Sep 25, 2008

Interstate Road Transport Charge Amendment Bill (No2) 2008 – Second Reading

Transport Charge Amendment Bill (No2) 2008 – Second Reading


I move that this bill be now read a second time.

The purpose of the Interstate Road Transport Charge Amendment Bill 2008 is to help restore uniformity to heavy vehicle registration charges throughout Australia.

The Bill enables nationally agreed new heavy vehicle registration charges to be applied to heavy vehicles registered under the Australian Government’s voluntary Federal Interstate Registration Scheme, known as FIRS.

Operators may choose to register their heavy vehicles under FIRS as an alternative to state or territory registration. Current FIRS registrations represent around 3% of total heavy vehicle registrations in Australia.

It is one of two bills to implement the 2007 Heavy Vehicle Charges Determination, which sets a new road user charge and new heavy vehicle registration charges for heavy vehicles throughout Australia. The Determination was unanimously agreed by transport ministers at the Australian Transport Council meeting in February 2008.

That Determination delivers cost recovery – it ensures the heavy vehicle fleet pays its way for its share of road infrastructure costs incurred by Government.

Recovery of road expenditure associated with the heavy vehicle industry is achieved through a combination of a fixed registration charge, collected by the states and territories, and a road user charge collected by the Commonwealth through the Fuel Tax Act 2006.

This Bill deals only with the registration charges for FIRS registered heavy vehicles.

The registration charges have been implemented by all states on 1 July 2008. This leaves only FIRS vehicles and heavy vehicles registered in the ACT and the NT currently operating on a different set of charges.

The Northern Territory is currently introducing the new national charges into their Parliament with commencement expected before the end of 2008. The timing for implementation by the Australian Capital Territory Government rests on the passage of the Road Charges Legislation Repeal Bill (No. 1) 2008.

The Bill will enable FIRS charges that are consistent with state and territory registration charges.

National consistency in heavy vehicle charges and regulation is essential for our national economy. There are approximately 365,000 heavy vehicles operating in Australia and industry needs to be certain that it can operate nationally, without excessive red tape or confronting access issues at state borders.

This revised Bill also addresses key concerns raised in March 2008, namely that the Australian Government should not be required to implement registration charges only agreed by the Australian Transport Council.

This new Bill provides the Australian Government the flexibility to implement heavy vehicle charges for FIRS registered vehicles that are consistent with the Government’s road transport reform agenda.

Under FIRS legislative arrangements, all FIRS registration charges are returned to the states and territories. In 2007-08 more than $54million was returned from the FIRS charges to be spent on road maintenance.

It is a legislative requirement that all jurisdictions supply the Commonwealth with audited reports confirming the FIRS revenue had been spent on road maintenance.

The principle of cost recovery from the heavy vehicle industry for road construction and maintenance costs, incurred through the collection of heavy vehicle charges, has been supported by successive Governments at Commonwealth as well as state and territory levels.

In a speech delivered on 28 June 2007 entitled The Coalition Government’s Transport Reform Agenda, the then Federal Transport Minister and Leader of the Nationals said:

The National Transport Commission will develop a new heavy vehicle charges determination to be implemented from 1 July 2008.

The new determination will aim to recover the heavy vehicles’ allocated infrastructure costs in total and will also aim to remove cross-subsidisation across heavy vehicle classes.”

The current registration charges levied for FIRS vehicles do not meet this criteria. They were developed in 2001 and provide for significant subsidies to the heaviest trucks in the fleet.

This cross subsidy was confirmed in the December 2006 Productivity Commission Report into Road and Rail Infrastructure Pricing – a report endorsed by the previous Government.

In April 2007 the Council of Australian Governments, chaired by the former Prime Minister, directed that as part of an overall transport reform package, Australian Transport Ministers should require the National Transport Commission to prepare a new heavy vehicle determination.

That determination was to deliver revised charges for introduction in 2008, which fully recovered the heavy vehicle industry’s share of aggregate government road expenditure, to index those arrangements so as to not lead to further under recovery, and to remove cross subsidisation across heavy vehicle classes.

During 2007, the National Transport Commission undertook a comprehensive consultation process which informed its final recommendations.

A full consultation process was undertaken on the draft Regulatory Impact Statement. This process involved written submissions, provision of industry briefings and a series of focus group consultations with industry, trade unions, state and territory governments, peak industry associations and freight customers.

As a result of these consultations, the National Transport Commission made a number of changes to its recommendations, which were discussed with industry and jurisdictions.

This resulted in a key industry concern being addressed through the introduction of new a multi-combinational vehicle charge for B-double, B-triples and road trains and differentiated trailer charges to maximise vehicle fleet flexibility.

The Determination proposed by the National Transport Commission meets COAG’s request and recommended a new set of registration charges which rebalance the relative contribution of different heavy vehicle classes.

These new charges will result in larger trucks such as B doubles and road trains, paying more in registration charges. This is a clear decision, as required by First Ministers, to remove the subsidies for these vehicle configurations. However, to assist the industry adjust, these increases will be phased in over three years.

The new charges will also result in a reduction in charges for smaller trucks.

These changes better align charges to the impacts of those vehicles on our roads.

The new heavy vehicle charges are one component of the Rudd Labor Government’s broader heavy vehicle productivity and safety agenda.

The Rudd Government maintains its commitment to supplement the Determination with a $70 million, four year Heavy Vehicle Safety and Productivity Package that will fund:

  • The construction of more heavy vehicle rest stops along our highways and on the outskirts of our major cities to assist truck drivers rest ; and
  • Trials of black box technologies that electronically monitor a truck driver’s work hours and vehicle speed.
  •  Bridge strengthening projects and upgrades to linkages between existing Auslink freight routes.

The Government has consulted with industry and state and territory Governments to determine the best combination of projects for the use of the $70 million package.

That package can only be funded following the passage of this bill and the Road Charges Legislation Repeal and Amendment Bill 2008.

Since taking carriage of an issue that we inherited from the previous Government, the Government has been carefully listening to the views of the industry.

Our decision to implement the $70 million safety and productivity package, and to delay the implementation of the road user charge until 1 January 2009 were taken after consultations with industry.

The heavy vehicle industry needs to pay its fair share of road construction and maintenance costs.

It is also important that the very largest trucks pay their full share and that they are no longer subsidised by smaller trucks.

Equally important is that the amendment before the Parliament will enable charges for FIRS registered vehicles to be made consistent with charges that have applied to some 95% of Australia’s heavy vehicle fleet since 1 July this year.

The new charges will be fairer to both those in the industry and to the wider community. Importantly, the new charges deliver the Council of Australian Governments’ requirement for full and ongoing cost recovery.

The new charges will encourage state and territory Governments to facilitate access to the road network to higher productivity heavy vehicles.

This, in turn, would make better use of the nation’s infrastructure – a key element of the Rudd Labor Government’s plan to raise productivity, fight inflation and maintain economic growth.

I commend the Bill to the House.