NatRoad

Pound of Flesh from the Heavy Vehicle Industry

pound of flesh from the heavy vehicle industry

Warren Clark, CEO NatRoad has been thinking about fairness and the way governments of all stripes extract their pound of flesh from the heavy vehicle industry.

The recent hike in the Road User Charge (RUC), announced about the time of the Federal Budget, is a good case in point.

The Road User Charge (RUC) applies to each litre of fuel, such as diesel, used by heavy vehicles such as buses, coaches and trucks on public roads.

It is set out in the Fuel Tax Act 2006 and is intended to recover the greater cost of maintenance and repair as a result of the use of heavy vehicles on our roads.

The country’s transport ministers decide how much it will rise by over a three-year cycle.

The pollies have upped it by six percent over each of the next three financial years. NatRoad wanted a one-year freeze in view of the tough economic conditions we are all grappling with, and a 2.7 percent hike in each of the years following.

The NatRoad position is that the RUC is fundamentally flawed because its level is guided by past State and Territory road expenditure.

This produces a situation where charges are driven solely by governments’ spending plans, even where those plans are inconsistent with industry requirements, such as the need for more road maintenance.

It also disregards industry’s ability to pay.

And we all know that’s at its lowest point in living memory.

Don’t forget heavy vehicle registration charges. These are levied by each State and Territory and they rise in line with the RUC.

The issue here is that rego charges are not funnelled directly into expenditure on roads. They go to general revenue.

How it is spent in each jurisdiction is anybody’s guess.

There is a broader question and it’s looming fast.

Given that the RUC is tied to fuel costs, what happens when all vehicles move to electric or hydrogen power?

The simple answer is that government revenues from this important stream will dry up.

Our industry already had a solid case for reform, based on the unfair nature of a tax where the reason for its collection does not necessarily match how it is spent.

But how much more urgent does it becomes if the High Court rules a state charge on motorists driving low emissions vehicles is out-of-order?

The move to alternative fuels ups the ante. 

It makes designing a new model an imperative and that’s something that NatRoad has been seeking for years.

 

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