Drawing on some initial discussions with the Australian Government and state and territory governments, the key potential types of benefits are summarised in Table 3 and Table 4. which illustrate the link between the reform components and the intermediate and final outcomes that could potentially flow from the reforms. Potential benefits that apply to both Reform option A and Reform option B 3 lists potential benefits that apply to both reform options. Table 3: Potential benefits that apply to both Reform option A and Reform option B Reform component Intermediate outcome outcome Lower maintenance costs, as maintenance works are more aligned Improvement in forward with an optimal lifecycle approach. planning of capital The maintenance cost savings are likely expenditure and to enable additional thereby maintenance programs increasing overall service levels for road users. Improved overall service levels and hence lower vehicle operating costs for Improvement in asset road users, as it may encourage capital Forward-looking cost management capability and expenditure allocation to projects in a estimate systems way that achieves greater long-term benefits for heavy vehicle road users. Greater productivity for road users, as it may encourage new vehicle investment Greater stability for even when capital expenditure on roads heavy vehicle road users is lumpy. compared to a PAYGO Lower adjustment costs for heavy approach vehicle road users, as they are less likely to change vehicle configurations. More transparent, Greater confidence by the transport The IPR determines prices predictable and industry in the charge-setting process, as in law charges for it enables more a more transparent and heavy vehicle road users predictable process. State/territory Lower adjustment costs for heavy vehicle governments able to road users. Greater price stability for transition to new charges heavy vehicle road users More sustainable charging system, as it between regulatory allows for a transition period. periods may Enhanced independent More cost-reflective charges, Heavy vehicle charges scrutiny of expenditure act to more encourage more efficient better reflect expenditures road use. categorisation Forward-looking cost base Under the proposed new regulatory framework for Reform options A and B, an FLCB involves road managers articulating to the IPR their forward plans for investment in maintenance and capacity expansion across all of the roads that they manage. As part of this process, road
Drawing on some initial discussions with the Australian Government and state and territory governments, the key potential types of benefits are summarised in Table 3 and Table 4. which illustrate the link between the reform components and the intermediate and final outcomes that could potentially flow from the reforms. Potential benefits that apply to both Reform option A and Reform option B 3 lists potential benefits that apply to both reform options. Table 3: Potential benefits that apply to both Reform option A and Reform option B Reform component Intermediate outcome outcome Forward-looking cost estimate Improvement in forward planning of capital expenditure and maintenance programs Lower maintenance costs, as maintenance works are more aligned with an optimal lifecycle approach. The maintenance cost savings are likely to enable additional thereby increasing overall service levels for road users. Improvement in asset management capability and systems Improved overall service levels and hence lower vehicle operating costs for road users, as it may encourage capital expenditure allocation to projects in a way that achieves greater long-term benefits for heavy vehicle road users. Greater stability for heavy vehicle road users compared to a PAYGO approach Greater productivity for road users, as it may encourage new vehicle investment even when capital expenditure on roads is lumpy. Lower adjustment costs for heavy vehicle road users, as they are less likely to change vehicle configurations. The IPR determines prices in law More transparent, predictable and charges for heavy vehicle road users Greater confidence by the transport industry in the charge-setting process, as it enables more a more transparent and predictable process. State/territory governments able to transition to new charges between regulatory periods Greater price stability for heavy vehicle road users Lower adjustment costs for heavy vehicle road users. More sustainable charging system, as it allows for a transition period. Enhanced independent scrutiny of expenditure categorisation Heavy vehicle charges better reflect expenditures More cost-reflective charges, may act to more encourage more efficient road use. Forward-looking cost base Under the proposed new regulatory framework for Reform options A and B, an FLCB involves road managers articulating to the IPR their forward plans for investment in maintenance and capacity expansion across all of the roads that they manage. As part of this process, road
consultation_ris_-_hvrr_phase_2_-_independent_price_regulation_of_heavy_vehicle_charges.docx