PC report welcome injection of common sense, ALC says

First five-year productivity review in line with ALC’s recommendations, Kilgariff states

PC report welcome injection of common sense, ALC says
Kilgariff once again highlights the need for the development of the National Freight and Supply Chain Strategy.


The Productivity Commission review report offers a common sense approach to the national conversation about transport and urban planning policies, the Australian Logistics Council (ALC) says.

The report, Shifting the Dial: 5 year productivity review, looks across the landscape of factors and influences that may affect Australia's economic performance over the medium term, in order to offer recommendations for future priorities to improve national welfare.

ALC MD Michael Kilgariff says many of the recommendations made in the report align with ALC’s long-standing policy positions, including improved alignment between transport industry demands and infrastructure spending, public cost-benefit analysis of infrastructure proposals, and introduction of regional road user charging programs.

"The message in this report is very clear," Kilgariff says.

"Unless we take definitive and practical action to address issues such as urban congestion and the efficiency of our transport networks, the nation’s economy and the well-being of its citizens will suffer.

"Freight Doesn’t Vote, ALC’s submission to the Discussion Paper on National Freight and Supply Chain Priorities, contains a comprehensive range of practical ideas drawn from the freight logistics industry that can help to address the challenges which the Productivity Commission has identified."

Road user charging and road funds

The report recommends state and territory governments to conduct road user charging trials in major cities and test "behaviour under different pricing regimes (for example, refunding users’ excise while measuring their use of new infrastructure with a charge and netting off the outcome over a sustained period)" to get a more informed view of road use.

It also recommends governments to "establish Road Funds to hypothecate road-related revenues to expenditures".

"Initially designing Road Funds on the basis of heavy vehicle revenues and expenditures will help to sequence heavy vehicle and broader road transport market reform objectives and facilitate compositional shifts to new road funding sources over time," the recommendation notes.

Urban congestion                                    

ALC welcomes the Commission’s focus on urban congestion, a subject the logistics body has repeatedly raised.

"As this report notes, the problem is already costing our economy $19 billion a year, and without remedial action, that will grow to over $31 billion by 2031," Kilgariff says.

"As ALC has consistently said, policies which restrict or ban the movement of freight vehicles in particular areas, and especially in CBDs, are neither realistic nor desirable.

"It is heartening to see the Productivity Commission has drawn a similar conclusion, and calls upon governments to address the ad-hoc and anticompetitive planning policies that have given rise to the congestion problems that now bedevil our cities and their surrounds.

"ALC welcomes the release of this report, and calls on governments at all levels to take note of its very clear message as work continues on the development of the National Freight and Supply Chain Strategy."

Public input

The report suggests governments must take "short term" steps to improve the quality and value for money from road services, and as preconditions for a subsequent move to road pricing.

It recommends "restructuring governance arrangements" to ensure that public infrastructure users have a say in the project selection process and funding decisions, and they are able to provide independent appraisal of all major road expenditure proposals.

The final inquiry report was handed to the Australian Government in August 2017, then tabled in Parliament and publicly released on October 22.

The first in a regular series, the inquiry will now be undertaken at five-yearly intervals with an aim to provide an overarching analysis of where Australia stands in terms of its productivity performance.

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