Executive summary Background The Australian Government and territory and local governments fund the construction and maintenance Australia’s government-managed roads. heavy vehicles make up a small percentage (approximately 3%) of vehicles on the roads, they are responsible for a significant proportion of road construction and maintenance costs. Broader Vehicle Road Reform program In 2006, the Productivity Commission found that pricing and regulatory arrangements ‘current are hampering the efficient provision and productive use of road and rail infrastructure’ and recommended that governments pursue a reform program to improve efficiency and productivity within the road sector (PC 2006). To address problems with the current heavy vehicle charging and investment arrangements, the Transport and Infrastructure Council agreed in May 2015 to progress Heavy Vehicle Road Reform (HVRR) and agreed on a reform road map (Figure ES1) that set out a four-phase reform program. The road map outlines reform steps along the path to full market reform of heavy vehicle investment and charging arrangements. The road map builds on joint work undertaken by governments on heavy vehicle road reform between 2007 and 2014. Figure ES1: Overview of the heavy vehicle reform road map Under HVRR, the proposed state’ would result in an independent regulator providing full ‘end economic regulation, giving oversight of pricing and road investments. This would turn the provision of heavy vehicle road infrastructure into an economic service, where feasible, and the framework would be similar to those currently used in other sectors, such as water, energy and telecommunications. In addition, the end-state reforms would be expected to result in the following outcomes: Investment coordination and planning are improved. Road services are delivered to defined standards according to agreed investment plans. Heavy vehicle road users pay charges that more directly reflect the costs they impose on the road network. A more direct link is established between heavy vehicle charging revenue and funds available for road investments. The overall aim is to deliver the roads needed for strong freight productivity growth in a transparent, equitable and affordable manner to have the right truck on the right road at the – right price. Reforms under consideration in this RIS
Executive summary Background The Australian Government and territory and local governments fund the construction and maintenance Australia’s government-managed roads. heavy vehicles make up a small percentage (approximately 3%) of vehicles on the roads, they are responsible for a significant proportion of road construction and maintenance costs. Broader Vehicle Road Reform program In 2006, the Productivity Commission found that ‘current pricing and regulatory arrangements are hampering the efficient provision and productive use of road and rail infrastructure’ and recommended that governments pursue a reform program to improve efficiency and productivity within the road sector (PC 2006). To address problems with the current heavy vehicle charging and investment arrangements, the Transport and Infrastructure Council agreed in May 2015 to progress Heavy Vehicle Road Reform (HVRR) and agreed on a reform road map (Figure ES1) that set out a four-phase reform program. The road map outlines reform steps along the path to full market reform of heavy vehicle investment and charging arrangements. The road map builds on joint work undertaken by governments on heavy vehicle road reform between 2007 and 2014. Figure ES1: Overview of the heavy vehicle reform road map Under HVRR, the proposed ‘end state’ would result in an independent regulator providing full economic regulation, giving oversight of pricing and road investments. This would turn the provision of heavy vehicle road infrastructure into an economic service, where feasible, and the framework would be similar to those currently used in other sectors, such as water, energy and telecommunications. In addition, the end-state reforms would be expected to result in the following outcomes: Investment coordination and planning are improved. Road services are delivered to defined standards according to agreed investment plans. Heavy vehicle road users pay charges that more directly reflect the costs they impose on the road network. A more direct link is established between heavy vehicle charging revenue and funds available for road investments. The overall aim is to deliver the roads needed for strong freight productivity growth in a transparent, equitable and affordable manner – to have the right truck on the right road at the right price. Reforms under consideration in this RIS