Vehicle registration fees and fuel excise charges could be abolished to make way for a user-pays road system if the Federal Government adopts the recommendations of a landmark infrastructure report.
The Infrastructure Australia report recommended charging drivers for using roads as a way of reducing congestion and helping fund major projects.
The report included nearly 80 recommendations which could boost the economy by an estimated $40 billion and leave the average household about $3,000 a year better off.
The report recommended a public inquiry, possibly led by the Productivity Commission or Infrastructure Australia, into the existing funding system for roads and the development of a user-pays model for motorists.
Introducing such a model “will require the removal of familiar taxes and charges such as excise on fuel and registration fees”, the report said.
“The existing approach to charging for road use is not well understood by users,” it said.
“Many users see roads as free, or at least free at the point of use.
“Fuel excise is charged at the fuel pump, but is not disaggregated from the per-litre cost, nor displayed on the fuel docket in the same way as the GST.
“Together, these factors further the misconception that roads are free and create public perceptions that reform is about new taxes rather than fixing the current flawed charging system.”
The report said almost three quarters of Australia’s population growth was projected to be in the four largest capital cities — Sydney, Melbourne, Brisbane and Perth — and that would place pressure on urban infrastructure that was already subject to high demand.
Report calls for revival of Melbourne’s dumped East West Link
Infrastructure Australia identified 93 priority projects across the country, including new metro rail systems in major cities, but it warned current spending levels were insufficient to meet those needs.
One of the priority projects was Melbourne’s dumped East West Link road project.
The report found the east-west corridor to the north of Melbourne’s CBD is one of the city’s major congestion challenges.
“The audit found that this corridor had the highest 2011 road congestion delay cost in Melbourne, with a delay cost of $73 million,” it said.
“This is expected to worsen by 2031, with delay cost increasing to $144 million.”
The Andrews Government scrapped the East West Link after it was elected in 2014 at a cost of more than $1 billion.
Victorian Treasurer Tim Pallas said the State Government would “build the infrastructure Victorians voted for”.
“Now that IA has identified a large list of projects that Victorians did in fact vote for, that are supported by business cases, we’ll be proceeding with those and not the dud East West Link,” he said.
“The business case produced by the previous government makes it clear that the East West road failed to deliver the traffic solutions to that east-west congestion.”
But the Victorian Opposition’s treasury spokesman Michael O’Brien said the report showed the Andrews Government was making a mistake.
“Infrastructure Australia is clearly saying the East West Link is a top priority,” he said.
“It’s needed now, and Mr Andrews should swallow his pride, apologise to Victorians for the money he’s wasted, and put East West Link back on the table.”
Improving Adelaide’s public transport system, including reinstating a tram network throughout the city, was listed as a priority, along with upgrading sections of the north-south road corridor through Adelaide and sealing the Strzelecki Track in north-east South Australia.
Sydney population growth challenges
The report said Sydney’s 2.1 million workers were expected to increase to 2.8 million by 2031.
About two thirds were expected to work in the city’s “Global Economic Corridor”, which extends from the airport and the CBD and north to Macquarie Park.
Unless new transport infrastructure was built to service those areas, 42,000 potential jobs would be unrealised by 2036.
Priority projects identified by the report included the Sydney Metro rail project, with a high-frequency connection from Chatswood to Bankstown via the Sydney CBD.
Upgrading the M4 motorway from Parramatta to Lapstone was also on the list, as well as stage three of the WestConnex road project, connecting the M4 to the M5.
Other NSW priority projects included the planned western Sydney airport at Badgerys Creek, and the report also recommended the preservation of a corridor for a dedicated fuel pipeline to the airport.
“When operation reaches full capacity, the airport could potentially require 50 to 65 B-double fuel tanker deliveries per day, which would add to congestion on Sydney’s urban road network,” the report said.