Truckies and fleet operators are being asked to volunteer for phase two of the federal government’s trial of a new way of measuring road user charges for trucks.
Instead of the existing pay-as-you-go (PAYGO) model of 26.4 cents per litre, plus rego costs, the government is trialling a system of pre-purchasing the kilometres that operators need for their vehicles using an online form and mock permits.
Participants in the 12 month trial will receive a free hubodometer for each vehicle enrolled and be reimbursed for any fitment costs.
Businesses across many industry sectors including refrigerated transport, removalists, general freight, forestry and logging, cranes, buses, bulk rural and livestock carriers, tankers and construction have signed on to participate.
“The trials are an opportunity to test how an alternative approach to road user charging might affect your business in real time, and directly contribute to informing government decisions with your feedback,” said the government.
In phase 3 of the trials, due to launch later this year, participants will test a direct road user charging model based on mass, distance and location with data collected using telematics devices. ‘Mock’ invoices comparing current PAYGO charges (fuel excise and state/territory vehicle registration) to the alternative charging model will be provided each month during the trial.
“I didn’t want the government telling me how they were going to charge us without having some sort of input,” said trial participant David Rogers of D.T. Rogers Bulk Transport in Wallace, Victoria.
“I’m hoping it’ll be a different style of charging for rural transport. I think it’ll be good for our transport business and I think it’ll be good for the transport industry, full-stop.”
Both trials propose that heavy vehicle charges are set on a forward-looking, rather than a backward-looking, basis.
Road managers would report planned expenditure for the next year or two, and the heavy vehicle share would be worked out in a similar way to how it is worked out now under PAYGO.
The big difference between the two models is how you work out the amount of revenue to be recovered through charges. Under PAYGO, it is the total of actual recent expenditure. Under a forward-looking cost base, the required revenue is the sum of three building blocks:
- Planned operating expenditure of road managers for the year in question;
- Depreciation of the long-lived asset base; and
- A return on capital (or interest) on the long-lived asset base.
The amount paid in charges is likely to be similar under either model. The present value of the charges paid by heavy vehicles will be the same whether you use a simple backwards-looking cost recovery or a forward-looking building block model.
But the big advantage of the latter is that road users pay for road assets as they are consumed over the asset lifetime.
“Not only is that fairer – why should road users today pay for all the cost of roads that will benefit others for decades? – but it smooths out the recovery of what can be very large and lumpy capital expenditure.”