NatRoad backs fuel charging, but bureaucrats push direct

Date: 17.08.2009

<font color=red><b>PRICING DEBATE:</b></font> Industry support for fuel-based tax, but rail and bureaucrats want GPS mass/distance scheme

The trucking industry has thrown its support behind a plan to tax operators on fuel use alone, facing off against the rail sector and the federal transport regulator both pushing for a GPS-based road pricing model.

As reported by ATN on Friday, the Australian Trucking Association (ATA) is drafting a proposal for a fuel-based regime that would hike the amount operators pay in diesel excise balanced by a significant cut in registration fees.

The plan is to be submitted to Treasury Secretary Ken Henry’s review into Australia’s tax arrangements.

NatRoad says it will support the campaign, arguing an all-encompassing fuel charge, similar to the flat-rate GST, would be a consistent and transparent means for governments to recover costs.

"Complex equations may serve to satisfy some that an accurate outcome has been achieved, but the logic applied usually has to be abandoned at some point," says NatRoad Deputy CEO Duncan Bremner, highlighting the "disproportionate" charge on A-trailers as an example.

"Some may argue that fuel consumption is not a true reflection of road use due to factors such as mass, but few methods come any more fair or equitable as a straight fuel charge, as well as providing the outcome of efficiency."

Bremner calls on members and the trucking industry as a whole to support the reform.

"Any system such as the current one, which has to deal with such a bewildering array of changes as previously outlined, simply isn’t good enough and only serves to add unnecessary burden on your business and our industry," he says.

The ATA argues a mass/distance scheme – which will directly charge operators based on travel kilometres and mass carried – will be too complex and expensive for the industry.

But governments are pushing ahead with a trial of the systems needed, with the National Transport Commission (NTC) urging Henry to be mindful of the plan.

"The…review should prepare the tax system for a world in which road user charges in the medium term are no longer recovered through registration and fuel revenues and are based on mass/distance location-based changes," the NTC writes in its submission to the tax review.

"This new world would also involve charging revenue being more closely linked to road expenditure, which could be achieved by revenue being directly allocated to the road infrastructure service provider."

The NTC also argues the tax review should consider the introduction of a reform process for "light vehicle" charging based on the truck pricing reform agenda.

The rail sector is supporting the move to direct charging for all vehicles, arguing the current scheme is no longer sustainable.

Australian Railways Association (ARA) NEO Bryan Nye says as road congestion doubles over the next 15 years, costing up to $30 billion dollars annually, public funds used to support the system will dry up.

"The way drivers pay for roads is long overdue for change," he says.

"Pricing which links road use and damage to the actual costs that users pay is an essential tool in managing our roads."

Nye says other countries have implemented similar measures with relative success and says failure to change the laws will hurt more than just roads.

"Modern road pricing is now readily available and can be appropriately applied to Australia," he says.

"If road pricing reform does not occur, Australian businesses, communities and the natural environment will suffer."

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