Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

I move:

That the Road User Charge Determination (No. 1) 2012 made under the Fuel Tax Act 2006, be disallowed.

For many years, heavy vehicles have been charged to recover the part of road maintenance costs that are attributed to their road use. This cost is recovered in two parts: by the states and territories through registration charges and by the Commonwealth through the fuel based road user charge. The Fuel Tax Act 2006 establishes the mechanism for the collection of the road user charge by reducing the fuel tax credit provided to eligible businesses and non-profit bodies by the amount of the charge. The act provides that these entities are entitled to only a partial fuel tax credit for fuel used on a public road for business purposes in registered vehicles over 4.5 tonnes. The fuel tax credit claimable is equal to the amount of the fuel excise minus the road user charge. The road user charge is designed as a cost recovery measure paying for the road maintenance and construction costs attributed to heavy vehicle road use.

In its February 2012 report to the Standing Council on Transport and Infrastructure, or SCOTI, the National Transport Commission provided an overview of its methodology. The NTC calculates the total cost base by gathering yearly figures from the states and territories on road expenditure and then adds this to the figure that local governments report to the ABS for road expenditure. The NTC deducts expenditure on non-road costs—for example, amenity expenses—to obtain the allocated cost base. The figure is allocated to the entire vehicle fleet by analysing the Survey of Motor Vehicle Usage, or SMVU, to determine how much should be collected from each vehicle class—that is, cars, each type of truck, motor bikes et cetera—taking into account the size in passenger car units, the weight, the kilometres driven and the equivalent standard number of axles. This allows the NTC to calculate how much is owed by the heavy vehicle industry for cost recovery. This figure is divided between the amount collected by the road user charge and state and territory registration fees on a basis of 62 to 38. The split is largely historical and reflects the revenue share between the Commonwealth and the states and territories at the time the national charges were implemented. Fuel consumption and vehicle number figures from the SMVU are used to derive the level of registration and road user charge to recover the cost of their impact on the road network.

In 2007 the former coalition government initiated a review of the formula and consultation processes in place for determining the appropriate level of the road user charge and state and territory registration fees. However, in March 2008, the coalition successfully disallowed Labor's proposed increase to the road user charge, on the basis that consultation processes were inadequate, and automatic indexation was introduced. The government sought to address these concerns, and so industry and the coalition have not opposed increases in the road user charge and registration fees since 2009.

In December 2011, the NTC invited public comment on a consultation document which set out the data and calculations used to determine options for reviewed heavy vehicle charges that would apply from 1 July 2012. During the four-week consultation period the NTC held public forums and received written submissions on the consultation document. In February 2012, the NTC recommended a rebalance of heavy vehicle charges according to new research on the road maintenance costs associated with different types of heavy vehicles. This recommendation saw most registration charges rise but others fall. Road reconstruction expenditure from the 2010-11 natural disasters was to be excluded from the calculations. It also recommended an increase in the road user charge of 2.4 cents from 23.1 cents per litre to 25.5 cents per litre, an increase of 10.4 per cent. On 21 March 2012, the SCOTI considered the level of the road user charge and heavy vehicle registration fees. A majority of those present, or who participated in that meeting, adopted the NTC recommendation. It is clear from briefings with the department, the NTC and industry groups that there are a number of unresolved issues in relation to the proposed increase to the road user charge. The industry has expressed its dissatisfaction with the consultation process that was undertaken this year in the development of the determination. While commitments were made in 2008 to improve the relationship between industry and the NTC, and this seems to have worked successfully for the past few years, there is no doubt that issues have reoccurred in 2011-12 and those relationships have broken down. In this case, despite consultations beginning in late 2011 and the NTC providing its recommendation to SCOTI in February 2012, industry was not provided with detailed information on the formula used by the NTC or the input data and the assumptions it relies upon until March 2012—and only then as a result of a freedom of information request. So the consultation period expired without the information and details of the formula being used actually being made available to the industry.

There is a difference of opinion between the Australian Trucking Association—the ATA—and the NTC as to the most accurate number of trucks that should be used to calculate the cost attributable to the heavy vehicle industry. The NTC uses historic figures from the 2007-08 survey of motor vehicle usage to determine the number of heavy vehicles there are on our roads that must be charged to recover the costs of their road usage. The NTC believes this figure is appropriate as it provides an average of the number of trucks that would be associated with the seven-year rolling average of expenditure on roads that they use to determine the amount to be paid.

However, the ATA argues that it is more appropriate to use the actual registration information from the states and territories to determine vehicle numbers, particularly as the fuel usage figures used to determine how much should be paid by each truck are current figures. Even when using the number of trucks from the same year, the ATA and the NTC cannot agree on a number of trucks and they cannot agree why their numbers are different. The NTC believes that their figures are different because the ATA is including special purpose vehicles, which are registered but are given access to concessional registration rate or are not required to pay registration. The ATA rejects this claim and says that even if you exclude SPVs, there is still a vast difference in truck numbers—in the order of 170,000 vehicles. There is a disagreement of 170,000 as to how many trucks there are in the country! The ATA believes that the flaws in the methodology used by the NTC in determining their recommendations results in an over-collection from the heavy vehicle industry. They estimate this over-collection at $1.1 billion in 2012-13 alone.

The minister has said that the determination delivers:

… full recovery from heavy vehicle users and the removal of cross-subsidisation across heavy vehicle classes.

However, the Australian Livestock and Road Transporters Association asserts that the NTC's pricing model indicates it would see road trains overcharged by $27.9 million per year, or by 40 per cent. This undermines the minister's statement. Using the NTC's own figures and pricing model, the livestock and road transporters association has shown that cross-subsidisation is occurring under his determination.

The department and the minister have confirmed that the additional stimulus expenditure outlaid during the global financial downturn has been included in the seven-year rolling average of road expenditure. The minister has said:

… heavy vehicles are already benefiting from past government investment in road infrastructure … [and] The revised charges … ensure that heavy vehicles pay their fair share of this investment.

However, this money was specifically designed to stimulate the economy and was not part of the general road construction and maintenance budget that would have been anticipated by the industry. It is unreasonable to recoup stimulus expenditure from the heavy vehicle industry after the fact to help balance the federal budget.

In May 2012 transport ministers agreed to a review of the formula, as it is generally accepted by all levels of government that it may not be an accurate reflection of the costs attributable to all heavy vehicle classes. The NTC has said that this review would look at the balance of charging mechanisms, the assumptions and methodology to 'ensure they are practical and fair'. I understand it is intended that the review be completed before the next determination on the road user charge is determined. So all ministers have now agreed that the formula is not working properly, that there is the potential for it to be significantly impractical and unfair, yet the government is insisting on an extraordinary increase this year—before that review has been completed.

Despite a majority of SCOTI ministers, or their representatives, agreeing to the increase, various state governments have subsequently implemented alternative proposals. The Northern Territory and Western Australian governments have implemented significantly lower registration increases than would have flowed from this recommendation. The New South Wales and South Australian governments have announced concessions for certain truck configurations. It is interesting to note that the meeting at which the increase was decided was attended by more departmental officials than ministers and was, unusually, held when the Queensland government was in caretaker mode. If successful, this disallowance motion will have no effect on state government heavy vehicle registration charges, which are the responsibility of state and territory Governments. They can set them at whatever level they choose.

As a result of a readjustment in the way A-trailers are charged, the figures used to determine the amount owed by the heavy vehicle industry were recalculated. A historic underrecovery of the costs attributable to the heavy vehicle industry was identified by the NTC and corrected in this determination. In February 2012, the NTC admitted for the first time that the 'NTCs previous verification processes have revealed an under-recovery' and that, if it were not corrected, it would amount to $144 million in 2012-13.

In this respect, it should be noted that the underrecovery was not contemplated in the 2011 consultation document released to the industry. There was no reference to a $144 million shortfall during the industry consultation process. The industry was not told about this underrecovery. Possibly it was only discovered by the NTC after the consultation period was over, but they did not then go back, telling the industry that they had got all the numbers wrong, and reopen the consultation process to enable a fair and reasonable negotiation to continue. There should have been discussion with industry about whether or not there was indeed an underrecovery and, if so, how it should be addressed. Either this was incompetence or it was deceit and dishonesty. Whatever name you give it, the reality is that the consultation process with the industry—a fundamental part of the way these charges are settled, was seriously flawed. The industry and the consultation process took place on the basis of their needing to be a 5.7 per cent increase. But the government, after the consultation period was over, imposed a 10.4 per cent increase. That is clearly unfair and unjust.

In June, I wrote to the Minister for Infrastructure and Transport requesting that he withdraw his determination and replace it with a more modest increase, in line with previous annual adjustments of 5.7 per cent, pending the outcome of the current review process. The minister has rejected this offer. I have also written to the Independents, outlining the coalition's position and seeking their support for this motion so that there can indeed be seen to be a proper process. The government outlined and agreed a process in 2009, I think it was, to be properly followed. They have not done that. If the comprehensive review currently underway is intended to ensure that the road user charge is fair and practical, it is only right that this process run its course before we impose such a large increase on the industry.

It is worth noting that it was the Howard government which introduced fuel tax credits in 2006 to give a better deal to the Australian trucking industry and other businesses that make heavy use of fuel. As the minister responsible, in 2006 I blocked moves by the Australian Transport Council and state Labor governments to increase registration charges for truck operators. In February 2008, when federal, state and territory Labor transport ministers increased taxes and charges on the trucking industry, I was dismayed by this move, as it would not only make the trucking industry worse off but see Australian families wear the flow-on effects to the prices of goods that we buy at supermarket checkouts.

The coalition's offer to the government to meet truck drivers halfway in reducing the road user charge remains on the table. If the government agrees to a reasonable 5.7 per cent increase rather than this arbitrary 10.4 per cent increase, the coalition will agree to the determination.

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