Transcript of Interview: Afternoon Show with Chris Smith—2GB

Interview

BPC031/2015

15 June 2015

E&OE

Chris Smith: Well, there's no doubt that if we really want to fix up traffic congestion, we are going to have to do something drastic in this country. This has probably crossed your mind many times if you've sat in gridlock traffic at either end of the day. How do we ever fix this? Because clearly the systems we have in place are not working. So over the weekend, motorists were being asked to consider a new way of funding roads. It involves a user pay system, and the user pays a lot more. It means you'll get charged depending on how much you use your car, how long you travel on the roads that need to be built.

Some countries have already put this system to the test, and it's no wonder that we have some in the Federal Government saying let's talk about it, because it needs to be considered as an option. Should Australia be doing the same? Jamie Briggs is the Assistant Minister for Infrastructure and Development; he joins me on the line right now. Assistant Minister, welcome.

Jamie Briggs: Thank you.

Chris Smith: How would this system work? Give us the example of Singapore if we can, because I just get the feeling that what they are doing is probably pretty much aligned to what you could be thinking about.

Jamie Briggs: Well I think it's very early in consideration, but clearly the problem that you've just articulated is right, we've got more infrastructure demands than we've got the capacity to pay for. Everyone, particularly on Sydney roads, knows that and while there's some $30 billion of projects either underway or about to get underway in Sydney right now, thanks to Mike Baird and the Federal Government, it won't catch up completely, there will always be a task. Now, at the moment we already pay to use roads. You pay a fuel excise, you pay registration charges, you pay for drivers licenses, and in some cases, particularly in Sydney, you pay tolls. But there's no- it's not a revenue source which has got a connection to the use of the asset in most cases, it's a little different with toll roads, but with most roads there's no connection between the payment of the tax and the use of the asset. Now, one of the other challenges we've got is, modern cars become much more efficient, the amount of fuel excise collected will start to diminish.

Chris Smith: Because environmentally friendly cars pay less of this tax, right?

Jamie Briggs: Correct. In fact, there's a unique unfairness in that if you're a mum and dad out in Western Sydney driving to pick up kids in a 2002 Commodore, you're paying far more to use the road, or far more in fuel excise, than an early-30s banking executive who's purchased a Mercedes with a much more fuel-efficient engine.

Chris Smith: Nothing wrong with a Merc, by the way, but that's just on the side there.

Jamie Briggs: They're very good cars, they're very safe cars, and we want people in new cars, but the point is the newer the fleet becomes, the less fuel excise the Government will collect. Now, that will start to have an impact—already has started to have impacts, the last two years at least, there's been more road expenditure than there has been revenue collected in relation to infrastructure. So we've now reached a tipping point where the amount of infrastructure required is beyond the revenue sources.

Chris Smith: And not to mention the fact that congestion—and people need to be aware of this—could cost Australia $53 billion a year in lost productivity by 2031.

Jamie Briggs: That's right, that came out of the Infrastructure Australia audit which we released a couple of weeks ago. So the point is, we don't necessarily have the answer to, what is the best way to deal with this, but certainly the way that we fund and build road infrastructure and public transport infrastructure is still largely disconnected from market signals.

Chris Smith: It's outdated.

Jamie Briggs: It is outdated.

Chris Smith: So in Singapore they've got a satellite position tracking system which they'll have enforced by 2020, which will do what you're speaking of possibly in cities like Sydney and Melbourne, where it'll measure how long you've used the asset. That means how long you've travelled on the M2, or the M4, or the M3, or the M84, no matter we have.

Jamie Briggs: Well look, that is certainly one of the methods, and in fact in Perth we're actually building a project at the moment with the West Australian Government where we'll have, for heavy vehicles, a per kilometre change on what's known as the Perth Freight Link, it's a 72 kilometre road that'll start from way up north of Perth and go through the suburbs, past the airport, to the port, and trucks will be measured- will pay as per the kilometres they use on that route. They'll pay a higher price to use surrounding roads, so that'll be a dedicated freight route. That's a type of—in a sense, a way to get private sector money into new infrastructure and that's what we really need. We need more private sector money into infrastructure so we can get more infrastructure. But it will also give a greater indication about when people are driving and for what time.

Chris Smith: [Interrupts] And what about congestion taxes for CBD areas?

Jamie Briggs: Well look, congestion taxes have had some success in London, and they are obviously something which governments- are part of their potential armory to deal with these issues. But I don't think in the first instance in most cities congestion taxes will work in Australia. Maybe they'd work in respect of the effect that they're trying to have- because of course what you're trying to do with a congestion tax is make it more expensive to drive your car into a city, and therefore use.

Chris Smith: Why won't it work?

Jamie Briggs: Well ultimately that would be a decision that the New South Wales and local government would make, and it's not really in respect about new infrastructure investment, that's more about sending a signal about what type of transport you should use. What we're talking about, how we're funding roads and so forth, is about the- how you fund and maintain the infrastructure that you want. So they're slightly different arguments.

Chris Smith: You know the problem is, my friends at Camden, my friends at Baulkham Hills drive in on the M5 and M2 respectively every day, they can't stand it. But if they were going to catch a bus they might not try and take their car. But of course we build these motorways with no separate lane for buses in the main—like we don't have one for the M4—and I wonder whether we've got to start building motorways where you have the option of jumping on a bus, either a fast bus or a bus that does stop, but one that uses the motorway and gets you to where you want to go a lot easier than what it would take your car to do the same thing.

Jamie Briggs: Well indeed with the WestConnex proposal there is provision for bus services with the new tunnel as part of the extension of the M4 if you like, under Parramatta Road. So that will have a dedicated bus facility. And one point that people should remember is that 50 per cent of public transport kilometres travelled in Australia are done by bus. So having good roads means you've got a better public transport system.

Chris Smith: Yeah.

Jamie Briggs: But that's a very good point.

Chris Smith: And I wonder whether we don't say to people- because I just reckon the greatest marketing slogan of all time, to create a honeypot scenario for public transport, is the word free. And if we said to people- because it doesn't- we can't get enough money to get bums on seats in buses and trains to pay for the damn thing, so why don't we just say it's free folks? And then you will find they will get out of their car?

Jamie Briggs: Well ultimately as you know nothing's free. Someone's paying. And so if… most public transport- no, sorry, all public transport services in Australia—and mostly worldwide too for this matter—are subsidised by the taxpayer to a degree. The question we have to ask ourselves is what level is that subsidisation that we're paying? The toll box so to speak on buses and trains don't pay for their services most often.

Chris Smith: No.

Jamie Briggs: So it's a question about how much taxpayers' money you need to make those systems work.

Chris Smith: Yeah. Yeah. It's true. So do you think the public would accept, firstly—let's go back to the original thing about tracking movements of cars and trucks by satellite—how do you sell that to the public?

Jamie Briggs: Well look I think that's a discussion that is just beginning. The AAAs or the NRMA in New South Wales have come on board as far as having a good look at how we fund infrastructure, and they've this week even put out a statement calling for the Government to have a discussion about this. We've undertaken to do a trial with Transurban in Melbourne on the CityLink road that goes into Melbourne that Transurban runs to trial some different systems and how they may work. That trial will begin later this year. As I said to you before, the Perth Freight Link is an important step, because it's the first time we'll have a kilometre-based charging system. So there are some things happening I think what …

Chris Smith: [Interrupts] But here we are telling young homeowners you can't afford to live around Sydney, so get out into some of these new satellite cities to the northwest and to the southwest where we'll make sure that if you do jump on a motorway you're going to be taxed more.

Jamie Briggs: Well no, I think this is the point. This is not about is more tax; what this is about is using the revenue we receive at the moment more efficiently. See at the moment governments pay for road upgrades off their budgets, and they make judgments about what roads should be upgraded and when. What using data will show you is which roads are being used more heavily and need upgrade. So you'll have a much better connection between the revenue and the need for the expenditure and where it is.

Chris Smith: Yeah.

Jamie Briggs: So you'll get a much more productivity out of the system. That is the theory behind it of course, but there is quite a lot of work to do. This is not something that's going to happen tomorrow.

Chris Smith: No I understand.

Jamie Briggs: This is a beginning of an important debate. It is about the last unreconstructed market that we've got in Australia that it's not been, as you said before, the system that operates is outdated and it's not servicing the needs of a modern economy.

Chris Smith: I thank you for your time this afternoon.

Jamie Briggs: My pleasure. Thanks a lot.