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Tuesday, 18 March 2008
Page: 2126


Mr GRAY (Parliamentary Secretary for Regional Development and Northern Australia) (7:25 PM) —I rise to speak on the Interstate Road Transport Charge Amendment Bill 2008. I am pleased to be able to contribute to this important debate. This bill introduces new road user charges and new road safety measures. I heard from the speaker opposite that the former government rejected many of the recommendations that we are about to address in this bill. The reality is that the former government did not reject the idea of these road user charges or their increase; they merely parked them under the carpet because they were too afraid to address these issues at a critical electoral time in 2007 when the former government knew they were in trouble. Under the carpet they also stuck the inflation numbers and the low productivity numbers.

In this legislation, we are addressing critical issues to do with our road transport infrastructure. You know as well as I do that an efficient economic framework which sends and receives correct price signals is a key component of a market economy. This bill receives and sends price signals to the road freight transport industry and will set a sustainable economic framework for Australia’s heavy vehicle users. It will implement principles and policies which have had bipartisan political support as well as endorsement from the trucking industry, the rail sector and highly credentialled economic advisers such as the Productivity Commission. Successive governments have supported user pays and cost recovery. Successive governments—at both state and territory levels of all persuasions—have supported the principle of cost recovery from the heavy vehicle sector. That heavy vehicles should pay their way is at the core of this principle.

In response to the 2005 national competition policy review, in February 2006 the Council of Australian Governments, COAG, led by the former Howard government, agreed to a new national reform agenda. This agenda was aimed at providing a supportive market and regulatory framework for productive investment in energy, transport and export infrastructure by improving pricing and investment signals as part of a competitive market. The agenda also focused on establishing measures to ensure the efficient use of export infrastructure. COAG and of course the former government agreed to a series of transport measures aimed at improving the efficiency, adequacy and safety of Australia’s transport infrastructure and committed to a number of high-priority national transport market reforms.

In early 2006, following the failure of the states and the Commonwealth to agree to scheduled new charges, COAG asked the Productivity Commission to examine the issues of road and rail pricing—COAG, being the instrument of the former federal government. The Productivity Commission were also asked to develop proposals for efficient pricing of road and rail freight infrastructure through consistent and competitively neutral pricing regimes. Throughout 2006, the Productivity Commission, under the former government, undertook their inquiry into road and rail freight infrastructure pricing. This involved extensive industry and stakeholder consultation and the development of a draft and final report to COAG—all done under the former government. The Productivity Commission noted that efficient freight infrastructure is of particular importance to Australia given its dispersed population and production centres. It also said that pricing and regulatory arrangements are hampering efficient provision and productive use of road and rail freight. The commission also noted that maintaining cost recovery for road freight infrastructure is an important objective. And it is cost recovery that we are talking about here not tax increases. Our heavy vehicle charges regime scrupulously ensures that heavy vehicles are not overcharged.

In April 2007, COAG—again, led by the former Howard government—considered the Productivity Commission’s findings. COAG fully endorsed the findings and agreed to a comprehensive, long-term reform agenda for road and rail freight infrastructure pricing and investment decision making. This agenda builds on and reaffirms COAG’s commitment to measures agreed to in February 2006—again, under the former government—to ensure that policy and regulatory settings promote timely and efficient investment in and the use of land transport infrastructure to enable Australia to meet the growing freight task and maximise economic growth.

COAG agreed to a phased road reform plan, focusing on the reform of road pricing. The three-phased approach focuses on immediate efficiency enhancements from regulatory reforms and improved decision-making frameworks. As a first step, COAG requested that the National Transport Commission—the NTC—undertake a new heavy vehicle charges determination. That was the decision of the former government. COAG specifically directed that the new determination would ensure that charges would deliver, and continue to deliver, full recovery from heavy vehicles of their allocated share of infrastructure costs in aggregate and remove cross-subsidies across heavy vehicle classes.

It is noteworthy that those opposite have expressed opposition to this bill. They have always been part of the dialogue on this important issue; this is not something that has cropped up overnight. This is a difficult decision, and we understand that, but the distinction between the Rudd Labor government and our predecessors is our preparedness to make the hard decisions in the name of addressing our national infrastructure needs. This bill is part of COAG’s ongoing work and sets registration charges that, when combined with the new road user charge, fully meet COAG’s request.

During 2007, the National Transport Commission undertook a comprehensive consultation process which informed its final recommendations. Flowing from these consultations, the National Transport Commission made a number of changes to its recommendations to take into account stakeholder feedback on the draft regulation impact statement. The National Transport Commission further discussed these subsequent changes with industry and government, across jurisdictions, to ensure that they appropriately reflected industry feedback. The recommendations contained in the National Transport Commission’s heavy vehicle charges determination establish a new set of registration charges which ensure that heavy vehicles pay their fair share of road construction and maintenance costs. The new charges seek to address the balance of cost recovery from different classes of heavy vehicles, ensuring the removal of cross-subsidies between heavy vehicle classes. In order to remove the cross-subsidies and ensure aggregate cost recovery, the new charges will result in increases in registration charges for larger trucks such as B-doubles and road trains.

Australians have come to expect a world-class service for the movement of fresh food, building materials, imported goods and resource materials for export—to name a few. There is no doubt that Australia’s road transport industry has delivered and will continue to deliver for consumers and suppliers alike. But to continue the service that we all expect from the road transport industry, the industry must be given the tools it needs. Year in and year out, the road transport industry invests billions of dollars in state-of-the-art trucks, including smart suspensions and trailing gear. Furthermore, the industry is acutely aware of exhaust emissions and its responsibility to address these emissions. The role for government is to ensure that safe, efficient roads are there for this industry to access. As I have heard more than one truckie say, ‘Everything in this country is delivered on the back of a truck—except for a baby.’

To ensure that the increases can be better managed and to soften their impact, the charges will be phased in over three years. The removal of cross-subsidies will result in a reduction in registration charges for many smaller trucks. For the first time, operators of smaller trucks will not have to subsidise the larger trucks’ share of road construction and maintenance costs. The determination also recommended increases in the road user charge from 19.633c per litre to 21c per litre.

On Friday, 29 February, Australian Transport Council ministers considered the National Transport Commission’s final heavy vehicle charges determination recommendations. After careful consideration of the outcomes of the public consultation process and the impact that new heavy vehicle charges will have on the heavy vehicle industry, Australian Transport Council ministers voted unanimously to support the new charges determination. Transport ministers considered that the new heavy vehicle charges reach an appropriate balance. We now have the mechanism for achieving that balance and satisfying the requirements set forward by COAG in April 2007. That is the COAG established and run by the former Howard government. In reaching the decision to approve the new determination, the Australian government announced that it would postpone the recommended increase in the road user charge from 1 July 2008 to 1 January 2009. Delaying the increase in the road user charge will help to smooth the transition to new charges for heavy vehicle operators. This is in addition to the phasing in of the registration increases.

The increase in the road user charge is not part of the bill before the House but a separate declaration under the Fuel Tax Act 2006, which was tabled in both houses last Thursday. This is an important microeconomic reform. It implements the longstanding commitment by all parties for appropriate charges for the heavy vehicle industry. At the same time that we are implementing this important economic reform, the Rudd government recognises that more needs to be done to assist the heavy vehicle industry in addressing major road safety issues. We have decided to supplement the implementation of the new charges with a $70 million, four-year heavy vehicle safety and productivity package that will fund areas such as trials of technologies that electronically monitor a truck driver’s work hours and vehicle speed; the construction of more heavy vehicle rest stops and decoupling areas along our highways and on the outskirts of our major cities to assist truck drivers’ rest; and bridge-strengthening projects and upgrades to linkages between existing AusLink freight routes, enabling access to those roads to more productive heavy vehicles. The government will consult with industry and state and territory governments to determine the best combination of projects for expenditure of the $70 million package.

The Rudd government has made some difficult decisions since taking carriage of this issue. The former government did not make difficult decisions. As I said earlier, it pushed the difficult decisions under the carpet where it pushed its inflation numbers and its productivity numbers. Our decisions to implement the $70 million safety and productivity package and to delay the implementation of the road user charge until 1 January 2009 were taken after we listened carefully to the views of the heavy vehicle industry and other key stakeholders. I note that key stakeholders like the Australian Trucking Association have expressed strong support for the introduction of the new safety and productivity package and the delay in the increase in the road user charge. I also note that the new charges will encourage state and territory governments to facilitate access of higher productivity vehicles to the road network. This, in turn, will make better use of the nation’s infrastructure—a key element of the Rudd Labor government’s plan to raise productivity and thereby fight inflation and maintain economic growth. I commend the bill to the House.