House of Representatives

Second Reading Speech

Mr Albanese (Minister for Infrastructure, Transport, Regional Development and Local Government)

I move:

That this bill be now read a second time.

The purpose of the Road Charges Legislation Repeal and Amendment Bill 2008 is to restore uniformity to heavy vehicle registration charges in Australia and to update the heavy vehicle road user charge to ensure the Australian heavy vehicle fleet pays its way for its share of road infrastructure costs incurred by governments.

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.

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.

The bill repeals the Road Transport Charges (Australian Capital Territory) Act 1993 as well as making consequential amendments to the Road Transport Reform (Heavy Vehicle Registration) Act 1997 to remove links to the former act.

The bill also amends the Fuel Tax Act 2006 to set the road user charge rate at 21c per litre, in line with the 2007 Heavy Vehicle Charges Determination. Amendments to the Fuel Tax Act will also establish a mechanism to allow adjustment of the road user charge by regulation. These regulations would be subject to review by this parliament in the normal manner.

This bill does not deal with changes to registration charges under the Federal Interstate Registration Scheme. These charges are dealt with in the accompanying Interstate Road Transport Charge Amendment Bill (No. 2) 2008.

There are approximately 365,000 heavy vehicles operating in Australia.

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.

In April 2007, the Council of Australian Governments required the Australian Transport Council to devise a new charges determination for implementation on 1 July 2008 that:

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fully recovers infrastructure costs from the heavy vehicle industry;

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ends cross-subsidisation between heavy vehicle classes; and

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indexes charges to ensure costs continue to be recovered.

The House should note that, in a speech given 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.

In developing the 2007 Heavy Vehicle Charges Determination, the National Transport Commission proposed a revised road user charge and amended registration charges that remove cross-subsidies between the smallest heavy vehicles in the fleet and the larger trucking combinations. These changes would address a $100 million underrecovery of heavy vehicles' share of road construction and maintenance expenditure.

After consulting with industry, the government decided to delay the increase in the road user charge until 1 January 2009.

The revised heavy vehicle charges bring a new level of fairness to the recovery of road construction and maintenance costs from heavy vehicles.

These revised charges remove the unfair registration charge cross-subsidies that see operators of small heavy vehicles subsidising the road construction and maintenance costs attributed to the largest heavy vehicles.

It is unreasonable to expect operators of small heavy vehicles to subsidise the road costs of the largest heavy vehicles. Those opposing measures to implement revised national heavy vehicle charges are condemning operators of small heavy vehicles to a continued and unfair burden.

Instead, by ensuring that heavy vehicles pay their fair share of road construction and maintenance costs, we are ensuring that the taxpayer is not left to foot the bill for the damage and wear and tear that heavy vehicles do to our roads. And neither is the Australian Capital Territory.

All states have now implemented the revised heavy vehicle registration rates, with the Northern Territory currently introducing the new national charges into their parliament.

The Commonwealth, however, has introduced legislation today to allow for new registration charges for Federal Interstate Registration Scheme vehicles. This is despite the fact that these vehicles represent just under three per cent of heavy vehicles and that registration revenue from these vehicles is returned to states and territories in full.

The Road Charges Legislation Repeal and Amendment Bill will also repeal legislation that is currently preventing the ACT government setting its own heavy vehicle registration charges.

A key element of the Inter-Governmental Agreement for Regulatory and Operational Reform in Road, Rail and Intermodal Transport entered into between the Commonwealth of Australia and the states and territories requires that the Commonwealth 'repeal any road transport legislation that has been enacted by the Commonwealth for the ACT as soon as practicable'.

Repealing the act will enable the ACT to implement the revised heavy vehicles charges determination within their legislative framework in the same manner as the other states and territories have already done. This will bring Australia closer to uniform national heavy vehicle registration charges.

The Road Charges Legislation Repeal and Amendment Bill also amends the Fuel Tax Act 2006 to increase the road user charge from 19.633c per litre of fuel to 21c per litre.

I would like to take this opportunity to clearly explain that this measure does not reintroduce indexation of the fuel excise tax.

Truck operators do not pay fuel excise in the way that the rest of Australian motorists do. Like all motorists they pay 38.14c per litre at the bowser for their fuel; however, they receive a fuel tax rebate of 18.51c per litre. The balance (19.63c per litre) represents the road user charge. This is not a tax-instead, it is a mechanism to recover costs from the industry for its share of road infrastructure costs.

Nor does this bill implement indexation of the road user charge.

The 2007 heavy vehicle charges determination included recommendations for a mechanism to allow automatic adjustments to the road user charge to minimise the impact of possible future price shocks that have accompanied heavy vehicle determinations to date.

The bill allows the government to implement a mechanism to automatically adjust the road user charge by regulations. These regulations are not protected from disallowance. Should the government of the day decide to declare regulations to adjust the road user charge, the parliament will have the opportunity to scrutinise these regulations at the time.

The increase in the road user charge proposed by this bill ensures that heavy vehicles over 4.5 tonnes pay their fair share of road construction and maintenance costs. No more and no less.

If heavy vehicles do not pay their fair share of road construction and maintenance costs, these costs must be met by the rest of the community.

In addition, ongoing underrecovery of heavy vehicle charges provides a strong disincentive for states and territories to allow wider access to their road networks for high-productivity vehicles.

This puts at significant risk any further expansion of high mass limits networks and the ability of the heavy vehicle industry to innovate and develop new, safer and more productive vehicles to take advantage of these networks.

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:

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the construction of more heavy vehicle rest stops along our highways and on the outskirts of our major cities to assist truck drivers rest;

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trials of black-box technologies that electronically monitor a truck driver's work hours and vehicle speed; and

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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 from the passage of this bill and the Interstate Road Transport Charge Amendment Bill (No. 2) 2008.

In closing, I would urge those opposed to these measures to take a moment to seriously consider the impact on the 25 per cent of those heavy vehicle operators who stand to benefit from reduced registration charges as a result of the introduction of revised heavy vehicle charges.

These operators will no longer have to subsidise the road construction and maintenance costs of the biggest heavy vehicles.

And we must also remember that operators of the biggest heavy vehicles stand to gain from revised charges too. By ensuring that they pay their fair share of road construction and maintenance costs, states and territories are far more likely to open up their networks to these higher mass vehicles because they will be assured that they will recover the costs of the damage that these vehicles will do to these new networks.

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 which is a key element of the Rudd Labor government's economic reform plan to raise productivity, fight inflation and maintain economic growth.

I commend the bill to the House.