policy in Australia recommends road pricing reform, which Federal Government MP Angus Taylor supports.
However, National Transport Commission (NTC) CEO Paul Retter told an industry gathering earlier this year he thought a system like mass-distance-location pricing was up to 10 years away from being introduced.