Freight Rail, Safety, Standards & Regulation

Road pricing reforms opened to comment

M80 ring road. Photo: Creative Commons / MagpieShooter

A level playing field for road and rail operators could be closer to reality, thanks to the release of a discussion paper into the establishment of independent price regulation for heavy road vehicle charges by the Department of Infrastructure and Regional Development.

Urban infrastructure minister Paul Fletcher announced public consultation was underway on independent price regulation for heavy vehicle charges, following the release of a Land Transport Market Reform discussion paper by the Department on May 25.

Road pricing reform has long been a goal of the rail industry.

The 2015 Harper competition policy review described roads as “the least reformed of all infrastructure sectors”. The Australian Logistics Council has repeatedly called for a single national economic regulator for land transport to make road and rail pricing decisions in a consistent manner. Australasian Railway Association boss Danny Broad called for road pricing reform before this year’s Budget, citing the illogical advantage enjoyed by “heavy vehicles along major interstate routes which compete with rail”.

Heavy vehicle users are currently charged for access to public roads via federally-managed, fuel-based road user charges, and through state-managed vehicle registration fees.

The Australian Trucking Association argues the existing rules see truck operators overcharged for their road use, but the rail sector contends the current scheme gives roads an unfair advantage over rail on long-haul journeys.

Rail, the industry argues, is the safer, more efficient, and more environmentally friendly choice in many cases, but is unable to compete with road operators in dollar terms, due to access charges applied by railway owners, that simply do not compare to fuel-based road charges.

The discussion paper released on Thursday says future charges should be set by an independent regulator, and based on forward-looking cost base estimates aimed at more closely tying together the amount heavy vehicle users are charged, and how much it will cost to maintain the roads they use.

The three candidates proposed to act as independent regulator are the Australian Competition and Consumer Commission, the National Transport Commission, or state- and territory-based economic regulators.

Either way, Fletcher said on Thursday, the paper is a big forward step for road reform. “Independent price regulation of heavy vehicle charges would enable a regulator to determine road user charges for heavy vehicle operators at arm’s length from government,” the minister’s office said. “Charges would be designed to more directly and effectively link user charges to government expenditure on roads.”

ALC boss Michael Kilgariff immediately welcomed the discussion paper, saying the move towards independent road pricing was a positive one for supply chain efficiency “against the backdrop of an increasing national freight task”.

“Australia’s freight logistics industry and the wider economy rely heavily on an efficient road network,” he said. “Independent price regulation will help to achieve this by more directly linking road use charges with government investment in the road network.”

Stakeholders can make submissions to the consultation process on the Department of Infrastructure and Regional Development’s website.