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Thursday, 19 March 1987
Page: 990

Senator KILGARIFF(3.24) —The report before the Senate has been prepared for the Minister for Transport (Mr Peter Morris). It advises on the means by which he should distribute road grants in the future and also how grants not allocated in the land transport program legislation over the next three financial years should be allocated. The report is a very interesting one, and looking at some of its findings provides an insight into the different demands placed on roads throughout Australia. In determining how funds should be allocated, the inquiry looked at a number of ways in which the assessment could be made. It looked at providing Commonwealth funding on a dollar for dollar basis with the State and local governments, but rejected this on the basis that the Commonwealth's objectives are not necessarily the same as those of State and local authorities. I agree with the rejection of this form of funding formula, although for different reasons; it would have unfairly favoured the larger revenue raising States, against the smaller States and the Northern Territory.

Another factor which was considered was `cost disability' which would take account of the particularly high costs of restoring or upgrading roads in particular areas, or cost increases that are more rapid than those occurring elsewhere. This factor is one which is particularly relevant to road building and maintenance in outback and remote Australia. The fact is it is simply more expensive, because of its remoteness and the higher costs of materials, wages and other costs, to construct or repair roads in the outback. The Committee of Inquiry into the Distribution of Federal Road Grants rejected this factor in the road funding equation on the basis that no reliable method of measuring cost disability had been brought to its attention. Nevertheless, I believe that it is an important factor which should be taken into account when Commonwealth road funding grants are being assessed.

The Committee has ultimately come up with a formula using four indicators to determine the level of funding to go to the States and Northern Territory. Those indicators are axle loading, road occupancy and requirements for restorative works and for upgrading works. Unfortunately for the Northern Territory, only one of these indicators is favourable to its funding allocation, and what it has picked up on the swings it has more than lost on the roundabouts. At present the Northern Territory's overall percentage entitlement under the Australian land transport program and the bicentennial road developments is 2.3 per cent of the total funds available.

While the use of the axle loading indicator alone would increase the Territory's allocation by 0.3 per cent, the good news ends there. The road occupancy indicator would see the Northern Territory lose 1.7 per cent, the need for restorative work would see the Northern Territory lose 0.7 per cent, and the upgrading indicator would mean the Northern Territory would lose its entire funding allocation. The formula which will determine funding is weighted so that the axle loading indicator and the restoration indicator carry twice the weight of the road occupancy and upgrading indicators. The bottom line for the Northern Territory is a reduction in its percentage of funding of 0.06 per cent, down from 2.3 per cent to 2.24 per cent. The Territory cannot afford any reduction in its overall funding allocation for roads. It has a vast area and many thousands of kilometres of roads to maintain.

The Northern Territory has 2,700 kilometres of national highway, and 3,100 kilometres of rural arterial roads. These figures exclude local and urban roads which, of course, require considerable upkeep due to the volume of traffic they carry. The Territory's major roads are particularly vulnerable to damage from heavy vehicles such as the road trains which bring in almost all the Territory's consumer goods. Territorians do not have the choice of rail freight, and air freight is too expensive for the vast majority of goods coming in to the Territory. Road freight is the only way to get goods in. There is little doubt that the condition of Territory roads does suffer as a result of the damage inflicted by the fleet of road trains constantly on the move up and down the Stuart Highway, and along the rural arterial roads of the Northern Territory.

I have already made mention of the additional costs involved in road construction and maintenance in the Territory. These are well recognised, so it is disturbing to see that the new funding allocations recommended by this inquiry would reduce the Territory's percentage of overall funds available. This would be consistent with the Federal Government's record on Territory road funding, which has seen the Territory lose almost a third of its entitlement under the bicentennial road program for 1985-86 as a result of a freeze on funding. In addition, road funding was further reduced by the Federal Government through its decision to reduce the proportion of the road tax which was put back into road development and maintenance. Last year the Australian Land Transport Amendment Bill was enacted to allow the Federal Government to take a greater cut of the levy for itself, leaving less for the Australian Land Transport Trust Fund. There seems to have been a winding back of spending on roads, and with this latest inquiry report the Northern Territory appears to be in the forefront of the assault.