Peak livestock body calls for a new regulator to set heavy vehicle charges

road user charges

The Australian Livestock and Rural Transporters’ Association has put forward 17 recommendations to improve the proposals in the consultation paper on Heavy Vehicle Road Reform (HVRR).

One of the key changes it would like to see is the appointment of a new single national independent regulator – rather than multiple state and territory authorities – and that the regulator be empowered to modify or reject government expenditure plans on the basis of inaccurate costings, low benefit, inadequate stakeholder consultation or failure to progress service level standards.

ALRTA president Scott McDonald welcomed the reform proposals, but in a communique to members said the current PAYGO charging system is subject to very little oversight, is highly political and unlikely to be sustainable in the longer term.

“The consultation paper acknowledges these problems but does not go far enough to fix them,” he said.

“The four HVRR reform proposals will each improve transparency, democracy, accountability and responsibility to some degree.  However, it is questionable whether or not adding an additional layer of bureaucracy will result in more efficient decision making given that, at all levels, governments refuse to commit to binding service level standards or to give up final decision-making powers on what is built, how it is funded and the charges that will be levied on heavy vehicles.”

McDonald believes that without change in this area, the HVRR proposals are no better than the current PAYGO system under which recommendations are developed within the administrative sphere, but decisions are made in the political sphere.

“ALRTA is gravely concerned that governments have previously reneged promises to hypothecate road related taxes for road related spending and we consider that hypothecation is unlikely to produce significantly improved heavy vehicle road investment because on average just 22 percent of expenditure could be sourced from hypothecated funds.  In the absence of full market reform that also includes light vehicles, treasuries will still need to find 78 per cent of road costs from consolidated funds,” he said.

“ALRTA is also firmly opposed to any move to a complex forward looking cost base until governments are willing to adopt truly independent price determinations and industry has some confidence in other aspects of the proposed reforms, including workable service level standards and scrutiny of expenditure plans.  This should be the last step in the reform process.

“The reform proposals are a step in the right direction, but an economic market for road services will not be established unless decisions are independent of politics, light vehicles are included and the RUC is increased relative to registration charges to prove better price signalling to road users.”

For the full ALRTA submission click here.

Public submissions to the consultation on proposed changes to the way heavy vehicle charges are set and invested closed on October 28. For more information about the proposed changes, refer to the consultation page.

In June 2020, the Federal Department of Infrastructure, Transport, Regional Development and Communications released a public consultation paper titled Proposed changes to the way heavy vehicle charges are set and invested.

The paper proposed four key reforms:

1. Road service level standards: This proposal involves the establishment of agreed road categories based on the level of service provided by the road (safety, reliability and access). Each road would be assessed against the standards and allocated a current rating and a target rating.

2. Expenditure planning and recoverable cost determination: Each State and Territory Government would be required to develop an expenditure plan in consultation with heavy vehicle industry stakeholders. An independent assessor would consider the plans and determine the proportion of total expenditure recoverable via heavy vehicle charges.

3. Independent setting of heavy vehicle charges: An independent body would calculate the total charges recoverable from heavy vehicles and recommend to governments registration and RUC to apply to heavy vehicles in future years. Charges would be based on a forward looking rather than a backward looking cost base.

4. Hypothecation: All revenue collected would be hypothecated to future road spending.

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