A range of improvements have been recommended to the current heavy vehicle charging system to ensure it is more practical and fair, according to a discussion paper released by the National Transport Commission (NTC) for public consultation.
The NTC’s acting chief executive George Konstandakos said the heavy vehicle charges review discussion paper was developed collaboratively with industry representatives and governments.
“We have been working closely with industry and governments to identify potential improvements to the current charging system,” said Mr Konstandakos.
“We’ve found that while the current system has achieved its primary objective of ensuring industry pays its fair share of government spending on roads, changes could be made to ensure the system is fairer, easier to understand and more transparent.”
Some of the proposed changes outlined in the discussion paper include:
Ensuring the principles which guide how the NTC calculates charges take account of how operators use different vehicles combinations. The way these principles are interpreted should also be made explicit in any charges review. Exploring how to further improve the accuracy of the data that is used to calculate charges. Ensuring the cost of registering heavy vehicles better reflects the way operators use different vehicle combinations. Exploring an axle grouping charge, i.e. under the current heavy vehicle charging system charges are calculated based on the assumption that articulated vehicle classes such as B-doubles retain their configuration during the financial year. However, operators may use the prime mover and trailers to form another combination. In contrast, an axle grouping charge uses the number of axles in each group to determine the charge. Exploring whether it is more equitable to increase the fuel-based road user charge and reduce the registration charge so low-mileage operators are charged more fairly for their use of the roads.
Mr Konstandakos said the NTC is keen to hear from industry and governments about their views on the proposed changes.
“We’re holding a series of public consultation forums around the country during March to generate awareness and discussion about the proposed recommendations contained in the paper,” said Mr Konstandakos.
“We encourage anyone interested in learning more about the review and having their say to register to attend one of the consultation forums by calling toll free 1800 503 082 or registering online.”
“The NTC would also like to thank everybody who has contributed to this review so far, particularly those industry and government representatives who have shared their valuable time and expertise with us,” said Mr Konstandakos.
The heavy vehicle charging review discussion paper can be downloaded from the NTC website.
Submissions on the discussion paper close on 2 April 2013 and will inform the final findings and recommendations the NTC will present to the Standing Council on Transport and Infrastructure (SCOTI) in May 2013.
SCOTI approved the NTC undertaking the heavy vehicle charging review in February 2012, as part of a new heavy vehicle charges ‘determination’.
‘Determination’ refers to the process the NTC undertakes to review the way heavy vehicle charges are set, including making specific recommendations on what the charges should be.
This review is the first stage of the determination, which must be completed by 1 July 2014.
The review and determination being undertaken by the NTC is a separate project to the Heavy Vehicle Charging and Investment Reform, which has its own Board and project team.
The NTC’s review and determination seek to enhance the heavy vehicle charging system in its current form and within the current institutional framework. The HVCI project is developing recommendations for the future of heavy vehicle charges which would exist under new institutional and governance arrangements.
Background on heavy vehicle charges
Australia uses a pay-as-you-go (PAYGO) model which is based on a fixed annual registration and fuel-based road-user charges. Revenue recovered through heavy vehicle charges contributes to building better and safer roads.
PAYGO was introduced in Australia in 1992 to:
Help recover the marginal or attributable costs of road wear and tear for each heavy vehicle type. Recover a share of common road costs which benefit all road users, such as street lighting, rest bays and signage. Ensure heavy vehicles pay their share of road spending.
Around 40 per cent of heavy vehicle costs are recovered as state and territory registration fees, with the balance paid through a fuel-based road user charge which is determined by the Commonwealth Government.
The NTC calculates charges by using a seven year average for both expenditure and vehicle numbers. The averaging process is designed to ensure charges do not change significantly in response to short-term changes in expenditure. The NTC uses vehicle numbers obtained from the Survey of Motor Vehicle Use, which is independently compiled by the Australian Bureau of Statistics.
The NTC calculates charges in accordance with the Fuel Tax Act 2006 and principles set by both the Standing Council on Transport and Infrastructure and the Council of Australian Governments. These principles are binding on the NTC. The principles are:
Full recovery of allocated infrastructure costs while minimising both the over and under recovery from any class of vehicle. Cost-effectiveness of pricing instruments. Transparency. The need to balance administrative simplicity, efficiency and equity (e.g. impact on regional and remote communities/access). The need to have regard to other pricing applications such as light vehicle charges, tolling and congestion. Ongoing cost recovery in aggregate. The removal of cross-subsidies between vehicle classes.
