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Thursday, 19 March 1987
Page: 992

Senator CRICHTON-BROWNE(3.33) —I join my colleagues in commenting on the report of the Committee of Inquiry into the Distribution of Federal Road Grants. The Committee has recommended that shares of road funds should be determined by four main indicators of road funding requirements. These are: Axle loading, which measures pavement damage; road occupancy, which is a measure of total vehicle travel in passenger car equivalents; restoration, which refers to the funding needed to maintain a road in its original standard; and upgrading, which covers the funding aimed at raising the standard of a road to cater for the intensity of traffic use. In arriving at these recommendations one of the conclusions the Committee reached was that no compensation should be made for possible differences in road construction costs.

At the outset I mention two changes under the present Federal Government which have made more acute the question of how the limited funds which are available for roads are distributed. These changes have affected the aggregate size of the pool of funds. The first was the decision in the 1983-84 Budget to index fuel excise. This decision resulted in the indexing of the special 2c per litre levy imposed on fuel by the Fraser Government and intended exclusively to fund the Australian bicentennial road development program. The extra revenue which the Government received was not devoted to roads but instead was kept for Consolidated Revenue. The calculation at August 1986 was that indexing of the 2c per litre levy made the payment 2.509c per litre. Using Budget estimates the failure of the Commonwealth, the present Government, to pay the indexation increases to the ABRD has resulted in a shortfall in road funding of $196,602,000.

Senator Button —Shortfall against what?

Senator CRICHTON-BROWNE —The shortfall in revenue which would normally have been available.

Senator Button —What imaginary criterion is in your head?

Senator CRICHTON-BROWNE —Simply providing the funding which comes from the indexation of the 2c levy-instead of slipping it into Consolidated Revenue, providing it for the purpose for which it was originally designed. The second of the two decisions was the decision last year to deprive the Australian land transport program of $50m by reducing the rate of excise previously earmarked to fund it. Of course, the fuel excise on consumers was not reduced, naturally enough. It was just that the proportion of it allocated to the ALTP was reduced with the Government, again, keeping the remainder. I note that these two funding arrangements related to the use a person made of the roads and the amount of fuel taxes paid to help sustain them. The report, while recognising that such a system of road funding did not answer all the questions, at least said that there was merit in the principle of spending on roads in proportion to where fuel is used. Similar user-pays solutions are suggested elsewhere and include suggestions such as a volume of traffic measure. It is regrettable that this Government has abandoned these two healthy principles.

Another matter mentioned and rejected in the report was that road funding should be allocated with an eye to the cost disadvantages faced in certain regions. The report even went so far as to say that an assessment of disadvantages such as climate, distances and materials availability should not be undertaken even on State averages. The Committee said that this would be too hard to measure. The rejection of such an important principle in Federal-State funding has dangerous implications for Western Australia. Western Australia has but 9 per cent of the total Australian population, one-third of the Australian land mass, 28 per cent of Federal roads and 12 per cent of all roads, yet we receive something like 8.6 per cent of Federal Government funding and therefore we are very significantly disadvantaged. Not only are Western Australia's roads longer but also construction and main- tenance crews must travel further from centres of population to perform their work. Materials in many instances have to be hauled from the eastern States. The cost of living in many parts of northern Western Australia is far higher than it is in the cities and as a consequence larger salaries are required to be paid to obtain the skills of professional men. In many cases engineers have to be provided with housing. Also local governments are now exposed to the fringe benefits tax imposed by this Government.

Question resolved in the affirmative.