About this time last year I detailed in this column, that in early 2020, just before the world and Australia was plunged into the first wave of the COVID-19 pandemic, the National Transport Commission (NTC) undertook a review of heavy vehicle pay as you go (PAYGO) charging fees in Australia at the request of, the then named, Transport and Infrastructure Council within the Council of Australian Governments (COAG).
At that time, this was the first review of Australia’s heavy vehicle road-user charging (RUC) scheme in over four years.
A preliminary study commissioned by the NTC identified that there was a substantial shortfall (-11.4 per cent) in the revenue generated by the heavy vehicle road-user charge versus road spending in 2020-2021.
However, the NTC also found, that if the PAYGO costing formula was applied, the calculated increase was much smaller, at only 3.7 per cent. This was because the formula uses historical, not current, government road expenditure information.
I explained that at the start of the 2020 RUC review, the Truck Industry Council (TIC) expressed an opinion that the NTCs analysis should be extensive and holistic, arguing the current RUC, that derived much of its funding from a diesel tax levy, was fundamentally flawed in light of a global movement to alternatively fuelled trucks, most likely to be powered by electricity and hydrogen.
TIC postulated that the current RUC arrangements could not take Australian road transport deep into the twenty-first century and that a significant overhaul of the current charging arrangements was required.
TIC suggested a RUC scheme that ensures that all vehicles pay proportionally for the damage, or lack thereof, that they contribute to our roads, the safety they afford all road-users, the public health outcomes they generate and the carbon emissions that they produce, would be a fairer scheme.
Sadly, I also reported that the NTC rejected the Truck Industry Council’s calls for a wide-ranging review of the RUC, detailing that the scope of their actions was governed by the request set by the COAG ministers.
Hence the review process was a somewhat benign examination of the PAYGO parameters.
In TICs view, a missed opportunity. Ultimately, the outcome was that transport ministers decided to adopt a 2.75 per cent increase to heavy vehicle charges for the 2022-2023 financial year only.
Ministers justified the smaller increase due to an economy in the midst of COVID and coming off the back of drought and bushfires.
In announcing their decision in December 2021, Ministers also indicated that they would revisit the determination later in 2022, with a view to what future action needs to be undertaken. Roll on December 2022 and the now named, Infrastructure and Transport Ministers Meeting (ITMM), agree to an annual 6 per cent increase to heavy vehicle charges between 2023-24 and 2025-26, commencing from 1st July 2023. Ministers also agreed in-principle to a three-year road-user charging cycle, replacing the current annual cycle.
While this provides greater certainty to industry by providing a longer-term view of RUC costs, the decision effectively means that the next charging review will be for road-user charges beyond July 2026.
So just three and a half years away from 2030 and the Government’s commitment to cut carbon emissions by 43 per cent, Australia will still have a heavy vehicle road-user charging scheme that is based on revenue derived from diesel-powered trucks.
Revenue that will decrease noticeably as we move to 2030 and beyond, where low and zero emission truck adoption will become strong.
A scheme that does not reward operators for the take-up and use of those new CO2 emission reducing trucks.
A road-user charging scheme developed and still firmly entrenched, in the last century.
TIC continues to call upon State, Territory and the Federal Transport Governments to show leadership for the times and look beyond the current RUC scheme and to instigate a substantial review of the PAYGO road-user charging scheme in Australia.
That work should investigate and develop a heavy vehicle road-user charging scheme to take our country out of the twentieth century and into the twenty-first.
Paving the way to a safer truck fleet, one that leads to better health outcomes for all Australians, produces ongoing reductions in CO2 emissions from the road freight sector and provides operators who embrace low and zero emission technology with financial incentives while using these new vehicles in their daily businesses.
Tony McMullan CEO, Truck Industry Council
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