Funding shortfall means up to 10 years' wait for roads & highways

14/8/97

Transport Minister Eric Charlton said today many communities throughout Western Australia could now have to wait up to 10 years or more for roads, highways and other priority transport infrastructure because of the State's funding shortfall.

"We want to continue to modernise and upgrade our road network to meet community demands but we are being frustrated by our inability to raise funds at the State level," Mr Charlton said.

"Our plan was to go to the money market and borrow funds over five years and repay over 15-17 years. This would have resulted in a major road building and public transport infrastructure program worth more than $800 million.

"It was a user-pay principle, where the community would have been investing in the future by adding important elements to the State's overall transport asset."

Mr Charlton said last week's High Court decision had frustrated the proposal and communities around the State were now seeing major projects having to be placed on hold.

"These communities have been pushing vigorously to get projects brought forward but now we have to rethink how we can develop a funding mechanism to reactivate them," he said.

Mr Charlton said road infrastructure was now a major national issue and a report just released by Austroads confirmed that business and the community were concerned about the decline of Australia's road asset.

The Austroads report entitled 'Australia at the Crossroad - Roads in the Community' was released at a seminar in Perth this week and follows a major review of the performance of the Australian road system.

The Minister told the seminar that the study revealed that roads had not contributed as much as they could to national economy.

"A key contributing factor has been the reduction by Governments in the level of capital investment in roads over the past 20 years," he said.

"The report acknowledges that road investments and road stock have a significant effect on private sector cost structures and productivity."

Mr Charlton said the 'Roads in the Community' document offered some positive directions in areas like planning, traffic management, opinions on public transport and the movement of freight, and would prove useful to the State's transport agencies in their operations.

He said Austroads had identified that Western Australians in particular believed that roads were the most under-provided Government service in the State

The Austroads report complemented work done by the Fix Australia - Fix the Roads campaign, which was aimed at bringing about major change to Australian road funding and Commonwealth-State road funding relations.

Mr Charlton said the future of road funding was now a major public issue around the nation and finding a fair and equitable way of raising funds was an urgent priority.

"Unfortunately, the State's flexibility in regard to setting a fuel franchise levy specifically for road construction and maintenance and transport improvement has been dealt a severe blow by last week's High Court decision," he said.

"In the past 10 years, Federal fuel excise has risen 10 cents a litre to nearly 37 cents a litre, bringing the total Commonwealth revenue raised at the bowser to $10 billion annually.

"Just a small amount of that is returned to the nation's roads - $1.6 billion, of which WA's share is about $160 million.

"In comparison, WA's State fuel franchise for petrol is 9.67 cents and every cent is returned to the transport system."

The Minister said the State fuel franchise included the four cents a litre paid by WA motorists to the Additional Funding Program, which from 1994-95 to the end of this financial year would have contributed $240 million to road improvements throughout the State.

Media contact: Doug Cunningham 9321 7333