Why Should We Care If Government Road User Charges Are Too Low?

why should we care if government road user charges are too low?

The Australian Livestock and Rural Transporters Association has an answer for those who ask why should we care if government road user charges are too low? According to the ALRTA the reality is that the longer we delay a charging increase, the larger that increase has to be.

If road expenditure continues to increase by 2.5 per cent annually, it would already take four years to ‘close the gap’ if heavy vehicle charges were also increased by five per cent annually, or seven years if charges were increased by four per cent annually.  

We can either bite the bullet now and ease into it, or we will have to face large and sustained increases year on year for the foreseeable future. 

By historical standards, a 2.5 per cent increase is actually quite low. Between 2008-09 and 2013-14, charges were increased by a minimum of 2.4 per cent, right up to 6.8 per cent and even a whopping 10.4 per cent in a single year. Increases of this size are hard to pass on to customers and can be enough to put struggling operators out of business.  

It is also important to recognise that abandoning fair cost recovery under the PAYGO model would place us at the mercy of governments that want to introduce a more complex forward-looking cost base and telematics-based charging system. 

Industry is working hard to ensure that any new charging model is demand-driven, improves spending oversight, includes independent decision-making and does not impose more cost and red-tape for operators. Meanwhile, governments want to retain final say on all decisions. PAYGO must remain viable until a suitable replacement can be agreed.

Asking governments to increase charges by 2.5 per cent next year is the responsible course of action. ALRTA has also recommended that governments accelerate work on multi-year price pathing scenarios so we can return to fair cost recovery in a reasonable period without reducing necessary infrastructure spending or threatening the viability of road transport businesses.

Why should we care if government road user charges are too low? Because we should.

why should we care if government road user charges are too low?

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