'Turn the whole system upside down' on road charges

Leading transport academic involved in road pricing reform says variable charging has support and congestion tax must cover entire network

'Turn the whole system upside down' on road charges
'Turn the whole system upside down' on road charges
By Brad Gardner | September 30, 2010

A leading transport academic involved in road pricing reform says "we’ve got to turn the whole system upside down" on truck charges.

Professor David Hensher says the existing scheme built on registration and fuel charges is unfair because all trucking operators are paying a fixed fee regardless of the distance their vehicles travel.

Hensher, who is the Director of the Institute of Transport and Logistics at the University of Sydney, says those working in congested environments are paying less than they should while those operating on non-congested routes are paying too much.

"There’s a general view that we’ve got to turn the whole system upside down and move towards variable charging, but we’ve got to do it responsibly and sensibly," he says.

Hensher is working with the National Transport Commission on developing a new model for charging trucks, which he says had broad support among decision makers at a recent road pricing conference in Sydney.

"The COAG [Council of Australian Governments] types and all those people were there. They were deadly, seriously committed to reviewing the whole issue to do with the charging regime on trucks," he says.

The Australian Trucking Association advocates a two-tier fuel charging scheme over concerns a mass-distance-location charge using GPS tracking and itemised bills will be too complex and expensive.

Under the ATA’s scheme, two-axle rigids will be charged less than three-axle rigids and articulated vehicles. The difference is meant to take into account the impact heavier trucks have on the road network.

Hensher says it is too early for him to make a judgement on mass-distance-location charging, but he suggests why there is concern about it.

"I think there is a fear of the unknown at the moment because nobody really knows what this is going to look like when it comes to the actual costs," he says.

But supporters of fuel-based scheme might struggle to gain support. Hensher says there is a movement away from reliance on fuel because it is an inefficient charging method.

"A fuel cost method is a good approximation – that’s the best way of putting it – but is it fair because in fact some types of vehicles are possibly paying more than others and are being cross-subsidised," Hensher says.

However, he adds that any new scheme needs to be revenue neutral when introduced so it can be sold to the industry.

As the NTC investigates five possible charging methods, Hensher has supported comments made by Treasury Secretary Ken Henry that a fuel tax is incapable of addressing the spillover costs of trucks.

"…the costs of urban congestion (which vary according to location and time of day) as well as the costs of road-wear caused by heavy vehicles (which vary according to the mass, distance and location of travel) cannot be efficiently priced through a fuel tax," Henry wrote in his recent tax review.

Henry also supported the introduction of a variable congestion charge that varied depending on traffic levels and time of day.

Hensher says it is a "no-brainer" that any congestion tax must be applied to the whole road network.

"Once you start putting it on bits of the network it’s going to be a disaster because there are a lot of negative implications because people will switch to the free bit. That will become clogged," he says.

"You’ve only got to look at what’s happening in Brisbane right now with the tolls. You can go and get a photo of an empty toll road and a clogged free road."

The Clem7 toll tunnel in Brisbane has struggled to attract motorists, with the operator warning it might go broke within a year if traffic levels do not improve.

"Charging bits of the road, and I’ve said this for years, is mad. Charge the network as a whole otherwise you’ll never get the benefits of all roads," Hensher says.

Under mass-distance-location pricing, trucking operators will be charged based on the weight of the truck, the distance it travels and the roads its travel on.

A subgroup of COAG is due to report on the feasibility of mass-distance-location pricing late next year.

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