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Next steps critical for heavy vehicle road reform

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25 July 2019

Governments need to focus the Heavy Vehicle Road Reform agenda on supply side road funding reforms, the Chair of the ATA, Geoff Crouch said in response to the launch of the small-scale charging trial by the Australian Government. 

The ATA represents the 50,000 businesses and 200,000 people in the Australian trucking industry. 

“In November 2018 Transport Ministers agreed to develop nationally consistent service level standards for roads, to categorise roads by their functions and set customer-focussed service levels. This is intended to improve transparency and the evidence base for road funding decisions,” Mr Crouch said. 

“This is a critical reform to deliver a more productive road freight network and something that the ATA has been a long-standing advocate for. 

“As the Government takes the next step in considering change on heavy vehicle charges, they need to prioritise reforms on how roads are provided which is where the largest economic gains from reform will be found. 

“We welcome the Government’s commitment to prioritise progress on reforms to improve infrastructure investment,” he said. 

Mr Crouch said that the ultimate test for the charging trials would be if they could demonstrate an overall net benefit for industry. 

“For both the small-scale charging trial and the planned large-scale trial the ultimate test will need to demonstrate an overall net benefit for trucking operators,” Mr Crouch said. 

“Luke Vesey, Chief Financial Officer at Ron Finemore Transport and one of the Daimler Truck and Bus Future Leaders participants identified that 99.5 per cent of the projected economic benefits from heavy vehicle road reform were a result of supply-side, road funding reforms. 

“Only 0.5 per cent – or $17 million – was a result of changing the charging system, and it’s not clear that governments have considered all the impacts on trucking operators. This figure was drawn from and also highlighted in the July 2018 Consultation Regulation Impact Statement (RIS) prepared by Jacobs Marsden. 

“Luke’s work in this area is significant, as someone who both understands the policy arguments from governments but also understands how successful Australian trucking businesses, like Ron Finemore Transport, actually operate. 

“If the charging trials can’t demonstrate an overall net benefit then governments should not implement a direct distance-based charging scheme. The proposed changes create a significant amount of cost, complexity and risk for Australia’s heavy vehicle transport industry (and its intermediate and end-state customers) and at a time that all of Australia’s supply chain sectors need to be striving for global leadership in long-term investment, sustainability, productivity and international competitiveness.” 

Further work is also needed before the next stage of large-scale trials can proceed. 

“Direct distance-based charging is incredibly complex and it is not yet clear that the right framework in in place for next year’s proposed large-scale trial,” Mr Crouch said. 

“The Government should continue to engage and consult industry before launching the proposed large-scale trial. 

“Ultimately, if governments don’t make real progress on supply side road funding reforms then there is no case for the charging trials to continue.”