Imbalance seen in road-user tax

Ken Shirley
Ken Shirley
Controversial road-user charges tax the productive sector to subsidise consumption, Road Transport Forum chief executive Ken Shirley said.

The way the charges were tallied meant trucks heavier than 12 tonnes were overcharged and light trucks were undercharged, Mr Shirley told the forum's annual conference in Queenstown.

It meant trucks that supplied domestic consumers were charged less than the trucks that helped generate the trade receipts so crucial to the recovery, he said in a speech on Sunday.

The way road-user costs are allocated is being reviewed by the Transport Ministry, but the forum - which opposes the charges - is concerned the ministry has not looked hard enough at the way it calculates the costs.

At present, the charge is based on the relationship between road wear and axle weight.

It assumes that, as the weight on the road from each axle of a truck increases, the amount of damage done to the road increases by the fourth power.

A working group recently recommended that assumption be halved, which would mean road transport costs per vehicle tonne would be cut by 5% and the distortion between large and small trucks would be reduced, Mr Shirley said.

The current regime encouraged operators to increase the number of axles on trucks, so as to reduce axle weights and minimise road-wear costs.

The present cost assumption meant heavy-vehicle operators were encouraged to install more axles than justified.

This increased vehicle and operating costs, and meant payloads were reduced on vehicles that were weight-loaded.

Doubling the axle weight increased the cost 16-fold, costing companies and their clients, Mr Shirley said.

Last week, a Transport Ministry spokeswoman confirmed officials were considering a draft report on the charges and a final report was due next monthThe report did not include a review of the fourth power rule because the 2009 review that promoted the work recommended the rule continue to be used.

There was considerable uncertainty about the relationship between road wear and vehicle weight, particularly on low-volume roads, and the ministry was exploring the potential for further research to be carried out, she said.

Minister of Transport Steven Joyce would be briefed on the issue in December.

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