April 2015 TRN UPDATE News and views from Australia and overseas on the transport funding reform debate Shortcuts Jakarta is moving closer to a Singapore-style electronic road pricing (ERP) scheme. Governor Basuki “Ahok” Tjahaja Purnama reportedly wants a pilot up and running before the end of this year. ! A new report prepared for the Bus Industry Confederation (BIC), Connecting Neighbourhoods: The 20 Minute City, says governments need to shift the focus on transport-oriented planning to the outer suburbs. ! The TRN will be making a submission on the final report on Australia’s competition policy www.competitionpolicyreview. gov.au - released by the Federal Government in March. Recommendation 3 of the Report has called for the introduction of cost-reflective direct road pricing, subject to the commensurate reduction in indirect charges and taxes on road users. Transurban to conduct road pricing study in Melbourne Toll road operator Transurban is taking the bull by the horns in the road usage charging (RUC) debate, announcing its own study to explore options for a more sustainable road funding model for Australia. Unveiling the initiative last month, Transurban CEO, Scott Charlton (pictured), said the Road Network Pricing Study would be conducted in Melbourne across the whole road network, using volunteers from Transurban’s customer base.# The exercise will trial various user-pays models including:# • a distance-based per-kilometre charge;# • an annual fixed costs per kilometre based on expected usage, and;# • a price per trip or charge to access the road network.# The study will also explore other models being employed throughout the world, including time-of-day pricing on the network and a charge for entering the CBD. Transurban will compare the impact of these models on existing funding sources of fuel excise and registration and gauge drivers’ preferences to the schemes.# Cont. page 4 1 April 2015 RUC in New Zealand: how it works When it comes to road usage charging, our cousins across the ditch are well ahead of the game compared to us here in Australia. New Zealand has had an RUC scheme in operation since 1978. It’s applied to vehicles over 3.5 tonnes, as well as all vehicles that do not run on petrol or petrol equivalents (ie. all diesel and diesel hybrid vehicles and electric vehicles, regardless of weight).# ! In 2012 the scheme underwent a major overhaul with the passing of new legislation aimed at simplifying and modernising it.# For heavier commercial vehicles (over 3.5 tonnes) an approved hubodometer or a # specified electronic distance recorder must also be fitted. # ! All the revenue collected from road user charges goes into the National Land Transport Fund and the Regional Land Transport Fund. # ! ! One of the most significant changes was the assigning of a permanent RUC weight to all vehicles. (Previously, vehicle operators could nominate their own vehicle weights, creating an opportunity for rorting.)# © Dmitryp | Dreamstime.com - Mount Cook, New Zealand Photo Under the NZ scheme, vehicle owners must purchase a licence based on the vehicle’s assigned RUC weight.# For drivers of lightweight, two-axle diesel cars, utes and vans, a 1,000 kilometre licence costs $NZ58. # The licence must be displayed on the passenger-side front windscreen and the vehicle must be fitted with a distance recorder (in practical terms, this means a working odometer). As all national contributions to meeting road costs are met through fuel excises, RUC and motor vehicle licensing fees, a cost allocation model distributes these costs against each tax type and all classes of motor vehicle user. # ! The level of RUC paid is calculated to recover the assigned shares of fixed costs and road maintenance and renewal costs, with heavier vehicles paying progressively more towards the latter, applying a fourth-power rule as gross vehicle mass increases.# ! For more information on the New Zealand RUC scheme, visit the NZ Transport Agency website. 2 April 2015 Getting a RUC pilot off the ground: US experts coming to Sydney to explain how Norma Ortega from the California Department of Transportation and Jim Whitty from the Oregon Department of Transportation will discuss the paths their respective jurisdictions are taking to get RUC schemes from drawing board to live pilot.# In July this year, Oregon will launch a US-first - a pilot program involving 5,000 volunteer motorists who will pay a per-mile charge in lieu of gas tax.# Meantime, California - facing an annual $5.9 billion backlog in state highway repairs - has legislated to roll out a pilot scheme of its own by January 1, 2017. # Ortega and Whitty will participate in a special RUC session with Transurban CEO, Scott Charlton, and NZ Transport Ministry Funding & Infrastructure Manager, Peter Carr, at the IRF Roads Australia Regional Conference for Asia and Australasia in Sydney on May 4. # The session will be chaired by D’Artagnan Consulting Managing Partner and international RUC expert, Jack Opiola.# © Diro | Dreamstime.com - Sunset Landscape Of Portland, Oregon, USA. Photo# Senior US transport agency leaders involved in the design and roll-out of road usage charging (RUC) pilots in Oregon and California will be speaking about the challenges and opportunities for trialling new road charging models at a major road industry conference in Sydney next month.# Oregon….blazing the trail for RUC in the USA ! “Some states are propping up their transportation funding with portions of their general sales taxes, while others are addressing it with the addition of new sales tax on everything from restaurant bills to haircuts,” he says.# But the solution, Opiola says, is much simpler and fundamentally appeals to the public’s sense of fairness.# “Put simply, the public believes it is more equitable for taxpayers to pay for infrastructure based on what they use, not on what they earn or what they own or drive,” Opiola says.# “If there is one advantage the transportation sector holds over other government programs that depend on income, property or sales taxes to fund their services, it is the ability for roadways to be self-funding through direct user fees.# Opiola has been working with a number of jurisdictions in the United States to implement RUC schemes, including Oregon, Washington, Indiana and California.# “It is a fairer, more equitable and sustainable system – the more you use, the more you pay.”# Across the US, states are looking at various options to meet the funding shortfall for road construction and maintenance, Opiola says. # Regional Conference in Sydney in ! For more information on the IRF - RA May, visit the Conference website. 3 April 2015 Transurban to conduct its own RUC study Cont. from page 1# Mr Charlton said that despite significant progress by state governments, traditional funding systems were outdated, unsustainable and unfair, and could not sustain the funding needed to address Australia’s transport infrastructure deficit.# fee approach – 57 per cent vs 31 per cent.# “Without further significant investment in infrastructure, everything we love about the liveability of our big cities is at risk,” he said.# _________________________# “Our congestion levels are heading to the levels of the world’s most gridlocked cities, with drivers in Sydney and Melbourne sitting in traffic for more than 120 hours a year by 2050.”# making a tangible Transurban’s decision to press on with its own road pricing study is underpinned by independent research it commissioned from EY Sweeny that found most city motorists favoured a userpays system rather than increased fees and higher petrol taxes to fund major road infrastructure - 60 per cent vs 15 per cent.# Twice as many motorists said a user pays system was fairer for all motorists than a flat- Mr Charlton emphasised that any funding model needed to make equity a core requirement on the basis that not everyone had a variety of transport options available to them.# ! “This is an exercise about industry helping to inform debate and contribution to progressing a sustainable and fair funding model.” Scott Charlton _________________________# “Reform is never easy but we need to continue the debate and make sure we look at all the options with an open mind,” Mr Charlton said.# “This is a conversation that industry, government and everyday Australians need to be having if we do not want to be living in cities where sitting in traffic jams for hours each day become accepted practice."# Mr Charlton also announced last month that Transurban had formed a partnership with leading global companies to explore the technology critical in advancing transport network management.# “Technology has been one of the barriers to a wider userpays system but we now have a host of new opportunities.# “We look forward to working with government and our partners to look at how those opportunities have the potential to enhance the management of vehicle, roadside and customer systems.’’ he said. About the TRN The Transport Reform Network (TRN) is a partnership of organisations and individuals that first came together in 2011 to discuss the state of transport funding and financing in Australia.# The TRN seeks to encourage a community-wide debate about how we pay for our transport infrastructure and services, and what we get in return.# For more information, go to www.transportreform.org The Transport Reform Network (TRN) is an industry policy group with secretarial support provided by Roads Australia - ACN 004 302 836 ABN 34 834 376 172 Secretariat: 2/437 St Kilda Road Melbourne VIC 3004 P. 03 9821 5255 E. [email protected] 4
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