Roads dilemma puts a heavy burden on regional WA

Roads dilemma puts a heavy burden on regional WA


Heavy vehicle operators pay large registration fees and excise on fuel which together are calculated to theoretically add up to the additional amount spent on roads across Australia as a result of wear from trucks.


HEAVY vehicle operators pay large registration fees and excise on fuel which together are calculated to theoretically add up to the additional amount spent on roads across Australia as a result of wear from trucks.

Why then, do we consistently hear complaints about the quality and safety of roads in this State?

In some cases this impact on the road is the result of a large freight task on a single route.

Depending on the roads being used, a single business may have a very major impact on the cost of maintaining roads in the local area.

There are plenty of examples around Western Australia where an individual business adds hundreds of thousands or in some cases millions of dollars per year to the road maintenance costs in the shire.

The critical question is who should bear these costs?

There are not many choices.

Through fuel excise and other motoring related national taxes, the WA motoring public contributed nearly $3 billion to the Commonwealth last year.

Of this, only about 45 cents in the dollar was provided to the State and individual local governments to upgrade and maintain roads across WA.

While fuel excise rates are indexed twice a year, there is no formal agreement or direct link between the revenue raised by the Commonwealth and that which is passed on to WA State and local governments for roads.

When more freight is moved in WA, it does not necessarily mean that there is more funding from the Commonwealth to maintain roads.

Similarly, the State government collected about $946 million in vehicle licence fees last year - all of which is used to maintain and upgrade WA roads.

However, less than a quarter of this was used to maintain or upgrade roads that are the responsibility of local governments.

Most is directed to fund maintenance of State highways and freeways.

When you consider local governments maintain 80pc of the State's road network and face a backlog of renewal and maintenance requirements, it's no wonder that local governments are feeling the pinch.

If it were not for the $500m contributed by ratepayers each year, WA's road network would be in a significantly worse condition.

So should ratepayers pick up the additional road maintenance costs that arise as a result of increased road freight?

Even if this was considered to be fair, in much of WA it is not practical.

Take for example a typical shire in the pastoral and mining region of the Mid West.

With a permanent population of a few hundred people and about 1000 kilometres of local government-managed roads, each ratepayer is responsible for funding four or five kilometres of road.

This is about 100 times as much as the ratepayer of a regional city and 1000 times more than a ratepayer in an inner metropolitan area.

In these regions, which generate significant export earnings for WA and provide important employment opportunities, it is typical that two-thirds of the council's annual operating expenditure is spent on roads, with the majority of this funded by Federal and State Government grants.

But an increase in maintenance required as a result of heavy vehicle movements is not accompanied by an equal increase in external funding.

This can prove crippling for a council's budget.

So local governments have had to look elsewhere to keep their roads in a safe condition without bankrupting local residents.

Road User Cost Recovery refers to a cash or in kind contribution from those industries generating large freight tonnages towards maintenance and upkeep of local roads affected by their extraordinary use.

These are specific arrangements between individual local governments and local industry.

These have been in existence for a long time and generally work well until one or two individuals want to be exempt.

This is then seen as providing an unfair advantage and in absence of strong legislation the arrangements may break down, particularly when considering road user-charging councils are very conscious of potential impacts on local business, economic development and support local jobs growth.

Right now, in specific situations where there is a major impact for specific businesses, recovering the extraordinary costs from the business generating the freight is arguably the least worst solution.

What would be a better solution?

In our view, until an effective heavy vehicle road user cost recovery arrangement is in place across Australia with the revenue being returned to the road managers, then a larger proportion of taxes collected from motorists, including diesel fuel excise, must be returned to maintain and upgrade roads in WA.

A larger proportion of the registration fees collected by the State government should be available to maintain local government roads.

The regulatory and policy settings should support simple and effective ways to recover the costs of extraordinary road wear from those whose business operations trigger these costs.

Competitive freight is a key success factor in many of WA's most important industries and business, together with all spheres of government must come together to work on the right solution.


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