My Latest on "The Conversation": Road users must pay, sooner rather than later

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Michael de Percy, University of Canberra

The idea of motorists paying for the roads they use beyond tolls, fuel excise or registration fees has taken hold in Australia. A user-pays system might replace existing fees with charges based on motorists' actual use of roads. New technologies would allow charges to be applied at different rates during peak periods in the same way we pay for the use of telecommunications or electricity networks.

The Henry Tax Review, the Harper Competition Review, the Productivity Commission’s Public Infrastructure Inquiry, last week’s AFR National Infrastructure Summit, and now the Australian Automobile Association, agree it’s time. But politicians aren’t sure it will pass the “pub test” with voters.

A user-pays system is necessary to reduce congestion on our roads and improve productivity into the future. We must have a debate over how, not if, we should implement a road user-pays system. But chances are political debates will send the user-pays idea down a rabbit hole before it even begins.

Can it pass the “pub test”?

No politician wants to be the one who implements a user-pays system for roads. But while the jury is still out on whether motorists support the idea of user-pays, the current fuel excise hits those who can least afford it the hardest.

A well-designed user-pays system would be fairer. And road users would know exactly what they were getting for their money.

There can be no such thing as a simple debate about transport reform. A debate about user-pays must cover:

• earmarking (hypothecation) road-related revenue for road construction and maintenance
• efficient use (or "sweating") of our existing transport infrastructure
• ways of enabling intermodal freight movement
  
• public-private partnerships to take advantage of available capital and ramp-up infrastructure spending
  
• efficient approaches to competitive tendering for infrastructure projects
• changes to the existing fuel excise
  
• effective ways to limit the impact of user-pays on those who can least afford it
• new ways to capture the value added to nearby properties by infrastructure improvements
• better ways to fund public transport
  

The debate will be intense. But business-as-usual will only lead to mounting congestion in our cities, decreased productivity and ultimately a decline in our standard of living. And it will be very difficult to implement the necessary reforms without a user-pays system.

Pricing and charging are not the same

Two important issues must be considered separately in the debate: pricing and charging. First, there needs to be a way to recognise the price – the amount consumers are willing to pay for using roads - relative to the costs associated with the funding, construction and maintenance of roads. Second, there needs to be a way to charge users for actually using the roads where the amount charged reflects the price.

Much of the political debate will likely focus on charging, though pricing will be the major reform. Even though voters are already paying for roads, they don’t really know how much and the contribution has little to do with their actual use of roads.

Without accurate pricing, we can only guess at how to prioritise road construction and maintenance. In the absence of such market information, simply building more roads will not address the underlying issues.

Although a simple per kilometre charge is supported by many, accurate pricing would mean different charges to reflect demand. This may require a combination of per kilometre and congestion charging. Also, charges would need to vary to reflect how much motorists would be willing to pay under different circumstances. A broad user-pays system might even encourage more flexible work practices as the cost of commuting becomes more transparent.

But there are many sticking points. For one thing, the Australian Motoring Enthusiasts Party is opposed to any user-charges for existing roads, even though road pricing may make it fairer for motorists in regional areas.

We can’t afford another GST ‘birthday cake’

The introduction of road pricing may prove as difficult – if not more – than the introduction of the GST. That took 30 years to happen. Can we really afford to wait that long?

At 650 pages, the Coalition’s Fightback! policy was known as the “longest political suicide note in history”. But more than two decades later, most of Fightback! has been implemented.

However, the GST debate was less complex than the road user-pays debate is shaping up to be. For one thing, John Howard had the backing of the States to introduce the GST. The introduction of road pricing will require getting the States on board again, but in an area that is clearly within the States' constitutional powers.

Prime Minister Tony Abbott’s relationships with Queensland and Victoria are far from congenial. And transport reform is shaping up to be a major issue for all levels of government. So it is not difficult to see why politicians “are wary of a voter backlash ” over transport reform.

Media one-liners will hinder reform

To make matters worse, the complexity of transport reform will be more difficult to explain in media-grabbing one-liners than the impact of the GST on a birthday cake. And history suggests that another “birthday cake” incident has the potential to put transport reform on hold for several years.

We cannot put all of the responsibility on our politicians. Sensible debate with large-scale community support for reform is essential. Otherwise, achieving transport reform will make the implementation of the GST look like a political cake-walk.

In the meantime, whether user-pays happens now or in the future, the longer we wait, the more we will pay.

Michael de Percy is Senior Lecturer in Political Science at University of Canberra.

This article was originally published on The Conversation.

Read the original article.

Moorebank Freight Hub: The True Last Mile of the Digital Economy

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One of the major issues for the digital economy in Australia has less to do with the availability of a connection to the internet, and more to do with getting goods purchased via the net to one's front door. The Moorebank Intermodal Terminal might just provide the model solution for the true last mile of the digital economy: home delivery.

Much has been said about the importance of connectivity and the benefits of internet communications. Many have hinted at the environmental-saving benefits of reduced travel and so on. But in practice, Australia's distribution infrastructure has evolved from a number of legacy transport technologies that would benefit from greater intermodal connectivity.

This week, the federal government signed an agreement with the Moorebank Intermodal Company (MIC) and the Sydney Intermodal Terminal Alliance (SIMTA) to develop the Moorebank Intermodal Terminal. SIMTA is a consortium established by ports and logistics operator Qube Holdings (67%) and rail freight operator Aurizon (33%). MIC is a government business enterprise that will be privatised once the terminal is operational and commercially sustainable. Details of the proposed development can be found here.

The basic purpose of the terminal is to move more freight out of Port Botany via rail. At present, some 5,000 shipping containers are moved to and from the port by road each day. The Moorebank hub will reduce the number of container trucks in Sydney but also encourage more interstate containers to be moved via rail. This is good news for the rail industry and will no doubt provide greater incentives for an increase in rail freight.

The benefits of rail freight include lower road maintenance costs and increased road safety due to a decrease in large trucks on the highways and in greater Sydney. The Westconnex project will facilitate greater movement of goods in the local area. As the digital economy continues to grow, it is not unreasonable to expect the number of light trucks to increase in local areas. Indeed, it is not uncommon to see delivery vans from various providers ranging from Australia Post, to Coles and niche providers such Lollypotz in most local areas. Of course, an increase in home delivery means a decrease in the number of cars on the road.

The design of the hub will include the use of warehouses as noise buffers for rail operations while taking advantage of Commonwealth land that is otherwise underutilised.With Sydney Metro Airport Bankstown and the proposed developments at Badgerys Creek nearby, the Moorebank hub should be the catalyst for major change in how freight distribution is managed in Australia.

But not everyone is happy about the proposed logistics hub. A concerted effort by Liverpool City Council and local members suggests that the Badgerys Creek site would be better suited to serve the needs of Sydney's future freight movement. Most of the opposition centres around the impact on  local neighbourhoods and health with predictions of "84% more trucks on the Hume Highway, 350% more trucks on Moorebank Avenue, and 22% more trucks on the M5 west of Moorebank Avenue".

But what is the alternative?

Property markets change, neighbourhoods change, Sydney's growth will continue. The problem will

not go away and less action will result in greater problems in the future. Even with the Moorebank freight hub approval, it will not be in operation until 2017. And this is in a location where public and private sector interests coincide, along with a willingness for large-scale private sector investment. The advantages of the Moorebank site are available now and would fit in with other investments in Westconnex and the Badgerys Creek development. 

But simply waiting for the stars to line up at Badgerys Creek in the same way they have at Moorebank is nothing less than wishful thinking. The Moorebank logistics hub is an opportunity that should not be missed. The challenge, of course, is to manage the disadvantages experienced by residents and local neighbourhoods. 

Nonetheless, some of the most important challenges to our future standard of living are plagued by nimbyism. And managing the social, political, environmental and economic disadvantages in local neighbourhoods while ensuring Sydney doesn't choke itself to death is not a policy challenge for the faint-hearted. But the true last mile is indeed the last straw, and the digital economy marches on.

Book Notes: "A Passage to India" by E.M. Forster

A Passage to India by E.M. Forster

My rating: 3 of 5 stars


This novel pre-dates Orwell's Burmese Days, so it is one of the earlier works that self-consciously examines Orientalism. However, unlike Burmese Days, I found it hard to get into. It must be Forster's near-Victorian style - it seems more like Joyce than it does Ford. Along with detailed notes to every chapter, it felt more like a work of non-fiction than a story based on Forster's travel experiences. Obviously important, but somehow shallow. Maybe this was an attempt to minimise the political backlash that was more likely to occur in the pre-Hitler period than it was in Orwell's time? Regrettably, this one goes down as "having read a classic" rather than a great literary experience for me.



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