Reforming remote and regional road funding

Monday, 22 August 2016

Austroads has published a report that examines the current funding and financing arrangements for regional and remote roads in Australia and considers the implications of road funding reforms.

Reforming remote and regional road funding

The project, which sought to identify alternative funding and financing options for remote and regional roads, was undertaken in three stages:

  • Stage 1 developed a snap shot of current and historic road related revenue, expenditure and funding
  • Stage 2 assessed the limitations of current funding arrangements for remote and regional roads, highlighted by a number of case studies
  • Stage 3 analysed a number of alternative remote and regional road funding options.

The project considered the practice of economic evaluations as applied to remote and regional roads, and the implications of possible heavy vehicle charging reform for regional and remote road funding.

Two broad categories of alternative funding options were considered: improving the targeting of road charging to the ultimate beneficiaries of remote and regional roads; and introducing dedicated funding for remote and regional roads. Policy options that could be introduced as part of a direct user charging reform, to address likely revenue insufficiency problems for remote and regional roads.

The project found that:

  • Remote and regional roads will always have a large Community Service Obligation element and therefore pure economic pricing of roads alone will not work in these areas.
  • Road funding and pricing reform can be achieved in these areas, although direct road user charging will require application of postage stamp pricing principles or a universal service obligation to ensure adequate ongoing funding for remote and regional roads.
  • More research needs to be done to incorporate the social benefits of road infrastructure into the project assessment framework.
  • Developer contributions could provide an additional source of private funding.
  • A dedicated remote and regional funding pool could provide ongoing funding certainty to improve asset management.

The project helps support road agencies to ensure that future road reforms address the funding issues of regional and remote areas.

Report link: Reforming Remote and Regional Road Funding in Australia

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