The plan makes recommendations to alter road pricing and improving bus contracts for operators and services for commuters.
Infrastructure Australia’s (IA) 15 Year plan was released in early 2016, and the federal government has this week supported the majority of IA’s recommendations as guidelines.
The Turnbull Government has stated support for 69 of the 78 recommendations made by IA, as well as 14 of the 15 projects on IA’s Infrastructure Priority List.
Two of the 69 recommendations which the government agrees with are in regards to public transport contracts and road pricing.
These issues have been heavily discussed within the industry recently, most prominently at the Bus Industry Confederation National Conference this year.
As the industry urges governments to consider the social impact of its process for deciding who is awarded each contract, IA says governments should be aiming to “improve customers’ experience by exposing delivery to contestable supply and selecting the best operator to provide services”.
“The future shape and operation of bus and rail networks across the country needs to consider options to lower the cost of provision and improve the quality of services.
“Experience has shown that franchising public transport can reduce operating costs by between 20 and 30 per cent and as much as 50 per cent in some circumstances, mostly driven by the incentive framework placed on franchised operators to deliver services more efficiently.
The government’s response was of support for the recommendation, nothing that this is an issue mainly for state and territory governments to deal with.
“The Australian Government supports private sector involvement in infrastructure delivery, where cost-effective, noting that the provision of public transport services is primarily a matter for state, territory and local governments.
“Where appropriate, franchising should be used to support the delivery of public transport services.”
IA’s approach to road pricing would appear to be in line with that of the industry, where everyone (including light vehicles) pays for their use of the road, rather than funding primarily coming from the heavy vehicle sector.
“The Australian Government should initiate a public inquiry, to be led by a body like the Productivity Commission or Infrastructure Australia, into the existing funding framework for roads and development of a road user charging reform pathway,” IA said in its original recommendation.
Additionally, IA specifically recommended a complete reform of the heavy vehicle pricing scheme overall.
“Federal, state and territory governments should commit to the full implementation of a heavy vehicle road charging structure in the next five years.
“This reform must include the removal of all existing registration and usage charges under the PayGo model and the introduction of supporting regulatory and investment frameworks.”
A response to IA from the Department of Infrastructure and Regional Development states that the government is already looking into a pricing scheme which incorporates all road users.
“The Australian Government is progressing work to investigate the benefits, costs and potential next steps of options to introduce cost-reflective road pricing for all vehicles,” the response reads.