ACCC pitches road pricing reform as vital for economy

By: Brad Gardner


ACCC boss says road users should be billed individually based on road construction, maintenance and safety costs.

ACCC pitches road pricing reform as vital for economy
Australian Competition and Consumer Commission (ACCC) chairman Rod Sims.

 

Australia’s competition regulator says an overhaul of road user charges is "fundamental" to the economy and will not lead to higher charges overall.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims used his address to an Australian Food and Grocery Council forum to declare support for a recent draft report from a review of the country’s competition policy, particularly its recommendations on road pricing.

The review recommends a user-pays principle —or "cost-reflective pricing" — should replace existing charges so drivers are billed individually based on a range of factors including location, time of travel, congestion, and road construction, maintenance and safety costs.

"On road infrastructure provision and pricing, we support the panel’s recommendation on introducing cost-reflective road pricing that is linked to road construction, maintenance and safety," Sims says.

"Importantly this can be done without road users paying more overall. The Productivity Commission has found that revenues derived from motorists from all sources are about the same as total expenditure on roads by all governments. More effective road user charges can be offset by lower fuel taxes which currently account for one quarter of fuel prices."

The review says money raised should be directly funnelled back into road projects, a move Sims says will lead to investment decisions being more responsive to the needs of drivers.

"This would see particular road bottlenecks addressed much more effectively than they are today," he says, adding that "the reforms are fundamental to our economy".

The ACCC has previously spoken out in favour of road pricing reform.

There has been work on the issue for some time, with policy makers focusing on heavy vehicles.

One option involves billing trucks based on mass, distance and location, while industry has advocated fuel-based charging so those trucks that travel further pay higher fees.

The Federal Government is due to receive a final report on a review of competition policy later this year.

However, one government backbencher has already declared his support for road pricing reform.

MP Angus Taylor says a new charging framework should be applied to heavy vehicles and then eventually extended to cover all road users.

"These changes will not and should not happen overnight or in one hit. We should start with heavy vehicles on targeted roads, and I am confident that we will see that from some states in the very near future," he says.

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