A report by Infrastructure Australia has met with some approval, but questions are being raised about what new infrastructure is needed and how to pay for it. The Australian Infrastructure Audit Report analyses how the population and economy is expected to grow between now and 2031 and outlines possible solutions.
The plain facts are these, Australia’s population is projected to grow from 22.3million in 2011 to 30.5 million in 2031, an increase of 8.2 million or 36.5 per cent. 72 per cent of this growth is projected to be in the four largest capitals, Sydney, Melbourne, Brisbane and Perth. In total, these four cities are projected to grow by 5.9 million people, or 46 per cent, to 18.6 million in 2031.
Clearly, this kind of growth is going to put a massive strain on current road infrastructure and stimulate strong growth in the freight task. The audit report says Government funding alone will be insufficient to provide the infrastructure Australia requires. The need to facilitate private sector investment in and operation of Australia’s infrastructure networks is seen as fundamental.
The estimated cost of congestion in our capital cities, is put at $13.7 billion in 2011 and is reckoned to get to $53.3 billion in 2031, an increase of 290 per cent. This estimate assumes no improvement in infrastructure.
At the same time, the national land freight task is expected to grow by 80 per cent between 2011 and 2031, from around 458 billion tonne km in 2011 to 852 billion tonne km in 2031. The auditors reckon the majority of the new freight is expected to be handled by road freight vehicles.
Looking at the way government can plan to handle this increase leads the audit report to a number of conclusions, when looking at road transport.
“Accommodating this growth will require a focus on policy reform to enable the wider use of higher productivity heavy vehicles (such as B-triples), and selected investment (such as increasing bridge load limits and targeted safety improvements, aimed at improving the performance of national highway infrastructure),” says the report.
“The National Highway network is a prime enabler of freight movements and economic growth. B-Triples have improved efficiency on some regional routes, however there is an opportunity to enhance the network and increase its productivity. Further improvements to productivity will require a focus on reforms to enable the wider use of such vehicles, and greater investment in bridges and measures to improve road safety.”
In reacting to the report, Chris Melham, ATA CEO, outlined a number of measures which need addressing as soon as possible, to ensure the outlined future can be handled. There are supply side reforms which need to be put in place by the states and territories, like asset registers so they know what roads and bridges they own and their condition, four year forward road expenditure plans, particularly for road maintenance and heavy vehicle road asset service standards, making the highways fit for purpose.
“Governments must also resolve the problems with the existing charging system before attempting to roll out a new one,” said Melham. “The existing system for charging heavy vehicles for their road use, a combination of fuel and registration charges, will overcharge the truck and bus industries by $117 million in 2015-16.
“This is because the charging model underestimates the number of heavy vehicles in Australia. The 2015-16 charges were calculated on the basis that there are 441,000 heavy vehicles in Australia. In reality, there are about 493,000. In considering direct pricing, governments must finally ensure that the exercise will improve decision making, without adding to the industry’s compliance costs.
“The vast majority of Australia’s 49,000 trucking businesses are small businesses. They do not want to spend $1,000 per truck to fit a special purpose GPS device, or check and query endless invoices about where their trucks went, how far they travelled and how much they weighed. Keeping red tape and compliance costs down needs to be a priority in any new road pricing system.”
The Australian Logistics Council also welcomed the report. It outlines many of the issues the ALC has been been bringing to the government’s table for the past few years. The emphasis should be on identifying, prioritising and funding logistics infrastructure, which is needed to meet our rising freight task, according to the ALC.
“ALC has been an active participant in this debate, as we acknowledge the potential benefits that could flow from the way we price and invest in logistics infrastructure, particularly when the dollars follow the freight,” said Michael Kilgariff, ALC Managing Director. “Funds collected need to be invested in the infrastructure used by the vehicle (that is, the revenue ‘follows the freight’) and not diverted into consolidated revenue for use for other purposes, and that any payments made to a road owner in the form of a CSO payment are transparent.
“ALC is committed to playing a lead role in this process on behalf of the logistics industry and will continue to advocate for policy measures that improve supply chain efficiency and productivity. These policy measures include potential future reforms to the way in which governments price and invest in our transport infrastructure.”