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MDL equals high compliance and admin costs: ATA

ATA reiterates its opposition to mass-distance-location charging, while NTC commissioner warns fuel tax will remain to prop up general revenue

By Brad Gardner | September 28, 2010

The trucking lobby has reiterated its opposition to mass-distance-location charging for trucks, as the industry is warned a fuel tax will remain to prop up general revenue.

In a speech last week to the 2010 Road Pricing Conference, Australian Trucking Association Chairman David Simon (pictured) claimed mass-distance-location would deliver “very high compliance and administration costs”.

A subgroup of the Council of Australian Governments (COAG) is currently looking at the scheme, which if introduced will charge operators based on the weight of the load, how far the truck travels and the areas it travels through. Vehicles will be monitored via GPS.

“In contrast, the ATA’s fuel based charging model would be a simple extension of the existing road charging system,” Simon says.

“It would eliminate the high registration fees that create cashflow issues for many trucking operators, and would provide a strong mechanism for directing the industry’s payments into better roads.”

Under the ATA’s scheme, two-axle rigids will be charged les than three-axle rigids and articulated vehicles. The difference is meant to take into account the impact heavier trucks have on the road network.

If it proceeds with mass-distance-location pricing, Simon says COAG will need to develop a model to calculate the cost of road use for heavy vehicles.

He says they will also need to address the different costs of building and maintaining roads in different parts of the country.

“For example, it is more expensive to properly maintain a two-lane highway in Queensland’s black soil country than a two-lane highway built on limestone,” he says.

“As an industry, we need to know if governments would impose different charges for using those two roads, or if those charges would be the same.”

His comments followed personal views made public by National Transport Commission Commissioner Greg Martin at a recent livestock transport conference in Perth.

He believes any new charging system will retain elements of the existing program.

“If in the new regime whatever that turns out to be there is a component of fuel tax that goes into road user charging its probably not going to stop the Federal Government deciding to impose, if you like, a fuel tax to generate general revenue over and above road user pricing,” Martin says.

“If there’s an amount of revenue they’re enjoying now I can imagine they are going to be very reluctant to forego revenue by a new regime of road user pricing.”

Martin made the comments after being asked the percentage of fuel tax revenue that goes into road spending.

“I don’t know what the percentage is. Clearly, more money is taken out of fuel tax than is spent on roads. I think that’s a fair statement but I don’t know what the proportion is,” he responded.

During his speech, Simon rejected assertions made by the NTC that trucking operators might have to accept lower profits if mass-distance-location pricing leads to higher charges.

He says companies cannot accept lower profits because they already on tight margins.

“Increased costs must immediately be passed on to our customers, just as any savings realised by some operators will need to be passed on,” Simon says.

If mass-distance-location pricing is introduced, Simon says the ATA will fight to ensure operators can pass on their costs straight away and that sub-contractors are treated fairly and equitably.

The ATA has already sought involvement in an upcoming tax summit to address recommendations raised by Treasury Secretary Ken Henry on reforming the tax system.

Henry opposes fuel-based charging on the basis it will not account for the true cost of heavy vehicles.

“For example, while fuel tax marginally reduces road use, it has a relatively trivial impact on spillover costs such as congestion or road damage that depend on where and when the vehicles travel,” his tax review says.

“…the costs of urban congestion (which vary according to location and time of day) as well as the costs of road-wear caused by heavy vehicles (which vary according to the mass, distance and location of travel) cannot be efficiently priced through a fuel tax.”

Henry also dismisses the continuation of a fuel-based scheme because more efficient larger vehicles doing fewer trips, such as B-doubles, will not pay as much as other combinations.

“While fuel use increases with the mass of the load being carried, it does so at a decreasing rate due to economies of scale in vehicle size,” the review says.

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