Australia, Opinion, Transport News

NatRoad calls for Road User Charge to be paired with inflation in budget

NatRoad has proposed a new infrastructure budget model that it hopes will help bring down the cost of infrastructure projects and the Road User Charge

The National Road Transport Association (NatRoad) has called on the federal government to implement a budget specifically for both Commonwealth and state infrastructure projects, with rises in the Road User Charge (RUC) to be pegged against it.

The request comes as part of NatRoad’s 2024-25 federal budget submission, with the body asking the federal government to release pressure on future increases to both the RUC and registration charges.

The proposed RUC rate would instead be based on annual reviews of the effectiveness of its spending.

NatRoad CEO Warren Clark says current increases to the RUC are driven by rises in infrastructure funding. He says there’s “no regard for its effectiveness, the ability of industry to pay or whether the right priorities have been funded”.

“Enough is enough – Australia’s road freight transport industry is enduring the most difficult economic and regulatory operating environment in living memory,” Clark says.

“Most of the transport sector are small businesses working on tight margins with limited economic bargaining power to pass on costs – the existing heavy vehicle road user charging system is broken.”

Clark and NatRoad welcome the federal government’s efforts to repair the infrastructure pipeline and the government’s recognition of the tipping point where overspending results in increased contract competition and costs.

Clark says this current state of play results in the value for money spent reducing drastically, with these costs then translating into an increase in the RUC that sits above Consumer Price Index (CPI).

RELATED ARTICLE: NatRoad pays tribute to former director Sam Sali

The NatRoad CEO is calling for a cap on infrastructure funding and the resulting heavy vehicle cost base that rises with inflation.

“The cap would be subject to review ensuring inadequate road quality is maintained,” Clark says.

“Additional funding outside of the RUC would still be possible to address issues such as natural disaster damage to the network, while governments around Australia could maximise the effectiveness of infrastructure funding by improving the selection and delivery of key projects.

“These governments should also get serious about delivering National Road Service Level Standards to ensure funding is going where it’s needed most.”

This budget submission has allowed NatRoad to repeat a call first made in its Decarbonisation White Paper to establish a $3.5 billion Clean Transport Fund that will assist the road freight industry’s transition to net zero-emissions.

“We also want practical action to reduce red tape by increasing investments in better heavy vehicle road access such as the planned National Automated Access System,” Clark says.

“The government needs to roll out rapid economic appraisals for the opening up as-of-right access and extend the Strategic Local Government Asset Assessment Project to improve access decision-making.”

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