Opinion: Overcharged and over it

By: Geoff Crouch


The ridiculous and unwarranted charges must stop

Opinion: Overcharged and over it
What do you think, are all the charges fair?

 

In July, the Australian Government issued a consultation paper on establishing an independent price regulator for the fuel-based road user charge and the very high registration charges we pay.

At present, the road user charge and registration charges are decided by governments, although the National Transport Commission (NTC) sends them recommendations. In recent years, the NTC has told governments that our charges are too high and that they should be reduced.

To its credit, the Australian Government has reduced its road user charge. But we will still be overcharged by $189.5 million in 2018-19. In our submission in response to the Government paper, we said we supported an independent price regulator. But the Government’s plan does not go far enough.

The members of our member associations are being hammered by rapidly increasing toll road charges, landside port charges, and local government charges. On the M7 in Sydney, for example, truck tolls have increased from the same amount as cars to three times the car toll. Trucking businesses can’t avoid these tolls – it’s not like you can transport a pallet of cleaning products on a bus or bike.

The ACCC’s announcement that it would not oppose the Transurban consortium bid for WestConnex, followed by the NSW Government’s announcement that the bid was successful, confirms that new laws are needed to control these spiralling charges.

The independent regulator should also have power over landside port charges. Landside port surcharges have increased dramatically. Surcharge increases introduced in 2017 have ranged from $20 to $30 per container, and in some cases have increased twice within the one year. 

In the latest round of unwarranted charge increases, local councils in Western Australia are imposing additional access charges on heavy vehicle operators. The ATA submission points to one metropolitan example where a company has had to abandon operating at concessional mass limits because of the excessive local government charges. As a direct result, it now runs an additional 1,420 truck movements per year within the council area for a single product line. These ridiculous charges must stop.

The planned independent price regulator must be responsible for regulating toll road and landside port charges. Independent price regulation must also prevent local councils charging extra for access to their roads. 

The ATA submission rejects the Government’s plan to change the way charges are calculated from the current PAYGO model to what is called a forward-looking cost base.

PAYGO is the mathematical model used to calculate how much governments should collect from truck and bus charges. No-one would claim it’s perfect, but its advantage is that it is based on known government road spending.

In contrast, a forward-looking cost base would use a much more complicated model based on forecast government spending over the next five years or so. It’s the same model used to regulate telecommunication and power companies. If you think it works well, I’d invite you to consider your latest power bill.

In 2016, the ATA put forward a series of carefully thought out fixes to the known problems with PAYGO. Those fixes have not been properly considered. The planned independent price regulator and forward-looking cost base are just another step in a broader government plan to reform heavy vehicle charges.

We are told it would deliver significant benefits to the Australian economy. It would supposedly be more efficient, lead to better quality roads, provide better road access for trucks, and reduce vehicle operating costs. But the government plan is the wrong way round.

A new charging model won’t shift freight onto more productive trucks if governments do not build better roads and allow high-productivity freight vehicles to access those roads. Governments can and must fix these problems now and leave esoteric arguments about forward-looking costs to the end of the road reform process.

The ATA and our member associations will continue focusing on what is important: better roads and rest areas, safety, and increasing the professionalism and viability of our industry.

 

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