TIC seeks compromise in tax increase verdict


Preference for 5 per cent increase over two years

TIC seeks compromise in tax increase verdict
Deputy Prime Minister Michael McCormack's image of the council of ministers

 

The Transport and Infrastructure Council (TIC) has recommended a heavy vehicle charge increase of 5 per cent over the next two years, in a communique released following its meeting in Melbourne.

The TIC's 12th ever meeting comprised transport, infrastructure and planning ministers from the Commonwealth, States and Territories, New Zealand and the Australian Local Government Association.

Amongst discussion topics was the contentious mooted rise to the road user charge and vehicle registration.

The final recommendation is less than the original projected rise of nearly 12 per cent over three years.


How industry made its tax case to ministers, here


TIC’s communique notes: "Council considered the advice of the NTC, and acknowledged that, following recent growth in government investment in roads, there was a growing gap between road expenditure and revenue from charges. 

"National heavy vehicle charges, which are designed to recover the heavy vehicle share of road expenditure, have essentially been frozen since 2014.

"However, in reaching its position Council was very mindful of the challenges faced by transport industry operators, and having sought the views of industry representatives earlier in the day, Council identified a preference for charges to rise by 2.5 per cent in 2020-21 and 2.5 per cent in 2021-22, subject to consideration by governments where necessary.

"Council noted the charge increases would be significantly less than the amount of 11.4% estimated by the NTC as necessary to recover the heavy vehicle share of recent road construction and maintenance costs.

"Council also directed the NTC to undertake a determination to review the method for calculating heavy vehicle charges.

"This will ensure future decisions on charges recover the correct amount from each heavy vehicle type. Industry and stakeholder consultation will be central to the determination process."

TIC further notes that, acknowledging the potential productivity gains of changes to the way heavy vehicle charges are set and spent, it agrees to develop implementation details on a package of reforms for consultation and decisions in 2020, the key elements of which include:

  • using the National Service Level Standards Framework for Roads to inform investment planning;
  • independent determination of what spending is recoverable from heavy vehicle charges using the National Service Level Standards Framework for Roads;
  • independent setting of heavy vehicle charges, [noting the 2018 Decision Regulation Impact Statement on Independent Price Regulation of Heavy Vehicle Charges]; and
  • dedicating (hypothecating) heavy vehicle revenue to fund and finance roads.

CAUTIOUS OPTIMISM

The Queensland Trucking Association (QTA), one of the strongest proponents of the lobbying effort to bring industry concerns to ministers, welcomed the early concession and says it will continue to liaise with governments on improved outcomes.  

"Undoubtedly, without the united stance from Industry Associations around Australia, the industry would have been facing a 'number' that many businesses could not have afforded," CEO Gary Mahon says.

"Pending agreement from all of the State Ministers, the increase looks like it will be equivalent to Federal CPI (2.5%) over the next two years from July 2020. 

"This is less than half of the original percentage proposed which is a fair outcome for industry and clearly indicates the strength of advocacy from the QTA and other Industry Associations.

"There will be another meeting in Canberra on Tuesday this week to finalise the decision.  I will continue to consult with State Minister Bailey and Federal Assistant Minister Buccholz on the details of this decision."

OTHER AGENDA ITEMS

Safety was a key concern, with the TIC agreeing the National Road Safety Strategy for the decade to 2030 will be underpinned by the Safe System principles and include a 2030 national target for reduced road deaths and serious injuries.

It framed the next strategy around three key themes: safe roads, safe vehicles, and safe road use.

Advancements in vehicle technology were also acknowledged, with ministers informed on "actions governments and others need to take to realise the opportunities new technologies offer to improve safety, productivity, accessibility and sustainability".

"Ministers emphasised the importance of a nationally consistent approach to connected and automated vehicles and agreed this requires collaborative and coordinated action by all tiers of government, in partnership with industry and others," the communique notes.

"Ministers committed to: continue their efforts to encourage purchases of low and zero emissions vehicles; prepare the electricity grid for a larger electric vehicle fleet; coordinate the rollout of charging infrastructure; and consider the revenue implications of electric vehicles."

The TIC received an update from the National Transport Commission (NTC) on the progress of the review of the Heavy Vehicle National Law, and endorsed its plan to publish a regulation impact statement for consultation in early 2020.

The full communique can be read here

 

You can also follow our updates by joining our LinkedIn group or liking us on Facebook

 

Trucks For Hire | Forklifts For Hire | Cranes For Hire | Generators For Hire | Transportable Buildings For Hire