The National Transport Commission’s consultation paper on options for setting heavy vehicle charges for 2023-24 and beyond proposes that transport ministers should set heavy vehicle charges for a three-year period. The paper proposes three options—

Option 1: increase heavy vehicle charges by 2.75 per cent per year. This would be the same increase that was adopted for 2022-23

Option 2: increase heavy vehicle charges by 6 per cent per year. This is close to the current rate of consumer price (CPI) inflation, although it would result in charge increases for 2024-25 and 2025-26 that are substantially higher than forecast CPI

Option 3: increase heavy vehicle charges by 10 per cent per year. This higher rate of increase would seek to reduce the revenue gap between charges and the PAYGO cost base.

The problem with all three options is that the PAYGO model is dead. For a time, it was an adequate proxy for broader road pricing reforms. But governments have failed to deliver those reforms.

The PAYGO cost base is now meaningless. The funding included in the cost base does not reflect the needs of industry. Governments cannot tell the industry what their charges will pay for and how the industry’s priorities will be implemented.

Rather than one of the NTC’s three options, the ATA recommends that transport ministers adopt the following charging trajectory—

2023-24           0 per cent

2024-25           2.75 per cent

2025-26           2.75 per cent.