09 November 2015

Heavy vehicle overcharging to continue for two more years at least, industry groups say

The transport and logistics sector has reacted with anger at state and federal governments on the heavy vehicle charging issue following last week’s Transport and Infrastructure Council meeting.

While criticism by industry representative bodies of the heavy vehicle charging regime has been muted in recent years, the tone heated up in the lead-up to the meeting and criticism was strong after the council’s communique was released.

Australian Livestock and Rural Transporters Association national president Kevin Keenan, who joined the Australian Trucking Association (ATA) chair Noelene Watson and CEO Christopher Melham to observe the meeting, is “bitterly disappointed” in the decision to leave the situation unchanged.

Transport ministers “had a chance to return to fair cost recovery principles but have instead ignored the advice of their own statutory authority and opted to continue the blatant opportunistic tax grab”, Keenan says.

“Not one of the Ministers present was prepared to do the right thing by industry.”

The federal government froze the road user charge in its 2014-15 and 2015-16 budgets, in recognition of the problems with the National Transport Commission (NTC) charging model.

Over the next two years, truck and bus operators will face $515 million in charges above the revised NTC rate due to an under-estimation of vehicle numbers, the industry charges

The communique says registration and fuel fees “will be adjusted appropriately during this period”.

Keenan’s exasperation is unconcealed.

“Ministers have pitched this decision as a step towards implementing the new charging methodology, but this is not the case,” he says.

“Revenue is being frozen at a level calculated under a flawed model.

“Governments will now collect $3.2 billion no matter how much they spend on roads.

“Given that government expenditure on road infrastructure actually decreased during the past two years of over-charging, we can now expect to see further deferment of road spending.

“I have lost confidence that Governments will ever fix this problem.

“We have already had a two year delay and that has just been followed by yet another two year delay.

“It is no secret that Governments are actively working on a mass-distance-location charging system and moving to a forward looking cost base.

“The persistent over-charging will just be used as leverage to push us into a more complex charging scheme.

“How can we trust them to get that right and charge us fairly if they can’t, or more correctly won’t, fix the agreed PAYGO model.”

The Australian Trucking Association’s (ATA) response focused on the burden and where it lands.

“As a result of this decision, truck and bus operators will be overtaxed by $250.2 million in 2016-17 and $264.8 million in 2017-18 – in total, a $515 million hit on an industry filled with small businesses working on wafer thin margins,” ATA CEO Chris Melham says.

The NTC told ministers in 2014 that overcharging was going on and reforms to the system were needed.

However, ministers have merely asked it to complete further work on the issue, thereby delaying any move at a time when government budgets are under pressure.

“Ministers requested the National Transport Commission investigate and report back to it with options to advance the methodology to better balance heavy vehicle charges and government revenues,” the communique says.

“This decision will ensure that governments can maintain the quality of roads and services that support the heavy vehicle industry.”

Melham says the ATA argued strongly against a freeze to government revenue.

The ATA has also taken issue with a government plan for trucking operators to fund the future activities of the National Heavy Vehicle Regulator (NHVR) through registration and fuel charges.

“I also told ministers that any future increases in the National Heavy Vehicle Regulator’s budget should be paid for by governments, not industry, given this half billion dollar hit to road transport,” Melham says.

During the meeting, transport ministers also discussed changes to chain of responsibility contained within theHeavy Vehicle National Law, such as adding primary duty of care provisions covering operators, prime contractors and employers.

“The HVNL needs to be streamlined and safety prioritised through the introduction of a general duty that applies to trucking operators, consignors and all other chain parties,” Melham says.

“By doing this, governments could remove large numbers of prescriptive rules that impose high compliance costs and prevent businesses from innovating.

“I’m very pleased that ministers have agreed to a series of changes along these lines, including major improvements to the way roadworthiness is handled.

“The ATA looks forward to working closely with the National Transport Commission to develop the fine detail of the reforms.”

Ministers also agreed to continue work on a harmonised risk-based heavy vehicle inspection regime and to release expenditure plans to show how revenue from registration and fuel charges is being invested.

“These measures provide transparency around the costs of services being delivered to heavy vehicle operators and are a key achievement along the path to reforming heavy vehicle investment and charging arrangements,” the communique says.

Ministers discussed advances in transport technology systems and South Australia’s decision to conduct the country’s first on-road trials of driverless vehicles.

“The council agreed it was important to share learnings across jurisdictions; have a view on future challenges; and work towards harmonised standards and regulation to ensure that Australia is well positioned to adopt new technologies,” the communique says.

Extracted in full from ATN.