Chris Trevor (Flynn, Australian Labor Party) Share this | Hansard source

I rise to speak on the Interstate Road Transport Charge Amendment Bill (No. 2) 2008 and the Road Charges Legislation Repeal and Amendment Bill 2008. These two bills will implement the 2007 heavy vehicle charges determination as agreed by all Australian transport ministers on 29 February 2008. The purpose is to amend the Interstate Road Transport Charge Act 1985, which imposes registration charges for heavy vehicles registered under the Australian governments Federal Interstate Registration Scheme.

The new charges that were implemented by all states on 1 July 2008 will ensure that heavy vehicles pay their fair share of the cost of providing the road network and for the damage that they cause to the roads. The new changes meet the COAG requirement that cross-subsidies between heavy vehicle classes be removed. The new charges result in decreases in registration charges for one quarter of the fleet, increases of no more than 10 per cent for 69 per cent of the fleet and significant increases for the remaining six per cent of the fleet, being the heavy truck trailers and multicombination vehicles that are currently subsidised by smaller vehicles. Starting from 1 January 2009 the Australian government intends to implement an increase in the road user charge from 19.633c per litre to 21c per litre, as agreed upon by Australian transport ministers. Additionally, the ministers have agreed to heavy vehicle registration charges. So as to remain fair and equitable with the rail system, it is important that heavy vehicles pay their fair share of the costs of providing and maintaining roads.

As with a lot of electorates, roads are a major problem in my electorate of Flynn in Central Queensland. Considering the damage to roads generally attributed to heavy vehicle usage, the Productivity Commission report of 2006 found that the industry as a whole was not paying or contributing enough to cover its share of road construction and maintenance costs. Therefore, in April 2007 the Council of Australian Governments directed the preparation of new heavy vehicle charges in order to fully recover the cost of damages caused by these vehicles and remove cross-subsidies between different elements of heavy vehicle fleets with the aim of maintaining full cost recovery in the long term through amended indexation arrangements.

According to National Transport Commission figures, the current total shortfall from the heavy vehicle industry amounts to more than $100 million per annum, or around $170 million inclusive of enforcement costs. Since road user charges were last set, there has been a significant increase of approximately 33 per cent in road expenditure by Commonwealth, state and territory departments. In addition, the number of B-doubles has increased, but they do not pay their way. The amended charges will not only provide parity among vehicles classes and between road and rail but also address the current under-recovery of these costs. I have some examples of how many trucks used the highways in my electorate of Flynn in 2007. The average daily number of trucks using the Bruce Highway between the townships of Mount Larcom and Port Alma was 1,417; the figure for those using the Capricorn Highway between Comet and Emerald, to the west of my home town of Gladstone, was 490; and the figure for those using the southern intersection of the Burnett Highway to the northern intersection of the Burnett Highway was 575.

It has become imperative to substantially increase the registration fees of large trucks so as to avoid them being subsidised by small trucks and to endeavour to spread costs fairly throughout the industry. Long-haul and interstate runs are usually served by larger vehicles such as B-doubles, roadtrains and large combination vehicles; and it is these that will feel the greatest impact of the new charges. The increases will be introduced incrementally over a three-year period in order to allow the industry to adjust. Once the new charges are fully implemented, smaller trucks can expect a total fee increase of around 0.2 per cent, with fees for larger B-doubles increasing by up to 2.8 per cent. According to estimates from the Australian Trucking Association, the new charges will result in the average grocery bill increasing by only about 30c per week. As previously stated, all governments are currently spending 33 per cent more on road funding than they were in 2001. These charges aim to recoup from the industry only costs of enforcement which result directly from damage caused by extra weight loading. Such infringements cause untimely wear and lessen the life of road surfaces, ultimately resulting in increased road maintenance costs. Enforcement needs to be carried out to ensure that road users adhere to safe practices. Currently, agencies that enforce these procedures are not benefiting from the fines collected. Commercial vehicles share our roads with private motorists, therefore their behaviour must be monitored and the costs incurred should naturally be carried by the industry.

There was extensive consultation in the development of new charges. On 6 July 2007 the NTC released a draft heavy vehicle charges determination regulation impact statement that outlined a number of options. In developing the options the NTC was informed by the third determination process, the analysis of potential impacts of changes in the level of charges and the Productivity Commission inquiry. Stakeholders were strongly encouraged to participate in the subsequent public consultation process. Written submissions were accepted and a number of focus groups were held throughout Australia. A technical workshop was conducted with road transport industry representatives and government.

The NTC conducted further discussions with industry representative groups such as the Australian Trucking Association and its member associations as well as the National Farmers Federation. Following this consultation process the NTC made further changes to the determination to take into account feedback from key industry stakeholders. A group of key industry stakeholders were further consulted about the subsequent changes, to gauge their views.

In theory the heavy vehicle industry agrees that costs should be fully recovered, and also accepts that some adjustments in the registration charges from smaller heavy classes towards larger classes may be necessary. It is also in agreement regarding the estimated amount that needs to be recouped, although the industry believes that it already pays this amount and that, as such, it is not necessary to increase charges further. The industry cites a figure of around $130 million as the amount it believes it is currently being overcharged. However, independent analysis shows that the methodology used to determine that claim has resulted in an overestimate of the current payments. It goes without saying that no industry wants to pay more than it already does; however, the trucking industry has benefited from major increases in funding over recent years and can expect to benefit further from record levels of investment in road infrastructure in the future.

Unsurprisingly, the trucking industry opposes having to pay for the full cost of monitoring its practices—around $66 million in enforcement costs—although this is a major component of the package. In order to ensure the safety of all road users it is vital that enforcement is carried out to make sure that trucks are not overloaded, potentially causing damage to our roads. Industry has stated that if the proposed charges eventuate it would like to see an increase in funding in the area of productivity-boosting investments. However, during recent years the industry has benefited from major productivity improvements. Among these improvements was an agreement to enable the use of higher productivity vehicles such as 26-metre B-doubles as opposed to the 25-metre previous maximum, a trial introduction of quad-axle combination vehicles with an increase of up to eight tonnes, an expansion of the higher mass limits network and an agreement to an extra four tonnes for semitrailers fitted out with twin-steer front axles.

This bill addresses the concerns, raised during the Senate debate in March, that the first bill did not allow the Australian government to set charges for FIRS vehicles without the agreement of Australian Transport Council ministers. This new bill provides the Australian government with the flexibility to implement charges for its FIRS registered vehicles in its own right, through regulations.

The Australian government supports national consistency and full cost recovery. To this end, implementing the new charges as set out in the 2007 heavy vehicle charges determination will bring charges for FIRS vehicles into line with those of the rest of Australia. This will provide full cost recovery for FIRS vehicles as well as creating a level playing field for all of Australia’s heavy vehicle operators. Charges introduced into regulations will be subject to scrutiny through compulsory RIS and parliamentary disallowance processes.

The Road Transport Charges (Australian Capital Territory) Act 1993 was enacted by the Commonwealth on behalf of the Australian Capital Territory and was designed also as a regulatory tool to allow jurisdictions to implement aspects of national heavy vehicle reform, such as registration charges, by adopting or referencing the national legislation within their own respective legislative arrangements. However, this process is now not used by most jurisdictions as they implement these reforms directly in their own legislation. The Road Charges Legislation Repeal and Amendment Bill 2008 will enable the Australian Capital Territory government to implement the new national heavy vehicle charges directly in its own legislation in the same manner as the other states and territories. The repeal also accords with the Inter-Governmental Agreement for Regulatory and Operational Reform in Road, Rail and Intermodal Transport—the intergovernmental agreement—entered into by the Commonwealth of Australia and the states and territories.

The road user charge is one component of heavy vehicle charges, the other being registration charges. Being based on the amount of fuel consumed, the road user charge is a much better proxy for heavy vehicles’ use of, and damage to, our roads than a flat registration charge. This is one of the reasons cost recovery from the road user charge makes up the bulk of heavy vehicle charges revenue. The National Transport Commission has reviewed all heavy vehicle charges and rebalanced them to ensure that heavy vehicles pay their fair share and that each class of heavy vehicle is not subsidising or being subsidised by another. The National Transport Commission will collect and collate the necessary data to undertake the annual adjustment calculation each year. This will then be published in the Commonwealth government Gazette and take effect on 1 July each year.

Inclusion of the road user charge in the annual adjustment process was a principle specifically supported by the Howard government. The June 2004 energy white paper released by John Howard included a specific commitment to annual adjustment of the road user charge in the same way that the states and territories adjust heavy vehicle registration fees.

Should the government implement regulations which establish automatic annual adjustment of the road user charge, it is likely that the rate of the road user charge would increase by between 1c and 2c per litre in the early years because of recent government road expenditure increases. The annual adjustment will help to ensure that heavy vehicles pay their fair share of road construction and maintenance costs. If government spending stabilised, then so would the road user charge. The National Transport Commission will undertake annual reviews to ensure that the automatic annual adjustment does not result in charges which would overrecover or underrecover heavy vehicles’ share of these costs. It is perhaps worth mentioning that, should government expenditure on roads fall or should other factors result in greater productivity within the heavy vehicle industry, the automatic annual adjustment could actually lead to a reduction in the road user charge and heavy vehicle registration charges. These bills allow regulations to be made to specify heavy vehicle charges for application to the Federal Interstate Registration Scheme vehicles. I commend the Rudd Labor government’s leadership on this issue. It cannot be overstated that these bills are for the safety of all road users. Safety for our road users is of absolute paramountcy, and I commend these bills to the House.

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