Road pricing green light as Harper Review is accepted

ATA backs independent Access and Pricing Regulator to control charging decisions

Road pricing green light as Harper Review is accepted
Paul Fletcher expects reforms to allocate road investment more efficiently.


The federal government will press ahead with road pricing reform following its formal acceptance of the Harper Review’s findings.

Canberra will accelerate work with states and territories on heavy vehicle road reform and investigate the benefits, costs and potential next steps of options to introduce cost reflective road pricing for all vehicles.

"The principle of moving towards cost reflective road pricing is an important one – offering the promise over time of roads which flow more freely and better meet the needs of road users," major projects minister Paul Fletcher says of the response to the review of competition policy.

"It is important that road pricing does not involve higher overall charges on road users, as the Harper Review specifically noted – hence its recommendation that any introduction of direct road pricing should be accompanied by reductions of indirect charges and taxes on road users.

Fletcher notes work already underway on road pricing including through the Transport and Infrastructure Council, which is to report to Council of Australian Governments on progress, "including on steps to transition to independent heavy vehicle price regulation by 2017‑18".

The Harper Review had advised that Governments should introduce cost‐reflective road pricing with the aid of new technologies, with pricing subject to independent oversight and revenues used for road construction, maintenance and safety.

To avoid imposing higher overall charges on road users, governments should take a cross jurisdictional approach to road pricing. Indirect charges and taxes on road users should be reduced as direct pricing is introduced.

 Revenue implications for different levels of government should be managed by adjusting Australian Government grants to the states and territories.

"There is still a lot of work to do on understanding what impacts road pricing will have on all users of the road system, and the broader economy," Fletcher says.

The transport ministers’ council will also investigate the benefits, costs and potential next steps of options to introduce cost reflective road pricing for all vehicles, building on the heavy vehicle road reform.

In South Australia, the federal and state governments have already agreed to establish a joint working group to oversee a simulation charge trial that will test the logic, fairness and structure of alternative road user charging.

The trial will go some way towards collecting the necessary data to consider how existing truck revenue can be collected more fairly and invested more efficiently in our transport network.

In Western Australia, the Perth Freight Link will involve distance-based user charging arrangements for trucks, using satellite technology.

The introduction of cost-reflective road pricing must include the establishment of an independent economic regulator to set fair, enforceable prices for road users, Australian Trucking Association (ATA) CEO Christopher Melham says.

"The National Transport Commission (NTC) has acknowledged the existing road charging system routinely overcharges truck and bus operators, because the system underestimates the number of heavy vehicles on the road.

"The NTC recently provided ministers with several recommendations to fix the error and bring charges back in line. But instead of reducing charges, ministers decided to freeze the revenue from the charges at 2015-16 levels for the next two years.

"As a result, truck and bus operators will be overtaxed by more than half a billion dollars by June 2018.

"Establishing an independent economic regulator, such as the Access and Pricing Regulator proposed in the Harper Review, would help ensure that governments could not ignore pricing decisions like this in the future."

In the response, the Australian Government has said it was willing to consider resuming competition policy payments to the states and territories.

"The ATA strongly supports the resumption of competition policy payments, which should provide state and territory governments with incentives for road pricing reforms that increase industry productivity," Melham says.

The ATA also welcomed the commitment that road pricing reform would not involve higher overall charges on road users.

"However, these reforms to road pricing must not involve increased compliance costs for trucking operators, such as requiring small businesses to fit expensive satellite tracking systems," Melham says.

"Instead, the reforms must include generally lower compliance costs and smoother cashflow as core objectives."

The federal government’s full response to the Harper Review can be found here.

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