Trucking industry raises concern over road tax process

The Heavy Vehicle Charging and Investment reform (HVCI) project has started its consultation process releasing a ‘preparation’ paper for focus group discussions. <br /><br /> The paper has been circulated to industry bodies and local government but has not been released publically.

Trucking industry raises concern over road tax process
Industry concern over road tax process
By Rob McKay | August 31, 2012

The Heavy Vehicle Charging and Investment reform (HVCI) project has started its consultation process releasing a ‘preparation’ paper for focus group discussions.

The paper has been circulated to industry bodies and local government but has not been released publically.

The HVCI is the new name for the COAG Road Reform Plan (CRRP) and the paper follows CRRP’s COAG Reform Plan feasibility study report released last November.

Its board has recently confirmed former National Transport Commission (NTC)
Chief Policy Officer Meena Naidu
as Project Director having held and acted unofficially in the role since March.

The paper presents what is described as a "high-level framework" that seeks to "provide increased road funding certainty as well as promoting efficiency of investment and access within the limitations of a partial market reform".

"The aim of the proposed system is that heavy vehicle related investments should be funded from revenue received from heavy vehicle user charges" which "needs to be allocated to road providers for road spending," the paper says.

"Investment in the road network could also be through private financing, which could be serviced through heavy vehicle charges."

Road charging remains a controversial topic in the industry and the HVCI Reform Board’s interim independent Chair Dr Lynne Williams earlier this month acknowledged that "moving to a new heavy vehicle charging and road investment regime will require a shared commitment to reform".

"Ultimately, reform options must address the practical and commercial realities that affect all stakeholders. I urge the heavy vehicle industry, business community and governments to get involved as the project develops a plan for reform that considers the needs of the road freight transport sector now and in the future," Williams says.

"This potentially game-changing reform is an opportunity to lay the groundwork for road provision to be treated as a service that is responsive to the needs of business and the community," Williams says.

"The HVCI will build on the findings of the feasibility study, which concluded that reform is viable if user charges are directly linked to the provision of roads for heavy vehicles.

"This year, the HVCI Reform Board will oversee the development of an integrated charging, funding and investment framework and will identify what processes are needed to successfully implement proposed reforms. This work will form part of the input to a regulatory impact statement (RIS) to be released for public comment in 2013.

"Over the next 18 months, we will be rethinking how road services for our freight industry are provided, including their funding and pricing arrangements. This requires cooperation from all levels of government."

However, while not addressing the consultation paper directly, industry lobbies still have difficulties with the thrust and focus of the CRRP/HVCI reform process.

"None of the analysis that has been done so far addresses the compliance cost to operators of these schemes," Australian Trucking Association Government Relations Manager Bill McKinley says.

"All of the costing and modelling they’ve done is to the cost to governments of running the scheme. They haven’t actually looked at the cost to operators of maintaining their internal management controls.

"It’s all very well saying we will put GPS units on every truck and there will be a billing function - and they have costed in the filling function now – but they are not looking at the compliance costs beyond the cost of the units. Operators are naturally going to have to put in management systems so they know the bill they are getting is right."

At least as important for the ATA is the complexity of the proposed options, which goes against the tax-reform direction of the rest of the tax system.

"They don’t recognise the importance of simplicity in tax reform, whereas , in reality, it is totally essential," McKinley says, adding that reform of road funding through states is where the major savings were to be made.

The Australia Livestock and Rural Transporters Association (ALRTA) is also exercised by the charging reform’s focus on government road management.

It would prefer the NTC’s advice on charging more for using bad roads be dismissed and is seeking a customer service guarantee from local government.

"We also welcome the decision of governments to appoint an independent chair to head the reconstituted project, which is something that ALRTA had asked for," Executive Director Philip Halton says.

"We welcome the initial steps which governments have also taken to broaden and redirect the scope of the project, which is being signalled by a change to the project’s name to HVCI."

However, the ALRTA has issues with the make-up of the HVCI board.

"There are no independent people with a business background on the new board, whether that be from the transport industry or, even more important, from the broader business community," Halton says.

"There is no independent person with knowledge of rural and regional Australia. Instead, the new project is being managed by a board that comprises senior officials from several road, transport and infrastructure agencies, together with senior officials from several state treasuries."

Halton says the make-up of the board will not help improve industry confidence in the project. He says former CRRP Chair Gary Liddle worked hard to bridge the gap between government and industry on charging reforms.

"A huge expectation now falls upon the new independent chair to continue to improve that engagement," he says.

"This project will not succeed unless both sides are able to treat each other with trust and respect and demonstrate an ability to engage with what each side really needs. Above all, the independent chair needs to establish personal credibility in handling the truly hard issues that frighten and frustrate people on both sides of this project."

The ALRTA has also written to Prime Minister Julia Gillard about its concerns.

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