Key messages

Reforms to how governments plan, manage and invest in transport networks will bring forward innovative solutions and lead to new infrastructure investment in integrated and multimodal programs that better matches predicted mobility needs.
The primary aim of any transport pricing reform should be to support transport operations by balancing the efficient use of the transport network. A reasonable price for passenger and freight users would capture all travel costs, starting with the direct costs of building and maintaining assets and operating services. What people pay must also reflect the impact that individual choices have on others. A successfully reformed transport network pricing regime will make these considerations clear to all users.
A national distance-based road use charge for heavy and light vehicles must ultimately replace the petroleum fuel excise that will disappear as Australia’s vehicle fleet electrifies. Charges should reflect the external impacts of road use in different settings, progressively extend across vehicle classes and be complemented by reductions in fixed vehicle ownership costs. In Fast-growing Cities, supplementary parking and road user charges can target congestion, while rebalanced public transport fares deliver value for money and more efficient network operations.

What are the impacts?

The reform ensures all users will have affordable public and active travel options for reaching jobs and services within an acceptable travel time. Establishing and implementing a nationally consistent governance framework for transport network pricing reform will deliver significant economic benefits and increase affordability by only charging users for what they need.
The reform also encourages behavioural change and a mode shift away from motor vehicle use for some journeys, reducing congestion and improving environmental outcomes.
Moving towards a distance-based pricing regime potentially risks disadvantaging users, including people living in rural and remote areas, who spend a high share of their income on transport. These social impacts can and should be managed by introducing nationally consistent protections, monitored by independent agencies at arm’s length from governments. This, along with the transparent hypothecation of transport revenues to mobility programs, will enhance community trust in governance reform.

How easy is it to implement?

The proposed mechanisms to price efficient transport use are complex and challenging to implement, therefore administrative costs should correspondingly increase, however existing revenue-collecting mechanisms can be repurposed, with this process already underway through Heavy Vehicle Road Reform. The pandemic provides a positive example of governments’ capacity to deliver pricing reform, ensuring both passengers and freight users pay a reasonable price. This coordination, exercised over the next 10-15 years, will be equal to the job of leveraging broad progress from the distance-based pricing reforms that are already being initiated by ‘first mover’ jurisdictions.

How certain are the outcomes?

Implementing transport pricing reform requires a significant overhaul of transport policy. A staged approach is needed, with incremental change. The approach needs to be transparent to improve confidence in the reform.
Risks to the reform will come from community resistance to changing pricing mechanisms, therefore engagement with community will be needed to improve acceptance.
This, along with government-controlled measures to hypothecate revenues and mitigate impacts on at-risk users, should enhance confidence in the likely success and benefits of reforms.