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New approach to transport funding required: ACIL Allen

28.6.2016

A new report by respected economic consultants ACIL Allen shows Australian Governments have failed to address the severe and growing gap in land transport infrastructure funding and much of the heavy lifting has been left to state and territory governments.

The report Land Transport Funding: Transitioning to a Better Model commissioned by the Australian Automobile Association (AAA) says a new funding approach is required to alleviate congestion, road damage and crash costs.

According to the report the Australian Government will collect around $81 billion in road-use related charges, such as fuel excise, in the next five years, but is predicted to return less than half that amount to land transport infrastructure investment. 

In contrast the states and territories will collect around the same amount as the Australian Government, but invest more than they collect, at around $89 billion.

Even if the Australian Government invested all of its surplus road-related revenue into land transport over the next five years it would be barely enough to roll out only ten of 82 unfunded projects listed on Infrastructure Australia’s Infrastructure Priority List.

Additionally, the report predicts the entire amount all tiers of government spend on land transport infrastructure could soon be overtaken by the cost of congestion, possibly as soon as 2018-19.

AAA Chief Executive Michael Bradley said the report calls for future Australian Governments to increase spending on land transport infrastructure and to take a longer-term approach to transport infrastructure funding.

“For some time the AAA has called for the establishment of a transport infrastructure fund to create a pool to be invested in roads and other land transport infrastructure. We have also called for the establishment of an independent inquiry into transport market reform and how we transition in the long-term to a fairer, more transparent tax system for motorists. Such a funding mechanism is vital to support our economy into the future.

“The ACIL Allen analysis and report strongly supports these measures, and I urge both major parties to consider their recommendations,” Mr Bradley said.

The full ACIL Allen report: Land Transport Funding: Transitioning to a Better Model and the AAA’s Infrastructure Funding Report Card: Funding Australia’s Future are available at www.aaa.asn.au/news-and-publications/reports/

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