Range of responses to SA road pricing offer

ATA wants reform to start with government while ALC and CCF say new funding approach is crucial

Range of responses to SA road pricing offer
Bill McKinley says state governments need to take action by freezing their truck registration charges.


Responses to South Australian premier Jay Weatherill’s mass, distance, location (MDL) pricing initiative has spanned the heat range, from the warm welcome to distinctly cool counter argument.

At the lower end of the temperature scale, the Australian Trucking Association (ATA) stuck to its long-held position that government must reform its own approach before tapping the industry for changes.

The trial would need to be run by the Federal Government, because it would involve changes to the fuel tax paid by trucking operators," ATA national manager government relations and policy Bill McKinley says.

"Under this system, every truck would be fitted with a special GPS tracker.

"Trucking operators would be charged according to where their trucks went, how far their trucks travelled, and some measure of how much they weighed.

"Before switching to a new charging system, governments need to fix the current one.

"The existing charging system – a combination of fuel and registration charges – overcharges the truck and bus industries by about $100 million per year because it underestimates the number of heavy vehicles on the roads by 52,000 vehicles.

"As a result, the calculated charge on each vehicle is too high, as is the total amount collected.

"The Federal Government has done its part to address this problem by freezing truck fuel charges.

"The state governments need to take action by freezing their truck registration charges as well.

"Governments also have a lot of work to do on the basics of getting road planning and spending right.

"The idea of direct road user pricing is that you would run the road system like a utility.

"But to do that, governments would need to:

  • improve road planning and decision making, with asset registers so governments know what roads they own and agreed service levels so the industry knows what it is paying for
  • establish stable forward expenditure plans, so it would be possible to calculate what prices should be
  • make sure that all the money paid by road users went back into roads
  • set up an independent economic regulator to approve charging proposals, in the same way the Essential Services Commission of South Australia (ESCOSA) sets retail water prices.

 "Only then would it be feasible to talk about the last step, which would be a direct road user pricing system."

Somewhat less chilly was the Australian Logistics Council (ALC), which backed road reform being examined as promised at the upcoming Premier’s Retreat in the hope of ending arbitrary and inefficient spending. 

"Premier Weatherill’s proposal to establish a more transparent pricing mechanism to more closely link road charges with road investment is an important step in the debate and worthy of consideration by all levels of government," ALC managing director Michael Kilgariff says.

"There is growing consensus that the current system of vehicle charging and investment needs to be put under the microscope, and the Premier’s retreat is an ideal place to discuss this issue further."

In a message often reiterated to political leaders, he calls for funds collected to "be invested in the infrastructure used by the vehicle, i.e. the revenue ‘follows the freight’, and not diverted into consolidated revenue for use for other purposes.

"Payments made to a road owner in the form of a CSO payment also need to be transparent."

Distinctly warm was the appraisal of the Civil Contractors Federation (CCF), which has urged the SA government to consider alternative ways of paying for road construction and maintenance.

Backing the ‘asset recycling’ concept, CCF CEO Phil Sutherland says there is no doubt that the traditional method of funding road infrastructure and maintenance has run its course.  

"Unless alternative funding models can be identified, it is hard to see how road projects beyond those that have been announced can be advanced," Sutherland says.

"It’s great to see the premier go on the front foot with this, and it is of comfort to know that if government now gets that microeconomic reform of roads in South Australia, it can be a catalyst for national reform. 

 "Investing in roads is state and nation building and will generate work for a beleaguered civil construction sector and create jobs beyond the sector.

"It will also trigger the economic multiplier effect through a number of sectors including the demand for road building materials. Investing in roads makes good economic sense. It’s a no brainer."

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