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Monday, 11 November 1991
Page: 2893

(Question No. 1328)

Senator Reynolds asked the Minister representing the Minister for Land Transport, upon notice, on 15 October 1991:

  With reference to the National Road Transport Commission's agenda:

  (1) What mechanism is in place to ensure that the National Road Transport Commission (NRTC) will consult with the northern Australian transport industry.

  (2) Where will the NRTC be located.

  (3) Will the NRTC be responsible to the Department of Prime Minister and Cabinet, the Federal Transport Minister or the State Ministers for Transport.

  (4) What is the NRTC's timetable.

  (5) How do truck operators access legislation so they can ascertain the powers and responsibilities of the NRTC.

  (6) Will the NRTC be introducing hub-o-meters.

  (7) What are the probable final charges to be introduced across the board in the transport industry.

  (8) When taking charges into account, will sales tax exemption be available on fuel, tyres and spare parts.

  (9) Is the transport industry going to be asked to pay for the construction of roads.

  (10) Is there a proposal to introduce a pollution tax.

  (11) Have the unique requirements of rural and remote transport operators been taken into account, for example, many rural vehicles are only loaded one way.

  (12) The road transport industry pays 3 1/2 times more indirect tax than other industries; will this be taken into account when calculating road user charges.

Senator Collins —The Minister for Land Transport has provided the following answer to the honourable senator's question:

  (1) The Heads of Government Agreement signed at the July Special Premiers' Conference specifically requires the Commission to consult with interested persons. This requirement will be reflected in the legislation establishing the NRTC. It is proposed to include a section requiring the Commission to consult with governments, industry, representatives of rural and remote Australians and any other relevant parties.

  (2) The NRTC Ministerial Council decided at its first meeting in October 1991 that the Commission be located in Melbourne.

  (3) The NRTC will be established under Commonwealth legislation and will be responsible to a Ministerial Council made of up a Minister representing each of the States, the Australian Capital Territory and the Federal Government. Each Minister has equal representation (i.e. one in eight votes) on the Council.

  (4) The Heads of Government Agreement sets a tight timetable for the NRTC's recommendations. The Commission is to make its first recommendation on charges to the Ministerial Council by March 1992 and these charges must apply from no later than 1 January 1993. The Commission is to ensure that the road costs of all vehicles are fully recovered by no later than 1 July 1995, with the exception of road trains which are to achieve full cost recovery by 1 July 2000. The Commission is also required to establish a national heavy vehicle registration scheme by 1 July 1992.

  (5) Brochures outlining the structure, functions and timetable of the Commission have been widely circulated to industry bodies and in industry publications, in order to keep industry members fully informed. The proposed NRTC legislation, however, merely establishes the Commission. The legislation of particular interest to road transport operators will be the Road Transport legislation which will be the actual vehicle for the implementation of uniform regulations and charging. This legislation will be developed over the next six months in close consultation with industry. It is expected to be introduced into Federal Parliament in the 1992 Autumn sittings.

  (6) Under the arrangements agreed at the Special Premiers' Conference on 30 July 1991, the NRTC is to recommend for application until 1995, road use charges based on average distance travelled by each vehicle category. The principles on which these charges are to be based are set out in the Communique from that meeting and the Heads of Government Agreement signed at that meeting.

  The use of average distance per vehicle class avoids the need for mechanisms (such as hubodometers) to determine actual distance travelled by individual vehicles. It does, however, involve some loss efficiency and equity between individual operators as the averaging process inevitably means that some operators are overcharged (those who travel lower-than-average distances) and some are under-charged (those who travel longer-than-average distances).

  The NRTC is to examine this issue in consultation with industry to determine whether it is feasible or desirable to refine the agreed charging arrangements further to move to a system which would more closely reflect individuals' actual use of the system. Such a system would not be introduced before July 1995, if at all.

  (7) Charges have not been endorsed by government leaders through the Special Premiers' Conference process. The NRTC will recommend charges to the Ministerial Council by March 1992 to apply no later than 1 January 1993.

  (8) No, but separate consideration of the incidence of sales tax on inputs to road transport is being undertaken by the Government.

  (9) The NRTC will recommend road use charges to fully recover those road costs attributable to the activities of the road transport industry, including construction costs.

  (10) No, the charging arrangements agreed by Heads of Government address road track costs only and exclude externalities, such as air pollution.

  (11) The NRTC has been directed to take into account the regional impact of varied charges during the phasing in process between 1 January 1993 and 1 July 1995. The extent of backloading will be taken into account in the determination of charges by the NRTC. The zonal, phasing-in and road-train charging arrangements all reflect awareness of the dependence of rural and remote Australia on transport.

  (12) A clear distinction must be drawn between taxes for general revenue raising purposes, which are levied on all sectors of industry and the community, and charges for the use of roads infrastructure.

  The claim concerning the incidence of taxation on the road transport industry is based on the 1987 Inter-State Commission Report finding that the `levels of taxation on heavy vehicles are almost four times greater than the average for all industries. Although the taxes paid by the owners of these vehicles are high, road user charges are low; when added together, these taxes and charges do not fully cover their road costs' (ISC, 1987, p131).

  Recent work which updates the ISC work, and takes into account a realistic level of road use charges, suggests that in 1986-87, the latest year for which data is available, the incidence of taxes on inputs to road transport was 5.5 per cent compared to 5.3 per cent for the average for all industries.