By: Peter Carr EROAD Director, Regulatory Market Development ANZ
If you make your living on the roads, then you know that if you don’t have a good road, pretty soon you won’t have a good truck.
The maintenance money that fails to go into a road soon ends up as money going into vehicle maintenance – and usually more of it. Studies from the United States show, for example, that on average each American car owner pays roughly twice as much each year on repairing road-caused vehicle damage than they would have had to pay to properly fund their road maintenance budget. So, not paying higher taxes means paying even higher, more frequent maintenance bills.
Of course, averages hide the fact that many people won’t or can’t afford to repair their vehicle. In a country like the US with little or no regular vehicle safety inspections for the light fleet, you can imagine what that means for the quality of the ‘bottom end’ of their fleet. It’s usually a different story for heavy commercial vehicles because the level of regulatory scrutiny means that the higher vehicle maintenance costs from poorly maintained roads are inescapable.
Getting a government to spend adequately on road maintenance is tough. However, it is clearly in the road user’s interests to be able to quantify and tell the story where it seems road managers are failing to uphold their end of the ‘tax deal’. After all, we pay road user charges and all the rest, so that they can provide good roads.
The other side of the deal is abiding by reasonable and fit-for-purpose road access restrictions. Assume for a second those restrictions are reasonable and fit-for-purpose. If so, then over-loading and exceeding speed restrictions significantly accelerates the wear-and-tear on pavements and structures – to a much greater degree than the tax from the increased fuel burn will compensate for.
Road managers need to get better at telling this side of story. This is why the ‘supply side reforms’ currently out for consultation as part of the Heavy Vehicle Road reform programme are so important – and especially (for the purpose of this article) the push for common service level standards and a proper ‘forward looking cost base’. These should provide a common language to explain both what is being spent on and why.
There will always be maintenance costs and taxes to be paid: the aim of reform is to optimise and minimise the total burden that is holding down our productivity.
About the author
Peter Carr is the Director Regulatory Market Development with EROAD Ltd, responsible for working with government policy agencies and regulators across Australia and New Zealand on road safety, funding and taxation matters. Prior to joining EROAD, Peter was responsible for advising the New Zealand government on: the operation and performance of the land transport revenue, funding and investment systems; the rates of Road User Charges and Fuel Excise Duty; the use of tolling, debt and public-private partnerships; and the regulatory settings for heavy vehicle dimensions, mass, and access.