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Direct charging for road users a must, competition review says

Review of Australia’s competition policy outlines path toward new charging system for trucks.


Vehicles in Australia should be directly charged for using the road network, a review of the country’s competition policy framework says.

Professor Ian Harper’s final report on his examination of Australia’s competition laws, released yesterday, implores governments to prioritise the implementation of “cost-reflective pricing”.

If introduced, the scheme will charge an individual vehicle based on the roads it uses, the time it travels and the level of congestion. 

Harper says the existing approach that relies on general revenue-raising taxes such as fuel excise, registration and licence fees does not reflect the actual cost a vehicle imposes on the road network or provide information on where investment is most needed.

“Governments should introduce cost-reflective road pricing with the aid of new technologies, with pricing subject to independent oversight and revenues used for road construction, maintenance and safety,” the review says.

“Technologies are available that allow for more widespread application of cost-reflective pricing in roads, taking into account location, time and congestion.”

Harper’s recommendation is similar to the one in former Treasury boss Ken Henry’s tax review, which supports congestion charging and mass-distance-location pricing for trucks.

A direct-charging proposal was also flagged by the now disbanded Heavy Vehicle Charging and Investment (HVCI) group, which recommended using in-vehicle devices to charge trucks based on their weight, the distance they travelled and the roads they used.

Harper charts a path he says governments should follow to implement his proposed charging regime.

He says pilots and trials should be established within one year of governments agreeing to the recommendations in the review and that existing taxes should be reduced as direct charging takes effect.

“Importantly, direct road pricing need not lead to a higher overall financial burden on motorists since existing indirect taxes should be reduced as direct charging is introduced,” the review says.

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