Major freight logistics operators Asciano and Aurizon, along with the Australian Rail Track Corporation (ARTC) and the Australasian Railway Association (ARA), are calling on the Council of Australian Governments (COAG) to commit to structural heavy charging and investment reforms in Australia's freight sector when it meets in Canberra this Friday.
ARA CEO Bryan Nye OAM said the proposed reforms will improve the efficiency of the freight supply chain, drive productivity growth and increase the competitiveness of the national economy. Further, the reforms will promote greater efficiency of investment at a time of fiscal constraint and budgetary pressure.
"In its last meeting, COAG identified heavy vehicle charging and investment reform for road infrastructure as a key area for structural reform and it is now time to turn these sentiments into reality, by agreeing to a set of reform principles and taking practical steps to commence the reform process," said Mr Nye.
"We are asking COAG to agree at its next meeting to progress the reform agenda, clearly specifying that the focus for action is on heavy vehicles, and to do this in a timely manner in recognition of the substantial prospective productivity benefits for both state and national economies, but with an appropriate transitional period of four years."
The ARA is advocating that heavy vehicle charging should be applied to national highways and major state-owned arterial roads on vehicles over 4.5 tonnes. The ARA is not advocating the application of charging reform to light vehicles.
Under the reform proposals, heavy vehicles would be charged using a mass-distance-location model that is derived from the value of the road network. This model ensures that heavy vehicles are charged for the true impact they place on the road network. This is the standard model of regulated utility pricing, the same model that is currently applied to the industries of rail, water, gas and electricity.
It is proposed that all of the funds raised would go back to state governments and be 100 per cent hypothecated for investment in the infrastructure from which the revenue is generated.
Mr Nye highlighted the significant benefits that would be available to both industry and governments, including ensuring that heavy vehicle charges and funding for freight infrastructure are linked to future freight demand, as well as allowing state government control over revenue due to it flowing directly to state road agencies.
"The reforms would give state governments greater control over spending on major road freight routes and road freight operators' greater say as to where investment in freight infrastructure should take place. Linking the investment programs of government to the future needs of the road freight industry will ensure the industry is best placed to meet the demands of a growing economy," he said.
"Further, a more efficient and transparent pricing model will allow industry to make better informed decisions on modal choice."
The reforms will enable rail to effectively compete with road for long-haul freight based on the true cost of each mode. An efficient mix of road and rail use benefits the whole community by limiting the number of heavy vehicles on our roads.
"The overall productivity increases delivered through to the road freight sector would be substantial and would contribute to improving the competitiveness of Australian industry, while delivering economic and wider benefits the Australian community," Mr Nye concluded.
The members of the ARA have submitted these proposals to the prime minister and premiers for consideration ahead of the COAG meeting.
