As part of our new Rural Trucking Matters series, the Question being asked by the Australian Livestock and Rural Transporters Association’s Executive Director, Mathew Munro is, “Heavy Vehicle Charging Reform: Threat or Opportunity?” Here are Mathew’s thoughts on the matter:
Heavy vehicle charging reform is a major threat and opportunity for rural and regional road transport. The decisions made by Australian and state and territory Governments over the next 12 months could reshape the way road infrastructure is delivered, the way decisions are made and the amount you pay to use the road.
Back in 2014, transport ministers rejected a National Transport Commission recommendation to reduce heavy vehicle registration charges by 6.3 per cent and to reduce the Road User Charge by 1.14cpl. Since that time, heavy vehicle operators have been cumulatively over charged more than $1bn. That’s, One. Billion. Dollars. Taken from your pocket and not spent on safer or more productive roads.
Rather than adhere to fair cost recovery principles under the current PAYGO charging model, ministers instead decided to change the rules.
Not only do ministers hate charging systems that can result in tax revenue going down, they are also worried about a shift towards electric vehicles that do not pay fuel taxes at all.
So, what is the alternative?
The most likely replacement charging system will be a telematics-based distance charge.
Right now, governments are embarking on small scale trials of around 50 vehicles to test the reliability of current telematics systems for charging purposes. Next year, a trial will commence involving up to 1,000 heavy vehicles. In both trials, participating operators will supply information to government. Government will crunch numbers behind the scenes and supply a mock bill to the operator that compares charges under the current PAYGO model and the alternative model.
If the total heavy vehicle revenue target remains the same, distance-based charges will mean that trucks travelling longer distances will pay more, while trucks travelling shorter distances will pay less. If the revenue target increases, everyone will pay more.
Distance charges might be a good thing if you are an owner operator who can only drive 12-14hrs per day. Companies that are ‘hot seating’ trucks almost 24/7 might get a rude shock when their first distance-based bill comes in.
However, this is bureaucracy we are talking about so, of course, it is not that simple.
The idea behind direct user-pays charging is that charges should be based on the cost of providing the road asset and the service level provided. And therein lies the catch for rural and regional transporters.
You are not exactly receiving excellent service on a dirt track or narrow, pot-holed, bitumen are you? So, you might expect to pay less. Well, according to some government economists you should pay more.
Why? Because if you are the only one using the road, then you get slugged with the full cost. On better roads with more traffic, distance-charges might be lower.
Fortunately, the Australian Livestock and Rural Transporters Association (ALRTA) and our six state associations are following this issue closely and fighting to ensure that rural and regional Australia is not disadvantaged.
Governments have accepted our view that they have an obligation to rural and regional communities to provide at least a basic level of road infrastructure. Without roads, these communities cannot receive essential goods and services and would have no access to external markets for their produce. The burden should not fall on trucks to provide basic roads. AustRoads has produced a report exploring technical options for calculating a ‘Community Service Obligation’ for roads – but again, it is an economist’s paradise with no clear answers.
Ultimately, it is elected federal, state and territory governments that will make the final decision about heavy vehicle charging options on rural and regional roads. ALRTA will make sure they know how the options under consideration will affect you and your communities.