A group of local councils in Western Australia recently made news for calls to raise the tax on heavy haulage companies to compensate them for damage to the road network. First reported on the ABC, many figures in the transport industry have been arguing against the call. ATN spoke to Western Roads federation CEO Cam Dumesny about the issue.
As reported on ABC News on Wednesday, a group of WA regional councils are calling for more compensation from mining and logging companies. The groups want these companies to pay more for the damage their trucks inflict on the government’s roads.
The regional council’s point to damage to roads as evidence the revenue they receive is not enough to cover maintenance of the network.
South West councils announced they will lobby the WA Local Government Association to update guidance on the levy, meaning councils have the ability to increase charging for road maintenance.
Capel Shire president Doug Kitchen told ABC News that the levy hadn’t been updated for a long time and that they wanted to see less of an impact on ratepayers to maintain roads.
“The price index hasn’t kept up with the reality of road maintenance cost increases,” Kitchen told ABC.
“The Shire of Capel has advocated for the South West local government zone to have that reviewed and updated so local governments can have a fairer return on those maintenance upkeep costs.”
Cam Dumesny, CEO of the Western Roads federation, however, argues that governments, and not industry, should be responsible for covering any extra maintenance costs.
“It’s essentially a government funding problem, not an industry problem or a problem of taxes and levies that are too low,” says Dumesny.
Dumesny, along with other figures in the industry, has pointed out local governments already put levies on extractive industries for road maintenance.
The current government model for road maintenance funding involves two streams of revenue that go from industry to government.
The first is a fuel tax excise that operators pay to the federal government. And the second is heavy vehicle registration fees paid to state governments.
Part of the issue is that though local governments own most of the roads trucks use, they do not have any direct revenue streams to tap into for road maintenance: they need to rely on the state and federal governments to deliver them that funding.
In Western Australia the Main Roads organisation states that the local road network within Western Australia totals more than 125,500 kms, which amounts to 88 per cent of the total state road network.
Dumesny says a call for higher taxes is just a way for local councils to avoid navigating the somewhat complicated government grant system for extra funding.
“it’s a lot of effort for the councils to submit all the appropriate grant applications, so it seems to them its easier to just introduce a new tax,” says Dumesny.
There are 138 local governments in Western Australia and Dumesny says the Western Roads federations work well with most of them. He argues that these local governments that are making the calls for higher taxes are in the minority.
“We already pay our fair share, if local government doesn’t have enough funding they should go and sort it out with their state and federal government colleagues,” says Dumesny.
The transport industry operates under a lot of pressure at the best of times. Any increased taxes could potentially put even more financial pressure on these companies forcing them to question whether it would be worth operating in the long run or not.
The call for higher taxes could in fact end up coming back to hurt these local governments because it could potentially decrease their revenues. If local businesses are forced to pay more for transport, then it will could lead to regional business closures.
Akin to biting the hand that feeds you – less jobs means less ratepayers in their regional areas.
“They should be in the business of encouraging economic activity, not discouraging it,” says Dumesny.
There’s another underlying issue to the problem of government road maintenance and that is the quality of the roads in the first place.
People who work in the transport industry know that road quality can be inconsistent in Australia, particularly in rural areas. Heavy vehicles having to navigate damaged roads has been an issue in many states, not just WA.
Dumesny argues that if governments had invested more in the road network to begin with and built it to a higher standard so it could sustain use by heavy vehicles there wouldn’t be a need to raise more funding.
“It’s like buying a car, you can buy a cheap truck, but it won’t last long. If you pay more for better truck, it lasts longer. It’s the same with roads, there was never the appropriate investment there,” says Dumesny.
“Road quality has always been a common complaint in the Western Australian transport industry”
The Western Australian economy relies on commodities and the transport of commodities around the state with heavy vehicles that pull very heavy loads and as a result can cause damage to roads that are not built properly.
“We’re a commodity trading state and that relies on a quality road network,” says Dumesny.
Dumesny emphasises, however, the fact that the transport industry shouldn’t be punished for improper government investments.
“We work well with a number of local governments and support their initiatives,” says Dumesny. “We’re open to talking to them but we’re not paying any more.”