BIC response to PAYGO reform

By: Chris Thompson


Bus Industry Confederation says PAYGO reform needs to be friendlier to bus industry

BIC response to PAYGO reform
Apps says the benefits of bus travel outweigh the wear-and-tear buses cause for roads, and argues buses shouldn’t be charged as heavy vehicles

As the National Transport Commission (NTC) seeks to reform the pay-as-you-go (PAYGO) heavy vehicle charges system, Bus Industry Confederation (BIC) executive director Michael Apps says the bus industry should not be paying so greatly for road maintenance.

Currently, buses and other heavy vehicles – mainly trucks – are charged roughly the same rates for their differing road use: approximately 26 cents per litre of diesel used.

"The Bus Industry Confederation has been a long-time supporter of heavy vehicle charges that reflected the cost of using the roads with the view that this should be the stepping stone to a comprehensive road pricing regime for all road users," Apps says in his response to an NTC discussion paper.

He argues buses and other heavy vehicles should be charged differently for road use, as they have different effects on aspects such as the environment, public transport, and the economy.

The discussion paper notes around 19 per cent of road infrastructure cost is incurred by heavy vehicle road use, but Apps says that amount would be lower than ten per cent if positive factors such as the lower number of cars were accounted for.

"Road pricing reform to improve the efficiency of road use in Australia must be about all road users meeting all the costs attributable to their travel choices, not about HVs meeting just the infrastructure costs attributed to their road use."

This pricing scheme was left over from the ‘90s and needs to be re-evaluated, says Apps.

"The Deputy Chair of the National Road Transport Commission from the time the inaugural set of heavy vehicle road user charges were developed and implemented, John Stanley, has advised the BIC that this initial set of charges from the early 1990s was only ever intended to be a temporary solution to HV road pricing."

"About 25 years later, however, they are still very substantially intact."

Apps says the benefits of bus travel outweigh the wear-and-tear buses cause for roads, and argues buses shouldn’t be charged as heavy vehicles.

"The BIC has called in the past for all buses to be excluded from the Heavy Vehicle regime all together, based on the external benefits that bus travel provides in a road wear, environmental and social benefits basis.

"The exclusion of buses from HV charging would establish the principle that externalities are a relevant factor and component of current HV charging and any future road pricing arrangement, moving the heavy vehicle pricing discussion from the 1990’s to 2016 in one significant step."

The NTC paper also brings up ring-fencing, which would see a new body formed to managed the funds put forward from PAYGO charges back into heavy vehicle infrastructure.

"The general idea of ring-fencing is not supported by the Bus Industry Confederation, given that heavy vehicles are only 19 per cent of road expenditure and a smaller proportion of total costs," Apps says.

The submission period for responses to the discussion paper has ended, meaning the NTC will now likely take steps toward actioning a reform. 

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