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Prime Mover Magazine

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Phil Taylor

Yet another review of heavy vehicle charging

September 2016

For those who don’t remember the 2013/14 review and its outcomes let me take a few lines to recap. In 2012/13 the NTC developed a discussion paper that outlined issues with the PAYGO system and suggested directions for reform. Industry was given the chance to formally comment on the issues raised in the discussion paper as well as provide additional comments and suggestions for future change.

Out of that process the NTC developed a draft Regulatory Impact Statement (RIS) that detailed suggested reforms to the Road User Charge (RUC) and annual heavy vehicle registration fees. These reforms were relayed to industry via a series of NTC workshops run nationally and again industry feedback and comment via written submissions was requested. The final outcome of this very comprehensive PAYGO review was a series of recommendations to COAG.

In May 2014 COAG Ministers agreed to implement the NTC’s suggested changes to the PAYGO methodology, however decided to delay the implementation by two years. Subsequently, and possibly due to pressure from some operator organisations, in November 2015 the Council decided to freeze RUC and registration charges at 2015/16 levels for a further two years. Based on these COAG decisions the effective outcome of the NTC’s review and recommendations is no real change to PAYGO until at least July 2018.

One notable argument that was evident in many of the responses received by the NTC during the 2013/14 PAYGO review was a call by industry for a fairer “user pays” heavy vehicle charging scheme. The front-runner for such reform is to establish a system that records Mass, Distance and Location (“MDL”) to determine heavy vehicle charges. TIC fully supports such a scheme and has further suggested that a revised PAYGO system must include a safety and environmental levy. Please let me explain.

Above 4.5t GVM, the average age of a truck in this country is 15 years, twice that of other western countries that Australia would like to compare with and there is evidence that shows that the safety and environmental performance of older trucks is poor when compared with current truck technologies. Governments do not mandate ever increasing safety and engine exhaust emission regulations for motor vehicles just for “kicks”, these newer technologies have been introduced because they save lives.

An aging truck fleet simply means slower uptake of these safer and cleaner systems. Let me give you an example, the 2015 Australia Bureau of Statistics Motor Vehicle Census showed that 48 per cent of Australian trucks were 2002 or earlier models, which have little (Euro 1) or no engine exhaust emission requirements, that is almost half of our on-road truck fleet, this is not a good outcome for our environment or public health. If the Australian truck fleet age was 7.5 years (as is typical in the USA and many European countries) TIC has calculated that the number of pre-2003 trucks would be just six per cent, leading to far better environmental and health outcomes.

TIC has long held the belief that new vehicles should be rewarded with favourable road user charges that acknowledge the safety and environmental emission systems that they deploy. To this end, TIC again calls upon governments to add a safety and environmental levy to any rework of the PAYGO system, this will assist in the uptake of heavy vehicles that will provide safety and environmental benefits to all road users as well as Australia’s broader population.

So what outcomes can we expect to see from another review, well only time will tell, but along with much of industry, TIC is hoping to see COAG lead the way with significant PAYGO reform that will unlock safety, environmental and productivity benefits for the road transport industry and Australians generally. Providing incentives for operators to modernise their fleets would help achieve these significant benefits.

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