Worth Feeding…


31 October 2011

Landmark Rural Roads report lashes Australia’s ‘broken’ road funding and investment system:

The Australian Rural Roads Group – A national alliance of over 120 rural-based local governments – today released a landmark report which refutes the Productivity Commission and COAG’s recommendations about road funding in Australia and reveals the hidden productivity in many rural local road networks – networks that traditionally have been seen as funding ‘basket cases’.

The paper was launched today on the website www.austwideruralroadsgroup.com It will cause controversy in Canberra and across State Governments as it asserts that:

• Contrary to the formal findings of the 2006 Productivity Commission Inquiry into Road Pricing in 2006, Australia’s roads are not being reinvested in through sufficient road user charges – meaning roads are slipping further into a multi-billion dollar maintenance ‘tailspin’.

• Current COAG road reform efforts are entirely off track – they refuse to address the actual costs and condition of the nation’s roads: Canberra has absolutely no information about the actual cost and condition of over 600,000km of local roads worth over $75 billion; the resulting chronic underfunding is creating a maintenance time bomb that is costing lives and lost productivity – particularly in rural Australia

• Rural local roads have traditionally been seen by governments as heavily-subsidised ‘basket cases’, not worthy of much investment, but ARRG case studies have proven that some of these roads are so efficient that they pay for their own upkeep just through current vehicle traffic levels – this landmark finding opens the door for targeted investment in roads and even paves the way for private investment in road networks.

Speaking at the launch of ‘Worth Feeding: Case Studies of Rural Local Road Efficiency and Reform of Australia’s Road Pricing and Investment Systems’ ARRG Chairman John Coulton, Mayor of Gwydir Local Government in Northern NSW, said the paper is a landmark report that pulls no punches:

“The ARRG has invested heavily in thorough analysis of Australia’s road funding, pricing and investment system. We have backed our assertions with case studies of actual roads and their pricing and investment systems. The results break new ground in this debate”.

“We didn’t want to produce motherhood statements. We wanted to tackle the big issues – the ones that the Henry Tax Review and Infrastructure Australia are faced with. We think we’ve done that and we offer practical solutions for change for the better”.

Mr Coulton said the paper turned accepted logic about road funding ‘on its head’:

“The Productivity Commission said Australia had a road charging system that made sure the true costs of roads were being recovered. But this just can’t be the case. We are facing multi-million dollar funding gaps across the country in road maintenance budgets. We are falling further and further behind. Our roads are becoming less efficient for our freight task and some are becoming impassable or downright unsafe for our communities. The system is broken and Australia needs to see it as reform of national significance”

Mr Coulton said the solution to the roads crisis lay in a nationwide accurate road asset condition and cost reporting system – a feature which the report establishes is not done at all in Australia – leaving efficient road spending a completely hit-and-miss affair, open to politics and poor bureaucratic outcomes.

The Worth Feeding report has been forwarded to the Prime Minister, Premiers, Transport Ministers and their shadow counterparts, as well as to the Australian Treasury Secretary and Tax Summit. The Australian Rural Roads Group is beginning a series of workshops with politicians and treasury executives to push for mandatory road asset reporting and nationwide management to fix the rural local roads crisis.

Contact: Cr John Coulton, Chair, Australian Rural Roads Group 0427 297 082

Mr Luke Fraser, Report Author, Principal, Juturna Consulting 0437 146 274

‘Worth Feeding: Case Studies of Rural Local Road Efficiency and Reform of Australia’s Road Pricing and Investment Systems’

Key Findings…

• Local roads and their funding: ‘out of sight, out of mind’: 600,000km of local roads in Australia, worth over $75 billion in total – but no national reporting or information kept on cost and condition of this network – the result? Multi-billion dollar underfunding, poor funding choices and dangerous and unproductive local roads for all Australians, especially those in rural areas.

• Landmark road charging finding: 2006 Productivity Commission Road Pricing Inquiry found that current road user charges paid for the true costs of roads, but this finding was in error: not enough funds are being put back into Australia’s roads from user charges. Huge road maintenance shortfalls and poor road condition nationwide are proof of an ineffective road funding system. Governments must recognise this major shortcoming and act to fix it.

• Call for mandatory road asset cost and condition reporting nationwide: Only getting to grips with actual road asset condition and costs will fix the problem – the ARRG report recommends a national road asset manager to receive accurate road condition and cost reports from all local governments. Current COAG road reform plans are not addressing road asset reporting and are therefore doomed to failure – costing future Australians even more from inheriting a broken road system.

• Silver lining: case studies prove many rural local roads could be productive investments – ARRG research has broken down the traditional prejudice that rural local roads are always a loss-making, taxpayer-subsidised ‘basket case’ that is not worth the investment: detailed case studies show some rural local roads are ‘efficient’ assets that drive rural economies and which already pay for themselves on the fuel excise derived from current traffic levels.

Click here to download the Economic Paper ‘Worth Feeding’