Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

The Interstate Road Transport Charge Amendment Bill (No. 2) 2008 and the Road Charges Legislation Repeal and Amendment Bill 2008 are keystones of the Rudd government’s commitment to positive reform of the road transport industry. They will tidy up outdated modes of collecting national heavy vehicle charges and address imbalances that exist in the current system. The intention is to produce a consistent nationwide structure for the recovery of costs from the industry for maintaining Australia’s critical interstate road network. Industry and all Australian governments have been pursuing vigorous reform in order to improve efficiency and safety within this vital industry. Long-term national reform is always challenging, and the challenge of committing to high-priority national transport market reforms is crucial to Australia’s transport infrastructure.

The Interstate Road Transport Charge Amendment Bill and the Road Charges Legislation Repeal and Amendment Bill implement the 2007 Heavy Vehicle Charges Determination. The effect of the two bills is to create a uniform set of charges for the entire Australian road transport industry. A new road user charge and new vehicle registration charges for heavy vehicles will be established throughout Australia. As part of this initiative the Rudd government is supplementing the determination with a $70 million four-year Heavy Vehicle Safety and Productivity Package. This legislation is the culmination of a series of interactions between industry, the Australian Transport Council, the National Transport Commission, the Council of Australian Governments, the previous coalition government and the Rudd Labor government.

This legislation will have a significant and positive impact on my seat of Corangamite and the major transport route that crosses the electorate—the Princes Highway. This major arterial road runs through Geelong into my electorate and across the width of Corangamite and heads towards Warrnambool. The Princes Highway is a conduit for agribusiness products from south-west Victoria and south-east South Australia to the export gateways of Portland, Geelong and Melbourne. The highway runs through the fastest-growing dairy production area in Australia, which accounts for 21 per cent of national milk production and has annual exports now exceeding $1 billion. A large proportion of logging trucks from the Otway plantations transport wood for timber and woodchipping along the Princes Highway to the ports of Geelong and Portland.

The aluminium smelting company Alcoa, which has plants in Geelong and Portland, uses this route. Potatoes and grain from south-west Victoria also travel along the Princes Highway to market and consumer destinations. Traffic along this corridor is expected to increase by between 25 per cent and 66 per cent over the next seven years. Whilst this road is vital to primary industry, it is also vital to the tourism sector. The route also provides access to the Otway Range and provides alternative access to the Great Ocean Road and coastal communities.

I understand fully the implications of the road transport industry for my electorate and it has been a main focus of my tenure as a federal member. During last year’s election I campaigned heavily on having this vital road, the Princes Highway, upgraded as part of Australia’s infrastructure demands, particularly by having it duplicated. This year, the Victorian government matched our election commitment of $110 million to duplicate the Princes Highway, and I can report that planning is progressing well on this important and vital piece of infrastructure for my electorate. This government is also assisting the heavy vehicle industry along busy transport corridors such as the Princes Highway through a $70 million supplementation to the heavy vehicle safety and productivity package.

A lot of work and commitment has gone into this important reform and the Rudd government has consulted with industry and state and territory governments to determine the best combination of projects for the use of this $70 million package. From the numbers on the Princes Highway, it is understandable that the road carries a dangerous and high-volume mix of heavy vehicles, commuter vehicles and tourism traffic. As part of the heavy vehicle safety and productivity package, there will be construction of more rest stops along our highways and on the outskirts of our major cities to assist truck drivers in implementing rest.

This package will also include trials of black box technologies that will electronically monitor a truck driver’s work hours and vehicle speed. This is a positive development in road safety standards for this very important industry. Serious injury and fatalities not only are devastating to those involved and their families but represent a huge financial burden on the federal government, estimated to be $1.7 million per fatality and $406,000 per serious injury. The commencement of trials with black boxes will also assist businesses in monitoring logistics as they will provide data that can be used to streamline routes and enhance productivity in this important industry. Other components of the package include bridge-strengthening projects and upgrades to linkages between existing AusLink freight routes, enabling access to those roads and making heavy vehicles more productive.

There will be a significant increase in road freight in the future, and this legislation aims to reform existing legislation whilst providing a positive assistance package for the industry that it will most affect. Currently, heavy vehicle charges are based on the pay-as-you-go principle of cost recovery, which has been the status quo since 1992. This is a measure by which heavy vehicles pay for a share of the recovery of road spending. Over the years, costs allocated to heavy vehicles were set by determinations made by the National Transport Commission. The determinations were tied to the consumer price index, which failed to accommodate increases in government road expenditure greater than the cost of general inflation. The adjustment was also based on changes in road expenditure, reflecting an assumption about the level of heavy vehicle fleet growth.

On top of the fact that the current legislation is obviously due for reconsideration, there have also been significant changes to the dynamics of this important industry. For example, in 2000 the charges for B-double trailers were capped. At the time, B-doubles were a new class of vehicle and their numbers on Australian roads were quite small. Their charges were capped to prevent substitution by less safe road trains. Since 2000, there has been a 220 per cent increase in the number of B-doubles on Australia’s roads to 8,339 vehicles. B-doubles are increasingly used on urban arterial roads and into ports, whilst road trains operate the long-haul routes in remote and outback areas. The acceptance of B-doubles onto metropolitan and regional freight routes and having road trains keep to remote areas means that substitution of road trains for B-doubles is no longer a significant risk. Therefore, due to the maintenance of the 2000 rate cap, B-doubles and heavy vehicles are heavily subsidised by carriers operating smaller vehicles. There is a clear argument here for providing funding for safety and productivity purposes and for reforming a growth industry that is inhibited by the lack of recent reform to keep pace with that growth.

This legislation is a culmination of a number of initiatives and determinations by both industry and government over the past few years. Successive governments at Commonwealth, state and territory levels have supported the principle of cost recovery from the heavy vehicle industry for its fair share of road construction and maintenance costs incurred by government through the collection of heavy vehicle charges. The Australian Transport Council rejected the third determination and requested a review into heavy vehicle charges because it was perceived it would overcollect $170 million from the industry.

In October 2006, the National Transport Commission was directed by the Australian Transport Council to develop a new heavy vehicle charges determination. Subsequently, the Council of Australian Governments meeting in April 2007 endorsed the need for a new charges determination. At their meeting on 10 February 2006, the Council of Australian Governments requested the Productivity Commission to develop proposals for the efficient pricing of road and rail freight infrastructure through consistent and competitively-neutral pricing regimes. The report was to be conducted in a manner that maximised net benefits to the community, in particular rural, regional and remote Australia. The Productivity Commission report concluded that the estimates of the National Transport Commission of heavy vehicle costs were conservative by international standards and at the lower end of various attribution methodologies. In effect, the report found the industry was not paying its way. In response to the outcome of the Productivity Commission report, the Council of Australian Governments required the Australian Transport Council to devise a new charges determination for implementation on 1 July 2008. The new determination was framed to fully recover infrastructure costs from the heavy vehicle industry, to end cross-subsidisation between heavy vehicle classes and to index charges to ensure costs continued to be recovered. The level of proposed recovery is $1.95 billion, which is an increase on the currently recovered $1.78 billion but still a shortfall of around $170 million.

The determination of the Australian Transport Council was unanimously agreed to by the transport ministers at their meeting in February 2008 for implementation on 1 July 2008. The revised heavy vehicle registration rates have already been implemented by all states, with the Northern Territory currently introducing the new national charges into their parliament. The Commonwealth, however, is yet to introduce new registration charges for Federal Interstate Registration Scheme vehicles.

In March the Senate rejected bills to implement the new charges in the ACT and for Federal Interstate Registration Scheme vehicles. The failure of the Senate to pass these important pieces of legislation means inconsistencies remain in charges between the states and territories. The heavy vehicles registered in the ACT under the Federal Interstate Registration Scheme represent just three per cent of the heavy vehicles in Australia, and the registration revenue from those vehicles is returned to the states and territories in full. The new charges were implemented by all states on 1 July 2008 and will ensure that heavy vehicles pay their fair share of the costs of providing the road network and for the damage that they cause to those roads, and the Australian Transport Council endorses the principle of cost recovery. The new charges will result in a decrease in the registration charges of one-quarter of the fleet. For 69 per cent of the fleet there will be an increase of no greater than 10 per cent and there will be significant increases for the remaining six per cent of the heavy vehicle fleet. However, the majority of these vehicles are heavy truck trailers and multicombination vehicles that are currently subsidised by smaller vehicles. As you can see, this has resulted in a rebalancing of heavy vehicle charges, with some registration costs falling and others increasing.

Throughout the development of this legislation, there was extensive consultation with key industry stakeholders. The National Transport Commission conducted discussions with industry representative groups such as the Australian Trucking Association and the National Farmers Federation. After amendments were made, key industry stakeholders were further consulted about subsequent changes. Australia’s freight transport industry needs more cooperation, leadership and a sense of urgency to maximise Australia’s international economic competitiveness.

For the sake of playing politics, the opposition is withholding this important piece of road transport reform legislation from three per cent of the industry, as these policies have already been adopted by all of the states. Legislation needs to be passed in the spring sitting to allow the new rate of the road user charge to come into effect on 1 January 2009, as agreed to by all Australian transport ministers at their February 2008 meeting. This government is committed to providing the industry with support during the changeover period, with an investment of $70 million in crucial road transport infrastructure. It is in the best interests of the industry and all of the governments of Australia that we have a fair, balanced system of recovering the costs of maintaining the national road system from the industries that are causing the most damage to it. In the past, some sectors within the industry have benefited from other sectors, and that is being rectified by these important legislative changes.

There are some important aspects that the opposition will need to consider when this legislation goes back to the Senate, such as that the ongoing under-recovery of heavy vehicle charges provides a strong disincentive for states and territories to allow wider access to their road networks for high-productivity vehicles. The effect will be that any further expansion of high-mass-limit networks will be put at risk, as will the ability of the heavy vehicle industry to innovate and develop new, safer and more productive vehicles to take advantage of these networks. This is important legislation that is providing better infrastructure and improved services to the road transport industry and the opposition is simply playing politics by attempting to block it. This legislation is designed to make better use of the nation’s infrastructure and to readdress the balance between pay as you go and removing cross-subsidies between different classes of vehicles. The Rudd government’s plans to raise productivity, fight inflation and maintain economic growth is dependent on legislation such as this. I commend the bills to the House.

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