Truck charging: NSW lays down the gauntlet …

At a strategic level, the big news in this Master Plan is that the NSW Government has finally come out in public and done what almost everyone’s been expecting for some time.

This draft Master Plan is NSW’s open declaration that the State is seeking to act as the ‘pace-setter’ for a shift to ‘direct charging’ for heavy vehicles in Australia.

The Master Plan highlights that full duplication of the Hume Highway between Melbourne and Sydney is on track to be completed by mid-2013.

That means that the road will soon be almost completely suitable for use by B-Triples, Super-B-Doubles and ‘Smart Double-As’ (a road train with a new generation dolly that vastly improves dynamic performance).

The draft Master Plan proposes that “we will investigate options to allow higher productivity vehicles to use the Hume Highway under a direct charging arrangement. As part of this work, we will seek to work with the Victorian Government on a potential HPV route from Sydney to Melbourne.”

And the Government appears to be trying to take a gently, gently approach – at least at the start.

The draft Master Plan comments that, in order to run HPVs on the Hume, “only specific enabling works such as driver rest areas and trailer change-over areas” will be required.

It then explains: “Under the proposed arrangement, HPV operators who benefit directly from these enabling works would contribute towards the cost of these.” (Emphasis added).

That’s a much milder approach than many were expecting.

Many people in industry have been expecting that the NSW Government will be willing to offer HPV access on the Hume, and many have expected that it would come at a price. There’s been some interesting speculation about how high that price might be.

Being asked to pay for more space at rest areas, some improvements to break-down lanes, some improved intersection geometry, modified traffic signals, and some break-up pads is a much better deal than what some industry leaders had feared.

But perhaps that gentle approach is because this is just the start of something much bigger …

… direct charging for all heavy vehicles, on all routes?

Chapter 10 of the draft Master Plan is where you’ll find the really hard question: where’s the money coming from?

In that chapter, the Government spells out a number of possible strategies for funding major capital investment and on-going costs in the transport network. Apart from giving too much airtime to the perpetual complaints of the rail industry, in the main, the Master Plan discusses honestly and directly all the possible ways that any State government can possibly raise funds.

Time and time again, the Master Plan keeps coming back to the need for ‘direct charging of road users’.

And although the plan is looking for improved charging from all vehicles, there’s no denying that trucks are definitely a key focus.

The draft Plan states that “[t]he potential timeframes for delivering direct charging are:

  • In the short term, trials of the preferred road tolling option on the Sydney motorway network and distance charging of selected heavy vehicles on key freight routes (and potentially all routes)
  • In the medium term, distance charging for all heavy vehicles on all routes
  • In the longer term, seek to directly align the charge (based on mass, time, distance or location) applied to all vehicles with their frequency of use of the road network. “

(Emphasis added)

Clearly, there are going to be interesting – even challenging – discussions ahead.

The Master Plan is full of very positive statements which indicate that the NSW Government has ‘got the message’ on some key industry requirements: you have to treat the transport industry like we are customers of the road network; you have to solve the last mile problems; you have to provide a genuine service to us before we’d even think about discussing your ‘beaut new ideas’ about charging.

These are welcome signs that the NSW Government is looking to find some real common ground, even though what they’re talking about is going to be a worry to many members.

But there are also plenty of signs that the Government has been listening closely to the NSW Treasury. We really need to be on our toes.

… watch out, here comes NSW Treasury

Shortly after the O’Farrell Government was elected, they commissioned two major reviews of the State’s budget position, fiscal strategy and public administration.

The most well known of these, the Commission of Audit lead by Kerry Schott, declared that NSW’s very high spending on road maintenance appears to be driven by road freight activity. Schott suggested that the Government should be looking at heavy vehicle charging.

The second report was the kicker. The NSW Financial Audit lead by Michael Lambert devoted an entire chapter to the need to implement direct charging for the use of the roads, and it put heavy vehicles at the absolute head of the queue.

In the Transport Master Plan, the Government reveals why they found Michael Lambert’s report so very interesting: “The NSW Financial Audit 2011 (‘the Lambert Report’) estimates that replacing the existing fuel excise and registration charges with efficient heavy vehicle road pricing could raise over $1 billion per year for NSW.”

Now, that’s not necessarily a frightening number.

Across the entire nation, in very rough figures, the trucking industry pays a combined total of around $3 billion per year to all the various governments.

NSW has about one third of the nation’s landmass, it has one third of the economy and one third of the population. You can easily imagine how the NSW Government might talk itself into believing that it truly deserves to bring home one third of the current total national revenue from the trucking industry.

But is the Government seriously planning to ask the other States, and the Commonwealth, to ease back on the industry? Are they hoping to earn more from the trucking industry without increasing the total national government-related cost burden on industry?

The Lambert Report certainly talked about replacing the current system, so perhaps that is what they hope to achieve.

But what if the other States don’t agree? What if they won’t give up what they’ve currently got?

Well, sadly, the Lambert Report also explicitly recommends that the NSW Government should: “Consider means of accelerating reforms of heavy vehicle road pricing, including unilateral implementation of state-wide road usage prices for heavy vehicles operating in NSW.”

(Recommendation 13.10; NSW Financial Audit 2011).

That doesn’t sound very much like replacing the current system. It sounds as if NSW’s fallback position might be to simply scoop up more for themselves, on top of what the industry pays to other jurisdictions and to the Commonwealth. If that’s the plan, it’s simply unacceptable.

Before the NSW Government moves to begin any kind of discussion with industry, we need to see NSW disavow any intention of ever unilaterally imposing new ‘State-wide road usage prices’ on top of the current national charges and the fuel tax.

We’ve been down that road before in this country. It did not end well.

… ‘CRRP’ is back, bigger and stronger than before

Meanwhile, the feasibility study of the ‘COAG Road Reform Plan’ was approved by COAG in July.

Flowing from that approval, the project has changed its name, and somewhat broadened its scope, to become the ‘Heavy Vehicle Charging and Investment Reform Initiative’.

Importantly, the Project Board has been re-built. It now has an 11 person Board. It’s no longer just State Transport Departments and Road Agencies. In fact, several Road Agencies have dropped out.

Instead, the new Board has several State Treasury representatives.

The NSW government has taken two seats on the Board – and it’s the only jurisdiction to do so. One NSW Board member is a senior officer from Transport for NSW who’s been intimately involved in producing the Transport Master Plan. The other NSW Board member is a Deputy Secretary from NSW Treasury.

The HVCI Board has just announced the appointment of their independent Chair: it’s a bloke called Michael Lambert … … Yes, he’s the same fellow who’s told Premier O’Farrell that there are one billion reasons why NSW should be keen to support a new form of heavy vehicle charging.

Coming so soon after the release of the draft NSW Transport Master Plan, there will be some who will view this appointment cynically: is this a national committee where NSW has three out of 11 votes?

That would be the wrong reaction. While he’s no soft touch, the industry is better off having Mr Lambert ‘inside the tent’ and leading the work that may produce a national solution, rather than possibly assisting the NSW Government to think about ‘going it alone’.

Bottom line: the ‘direct charging’ debate is back with a vengeance.

Government has seriously lifted their game, and they’re bringing out the big hitters to lead their discussions with us.

Our National Council and other industry leaders will need to be on their toes in the discussions that are going to happen in the year ahead.

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