EXCLUSIVE: Industry pushes for fuel-based road charging, with hike in diesel excise balanced with big rego cut
By Jason Whittaker | August 14, 2009
The trucking lobby will push for a fuel-based road charging regime as part of a review into tax regulations, advocating a hike in diesel excise balanced with a significant cut in registration fees.
As a plan to introduce a user-pays road tax hits the headlines, ATN has learned trucking groups will line up behind the Australian Trucking Association (ATA) in support of a fuel-based model in opposition to mass/distance charging.
The ATA has developed a policy in-house for consideration by a wholesale review into tax regulations by Treasury Secretary Ken Henry.
It argues road pricing is a tax issue and should be included in the review, separate from the mass/distance charging model given preliminary support by governments.
Transport ministers agreed to explore mass/distance charging – which would put a GPS transponder in every heavy vehicle measuring road use and load carried – with the Council of Australian Governments signing off on a timetable to test and implement the scheme.
But state governments are yet to test the scheme, according to the ATA which argues mass/distance charging is too complex and expensive for transport operators.
ATA spokesperson Bill McKinley has briefed ATN on the policy, which will effectively collect tax charges through a higher diesel excise combined with state-collected registration fees reset to “much lower levels”.
Its document will argue fuel charges more accurately reflect road use than the current split fuel/rego model, and is a simpler reform than a “big, expensive, cumbersome change” in mass/distance charging.
“Our proposal recognises that one of the key problems with mass/distance pricing is it is too complicated,” says McKinley.
“Our proposal is a simple evolution of the existing system based on one of the most important principals of tax reform – it makes them easier to collect.”
Also, he says in-truck sensors and monitoring equipment could come at too high a cost for operators.
The proposal will put much more money into the Federal Government pot, which McKinley says is appropriate with the move to a nationalised system of truck regulation.
Under the proposal, other jurisdictions will be able to draw on this fund for infrastructure improvement. That will include local councils, which currently do not have a direct revenue stream from the trucking industry.
“None of the models that are supposed to address this actually do anything about it,” McKinley says of the ‘last mile’ council-controlled infrastructure issues.
‘INCREMENTAL PRICING’ PLAN
The issue of road user charges has been thrown on the table by a consultancy report sent to the Henry review, which argues for GPS monitoring and direct distance charging for all vehicles, including motorists.
The paper says direct charging can be used as a mechanism to control road congestion and vehicle emissions, arguing an ‘incremental pricing’ system for trucks would allow road access on some routes for an additional fee.
“This can be an effective interim move prior to more comprehensive reform,” the paper argues, which made front-page headlines this week and drew rebukes from the Opposition and the Transport Workers Union (TWU).
“Levying effective user charges on heavy vehicles around Australia and levying appropriate congestion and damage charges on all vehicles in urban areas provides information that will encourage the construction of roads that optimise economic rather than pure engineering advantage,” the paper says.
“…Given that heavy vehicles already pay their way, the efficiency dividend from better overall pricing of freight can and should be returned in part to heavy vehicle operators.”
A spokesperson for Treasurer Wayne Swan is quick to point out the proposal is not from the Government but one of many submitted to the Henry review.
Prime Minister Kevin Rudd has told radio today the issue of a user-pays road use system would be “a matter of massive controversy” but any reform idea should be debated.
“If the academics are putting that forward in the context of Henry, then let the debate ensue,” Rudd told Melbourne station 3AW.
McKinley welcomes the acknowledgement in the paper that the industry currently pays its way, but says the ATA will argue strongly for the Government to reject any form of mass/distance charging.
Its policy is in the final stage of consultancy before being released publicly and submitted to the tax review.
McKinley says the ATA has already briefed the National Transport Commission and the Federal Government on its proposals.
“In our discussions people recognise the idea is to make it as simple as possible,” he says.
TWU National Secretary Tony Sheldon says the Federal Government should reject any hike in truck charges until after a system of ‘safe rates’ is introduced for sub-contractors and owner-drivers.
Deputy Prime Minister Julia Gillard has committed to a scheme of legislated minimum freight rates, with a proposal currently being drafted by her office.
“The Federal Government is currently working within the industry to put in place a system of payments where drivers can receive full cost recovery, including waiting times and fluctuating fuel prices,” Sheldon says.
“This proposal is not a user-pays system. The fact that we pay excise on every litre of fuel we buy at the moment means the user is paying for their road use. It is short-sighted to think another tax on drivers will see anything change.”