Deputy PM raises the issue of road user charging

Road user charging is a challenging issue the world over. But it’s one that Deputy Prime Minister and Infrastructure Minister Michael McCormack weighed in on at this week’s AFR Infrastructure Summit.

As reported by the Australian Financial Review, the Minister told the audience at the Summit, “Greater road user charging may be one way to overcome the loss of government revenue from fuel excise due to the advent of electric vehicles.”

“We need to look at new ways of doing things. We are looking at pricing at the moment.”

Productivity Commission chairman Peter Harris also commented, rather more bullishly, on road user charging this week. Again reported in the AFR, Mr Harris said that, “the greatest failure of my time in infrastructure” was the inability to introduce road user charging. In the AFR article he calls for “another source of road charging in the 2020s, lest all the owners of fossil fuel guzzlers end up subsidising all the hybrid and fully electric vehicles.”

In addition to maintaining government revenue in a time of change, there’s also the role that road user charging could play in changing habits, and work as a tool in reducing traffic congestion.

Politics and marketing

As noted by David Hensher in his article for iMOVE ‘Road pricing reform: a thorny issue‘, “We have known for many years that pricing reform is not an issue of economics and planning, but of politics and marketing.”

Further, Mr Hensher and Corinne Mulley wrote in ‘Transportation‘ in 2014:

“The call for a congestion charge is getting louder and more frequent in many countries as major metropolitan areas experience increasing levels of road congestion. This is often accompanied by a recognition that governments need to find new sources of revenue to maintain existing road networks and to invest in new transport infrastructure.”

“Although reform of road pricing is almost certain to occur at some time in the future in a number of countries, a key challenge is in selling the idea to the community of road users as well as a whole raft of interest groups that influence the views of society and politicians. Simply announcing a need for a congestion charge (often misleadingly called a tax) does little to progress the reform agenda.”

“What is required is a carefully structured demonstration of what might be done to progressively introduce adjustments in road user charges that are seen as reducing the costs to motorists while ensuring no loss of revenue to government.”

Not the last words

This topic will remain a hot button issue, but it’s encouraging that it has been raised in this high profile manner, and it’s something we’re certain to hear more about.