Australia could be on track to adopt a user-pays system for roads, with senior bureaucrats and economists saying momentum for reform is ‘beyond doubt.’
The former head of the federal infrastructure department Mike Mrdak and the chair of the Commonwealth’s competition review Ian Harper are among the experts who say Australia’s adoption of road pricing is not a matter of if, but when.
Mr Mrdak, the former head of department of infrastructure for almost a decade, says he believes Australia is now “at a tipping point” on the full market reform of roads, “where momentum for reform is beyond doubt.”
With advocacy for reform coming from groups as diverse as governments, private transport companies, peak industry bodies and policy think tanks, Mr Mrdak says he sees “more support than ever for changing the way we provide and fund our roads.”
Mr Mrdak is among the contributors to a new book, Road pricing and provision, which argues “it is time for the policy debate to shift to how, rather than if, road reform should progress.”
Dr Harper, a leading Australian economist and chair of the Commonwealth’s competition review in 2015, writes in the book that “the ground is shifting for advocates of road pricing.”
He says the academic and policy cases in favour of road pricing are well established.
Dr Harper’s competition review is among the independent entities that have recommended road pricing, along with the Henry Tax Review, the Productivity Commission and Infrastructure Australia.
He says that other reports have since canvassed the issue and the general tenor of the public reaction has been “curious and intrigued rather than outraged.”
Dr Harper says the advent of electric vehicles raises the prospect of some users evading even the pretence of a user charge in the form of the fuel excise levy. He writes:
“The fact that these users may be among the wealthier echelons of the community adds urgency to the issue and recasts road pricing as potentially progressive rather than regressive in its impact on income distribution.”
Dr Harper says the widening application of data analytics is familiarising people with a closer relationship between their behaviour and what they pay for a service.
Co-editor of the book Michael de Percy, a senior lecturer in political science at the University of Canberra, points out that if traffic congestion in metropolitan areas is left unchanged it is set to cost $30 billion by 2030.
More fuel efficient cars have reduced fuel usage and consequently the revenue from fuel excise has been in decline, while existing user charges don’t discriminate between heavy and light users of roads, he says.
A ‘congestion busting’ minister
Given Prime Minister Scott Morrison has described the new infrastructure minister Alan Tudge as being responsible for “congestion busting”, Dr de Percy believes road pricing is likely to come back on the Commonwealth’s agenda.
“I think it has to. It’s not a question of if, but a question of when,” he tells Government News.
Dr de Percy compares road pricing to the introduction of the GST, in that there was public opposition to the policy until it was introduced and people could see their concerns weren’t realised.
He points to the major trial conducted by Transurban in 2016 which showed that after experiencing alternative ways of paying for road use, many participants preferred a user-pays system.
That study of 1,635 motorists also found that moving to a user-pays system would likely generate a sustainable funding source for future infrastructure needs.
Other work by Infrastructure Partnerships Australia in 2015 showed that under such a scheme, people who were heavier users of their cars paid more than those who used their cars less or during off-peak times.
Pilot underway, questions over study
Dr de Percy says he is encouraged by the department of infrastructure’s National Heavy Vehicle Charging Pilot, which is asking volunteer truck drivers to trial a variety of road pricing models.
“I would be keen to see something like this extended to private vehicles so people could start making their own comparisons. I think many people would be surprised,” he says.
Meanwhile, questions remain over the Commonwealth’s planned study into road pricing. The then Prime Minister Malcolm Turnbull announced the study in November 2016 but no further detail has since been provided by the Coalition.
Government News this week put questions to minister Tudge regarding both the study and the Morrison Government’s position on road pricing.
In response, an infrastructure department spokesperson said that this year’s budget had included a $1 billion Urban Congestion Fund which would invest in projects that target congestion on urban road networks.
“All levels of Australian Government are working to improve the way we pay for and invest in our roads,” they said.
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