Improving Road Charging

The National Transport Commission has released a discussion paper outlining possible options to improve the current method of setting heavy vehicle charges. The current method of assessing what registration charges and fuel levy rates should be has been widely criticised and the government has frozen charges for the past two years, in an admission it is flawed.


Graph showing the gap between revenue raised from trucking and spending on roads.
Graph showing the gap between revenue raised from trucking and spending on roads.


The NTC has been charged with investigating the options and reporting back to Transport Ministers with options to advance the methodology to better balance heavy vehicle charges and government revenues.


Chief Executive of the NTC Paul Retter is encouraging governments, the heavy vehicle industry and all other interested parties to consider the merits of each of the options contained in the discussion paper.


“The nine options identified in the discussion paper seek to resolve some of the limitations of the current ‘pay as you go’ (PAYGO) system for heavy vehicle charges,” said Retter. “We welcome stakeholders’ views on the options, their compatibility with each other and the criteria for each of them.”


The proposed options include:

  • Adopting a ‘life cycle’ approach using forward looking costs
  • Adopting a Forward Looking Cost Base using forecast budgets (financial costs)
  • Ring-fencing heavy vehicle charges revenue
  • Introducing an ‘unders and overs’ account
  • Turning heavy vehicle charges into a tax
  • Continue to freeze revenues
  • Re-examining the heavy vehicle cost base allocators
  • Re-examining the amount of local government expenditure excluded from the PAYGO cost base
  • Changing the heavy vehicle charge setting process: independent price regulation

According to the NTC, the use of fuel-based road user charges (RUC) and annual vehicle registration charges to recover the identified costs from heavy vehicle operators will remain unchanged.


Retter said the NTC would now consult with stakeholders on the proposed options. It is planned that the NTC will present its recommendations to Australia’s transport ministers in November this year for their consideration.


The NTC’s discussion paper is available here and submissions can be lodged between now and July 27.