The report, A Conceptual Framework for the Reform of Taxes Related to Roads and Transport, released on August 13th by the Treasury as part of Australia’s tax review, concluded that there should be a move away from collection of revenues through fixed and variable charges towards a “user pays” system.
These charges would account more directly for the specific costs caused by road users, the paper by La Trobe University academics Professor Harry Clarke and Dr David Prentice said.
“The way drivers pay for using roads is long overdue for change,” ARA chief executive Bryan Nye said.
With road congestion expected to more than double over the next 15 years and cost $20-$30 billion per annum, ever increasing demands from road authorities for additional funding to meet transport needs was no longer an economically sustainable system, the ARA said.
“Pricing which links road use and damage to the actual costs that users pay is an essential tool in managing our roads,” Nye said.
Currently, heavy vehicles travelling long distances carrying heavy loads do not pay for the damage they cause to roads they are being subsidised by others, the ARA said.
Road transport agencies that have been reluctant to implement proper road pricing should consider that most major modern economies are introducing sophisticated and accurate road pricing schemes, the ARA said.
“Modern road pricing is now readily available and can be appropriately applied to Australia. Road pricing reform is long overdue,” Nye said.
“If road pricing reform does not occur, Australian businesses, communities and the natural environment will suffer.”