In the two months ago since the national charges decision for 2012-13 was taken, National Council has been working hard at persuading governments to take some of the pain away.
Our current efforts are focusing on road trains. And the reason for that is because, using the NTC’s own figures, it is clear that the result for road trains is a genuine problem.
As shown in the NTC’s figures, state and federal governments, combined, can expect to earn $34,858 per annum from each Double Road Train in Australia. But the NTC has calculated that the direct impact of these vehicles onto the road network is only $21,097. Even allowing for a contribution to all the overheads of the State road networks, the NTC’s assessment of the true ‘cost to government’ rises to just $24,894.
For Triple Road Trains, the NTC predicts that governments can expect to earn $53,984 per vehicle, but the NTC’s calculations are that governments need to earn only a minimum of $40,982 and, at most, $46,734 from these vehicles.
It has to be emphasized that these aren’t our figures. They come straight out of the NTC’s own work. There is no tinkering or editing whatsoever in these figures.
And as that point has sunk in with some senior government people in the three other road train jurisdictions – NSW, SA and Queensland – the level of interest being expressed in ‘doing something to help’ road train operators has markedly improved.
We’re not expecting miracles. But for road trains, the game is not quite over yet.
NSW: Duncan Gay pledges to help
Last fortnight, the NSW Minister the Hon Duncan Gay gave a prepared speech which contained an explicit promise to help. Here’s an extract from part of his speech:
“… let me turn to the challenging issue of national heavy vehicle charges.
As you all know, the National Transport Commission recently advised Australian road and transport ministers that they were facing an under recovery of $144 million in heavy vehicle charges.
For state governments on the eastern seaboard experiencing tough times this amount of under recovery sent a shiver down the spine of every Treasury Official within a ten mile radius.
Advice from the NTC also indicated that the assumptions used to calculate the costs of the ‘wear and tear’ of heavy vehicle on our roads were on the conservative side.
In other words, the figure of $144 million could have been even greater and hence the new charges even higher.
Debates around the method used to calculate these charges have largely become circular arguments. It’s become a gunfight of Excel Spreadsheets at ten paces!
I’ll be frank; I don’t need the NTC or anyone else for that matter to tell me that there is under recovery happening in NSW – I just have to drive on some of our key roads.
I am however conscious of the impact of increased registration charges on small to medium businesses; notably road train operators.
As such, I’ve asked Transport for NSW to develop options for a financial assistance package.
Believe you me, extracting money out of NSW Treasury Officials for an assistance package was a real battle but it was one I was determined to win for industry. (Emphasis added)
Those last three paragraphs are one of the most explicit pledges from a politician, committing to do something to help, that I’ve seen in a long while. It’s pretty clear that the Minister is committed to winding back some of the hurt now facing our road train members.
In his speech, the NSW Minister also gave away a few secrets about the financial pressure that every government is under and the difficult negotiations inside government that a Minister has to grind through in order to do anything to help industry.
That’s something that our National Council has understood from the start. In every meeting they’ve had with various Ministers and officials over the past two months, our National Councillors have emphasised that we understand that governments need money to keep the road system going and that industry and government need to work together to create a sustainable system.
SA and Queensland: the bush watches and waits
Pat Conlon acknowledges the pain felt in the bush
During the past fortnight, South Australia’s Minister, the Hon Pat Conlon has held further meetings with our National Councillors and has personally invited the South Australian Farmers Federation to join these meetings and add their views to the debate.
The Minister’s shown a detailed knowledge of how much of SA’s agriculture is reliant on road trains, and how difficult it is for farming to pass on any cost increase into the export market.
A week ago, on Friday 18 May, the nation’s transport Ministers gathered in Adelaide for a meeting of the Standing Council on Transport and Infrastructure.
In the run-up to that meeting, Minister Conlon made a public commitment to discuss the recent charges decision with his colleagues. Minister Conlon most certainly kept that promise. We hope his resolve was strengthened by finding that he is not alone in his concerns about road trains.
Queensland reviews the evidence
In Queensland, the new Minister, the Hon Scott Emerson, has been taking a very thorough and methodical approach to the charges decision. After meeting with industry, and discussing the issues with the Ministers of other States, the Minister is considering his options.
Interestingly, those discussions are occurring at the highest level. Whatever the outcome, the new Minister isn’t simply rolling the arm over, and that’s good to see.
Round-up of other results
Fuel is now a done deal …
The Federal Budget, handed down in early May, locks the Commonwealth Government into proceeding with the 2.4 cpl increase in diesel tax. The Federal Minister, the Hon Anthony Albanese, has recently signed off the legal paperwork to make this happen.
… extra rest areas and bridge strengthening
The Federal Budget also committed the Commonwealth Government to a permanent funding program for rest-areas and stronger bridges, to the tune of $20 million per annum. Coupled with matching funds from the States, this should deliver noticeable improvements within a few years.
WA and NT confirm they’ll set their own rates
After announcing that they weren’t totally happy with the national decision in March, the governments of both WA and the Northern Territory quickly announced that they won’t implement the national registration charges.
Following the national meeting of Ministers on 18 May, that remains WA and the NT’s position.
A-Trailer result locked-in
Industry’s been disappointed by the fuel tax outcome, and by the way the NTC failed to disclose to industry the ‘$144 million under-recovery’ which has pushed this year’s increase up so high.
But that shouldn’t mean that we lose sight of the tremendous result on A-trailer charges.
All Southern and Eastern States are now preparing to cut this year’s A-Trailer fee by around $3,300.
That’s easily the largest cut to a national rego fee that’s ever been approved. In fact, it’s probably the only cut to a national rego fee that’s ever been asked for by Ministers.
It’s a great achievement and a lasting testament to a two-year campaign that has involved the whole industry.
Reviews of the NTC charges methodology
At their national meeting on 18 May, the nation’s transport Ministers agreed to release the National Transport Commission’s charging model. They’ve stated that they’re looking to:
“improve the transparency of the current charging arrangements and maximise the opportunity for industry engagement in reforms to the national system of charges”.
Ministers also directed the National Transport Commission to undertake:
“a comprehensive review of the heavy vehicle charging system, including the balance of charging mechanisms and a review of the assumptions and methodologies used to determine charges to ensure they are practical and fair. This review is to be completed by mid-2013.”
These decisions are very good news.
In the run-up to the recent meeting, the NTC was seeking permission from Ministers to commence a full national Charging Determination.
Our National President, John Beer, wrote to every Minister in the country, expressing our concern at this idea and suggesting that we need a period of ‘reconciliation’ between industry and the NTC, to address and, if all possible, remove all the misunderstandings, disagreements and, yes, sometimes distrust that has clouded this whole system. We pressed these points further in a series of meetings with Ministers and officials.
Our message was that trying to undertake the huge task of a full Determination without getting industry and the NTC back on the same page and working together more effectively was a recipe for creating real problems.
The decisions that Ministers have taken will provide a real opportunity for exactly the sort of ‘reconciliation’ that we’ve been advocating.
It doesn’t mean that there won’t be any increase to charges in 2013: there’s still the Annual Adjustment process to go through. But the threat of things getting truly messy has been taken away.
To their credit, even while pressing ahead with their request for a full Determination, the NTC has also been responding to industry calls for improvement. The Chairman of the NTC, Greg Martin PSM, and his CEO, Nick Dimopoulos, have taken part in some initial, frank and constructive discussions with industry about how this process works.
We’ll look forward to those discussions continuing, but without the pressure of having to deliver a full Determination at the same time.
Review of the NTC itself
As well as triggering a review of the current charging system, governments are also moving ahead with a review of the NTC itself.
In light of their commitment to establish the National Heavy Vehicle Regulator, as well as the National Rail Safety Regulator and the National Maritime Safety Regulator (all of which will kick off next year), Ministers have agreed that it’s time to review the roles and responsibilities of the NTC.
The review is also examining the roles and responsibilities of Transport Certification Australia, Austroads, the Australian Road Research Board, and the Rail Industry Safety and Standards Board.
It’s something that we’ve been waiting to see for some time now.
Our first submission to the Review Panel is being considered by our National Council this week.