Wednesday, 17 August 2011

Australian debate on road pricing continues

From an age when the only road pricing seriously discussed in Australia was tolls on new roads, things have come a long way. The Henry Tax Review under the last Labour majority government floated a range of option to reform motoring taxes, which has been reflected in the latest tax discussion paper under the current Labour minority government.  Even the RACV has discussed the end of fuel tax in favour of some form of road pricing, while the RACQ is not dismissing congestion charging outright.

However, with the PM denying congestion charging will be introduced, a report from the Herald Sun newspaper in Melbourne, has come from Infrastructure Minister, Anthony Albanese, supporting consideration of road pricing, this follows on from his discussion paper released late last year about the future of cities which includes consideration of congestion charging.

“We have to also look at, not just congestion charging, but also how new technology can be used in terms of charges,'' he told an Australian Financial Review forum.

"New technology means we can have distance tolling, particularly where it comes to freight.”

So once again, the Australian Federal Government appears warm toward heavy vehicle distance charging. In addressing the Roads Australia Summit he gave support for the peak charges now levied on the Sydney Harbour Bridge toll, given it is a form of congestion pricing. He also reportedly supported private toll roads as well, “pointing out that Sydney's earliest roads were tollways” saying that taxpayers have still done well out of bankrupt toll roads like the Cross City Tunnel in Sydney as the private sector bore the losses.

My pick is that whilst the Federal Government is keen to encourage the states to introduce congestion pricing, it is itself keen to build a consensus around distance charging for trucks. The economic case for this may be quite compelling if the right analysis is done around the effects on road maintenance costs, externalities and the elimination of cross-subsidies within the sector.

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