IPA calls for kilometre charging scheme

Governments urged to abolish existing road charges in favour of a 7.9 cents per kilometre fee

By Brad Gardner | April 30, 2010

Governments should abolish existing road charges in favour of a location and distance charging scheme, according to a new discussion paper.

The paper commissioned by Infrastructure Partnerships Australia (IPA) and Saha International argues existing fees are unfair and insufficient to meet the demands on the road network.

Under IPA's proposal, the fuel excise, registration and licensing fees will be replaced by a 7.9 cents per kilometre charge for all motorists.

This, according to the report, will generate $4 billion annually in revenue for infrastructure projects and target high-end road users.

"A per kilometre charge is more equitable because it means heavy vehicles which cause more wear and tear on our roads pay their fair share, while people who use public transport instead of their cars to get to work would pay much less," IPA Executive Director Brendan Lyon says.

"Our modelling shows that by 2050 Australia’s investment in transport infrastructure will need to reach $62.5 billion each year to keep pace with growth, so this kind of reform offers some badly needed solutions."

Revenue from the location and distance charge would be funnelled into a centralised infrastructure fund such as Building Australia, which would then redistribute the money to priority projects.

"In this case, a board comprising representatives of the Australian and state governments should determine the allocation, based on a rigorous and transparent assessment of each project’s benefits and costs," the report says.

If accepted, the report says a distance and location charging scheme may take five to 10 years to establish due to technology challenges, designing the scheme and running trials.

The report argues for better management of existing assets because demand is outstripping governments’ ability to deliver new projects.

It advocates the benefits of a congestion charge currently used in London, saying the decline in congestion since the scheme began three years ago has been inline with the 30 percent fall in its first year.

"Congestion already costs Australia $9.4 billion every year. Without action, these costs will more than double to $20.4 billion by 2020," the report says.

Distance charging has been opposed by groups such as the Australian Trucking Association (ATA).

It supports a fuel-based charging model on the basis that those who use the road network more will pay higher fees because they will be forced to refuel more often.

The ATA has raised concerns a distance charging model would be difficult and expensive to introduce.

The Executive Director of the Australian Livestock Transporters Association (ALTA), Philip Halton, earlier this month called for changes to trailer registration.

He says the current scheme is unfair because smaller transport companies do not use their equipment as much as larger operators but still must pay the same fee.


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