1. Unscrambling the Toll Road Egg
How toll roads locked irrational pricing and options for a more effective approach

2. AUSTRALIAN LAUREATE FELLOW, UNIVERSITY OF QUEENSLAND
JOHN QUIGGIN
AUSTRALIAN LAUREATE FELLOW, UNIVERSITY OF QUEENSLAND

3. ROAds: One of our biggest capital assets
Value of Australian road network estimated at $280 billion (Roads Australia)
Annual expenditure around $50 billion (Commonwealth and state budgets)
250 billion vehicle/km travelled

4. HAPHAZard Mix of funding and pricing
Vehicle registration charges, unrelated to road use
Fuel taxes, a mixture of resource rent tax, general consumption tax, road user charge
Local government rates
State and Commonwealth general revenue

5. Toll roads AND PPPs
Ad hoc deals to deliver new projects without addition to measured public debate
BOOT (Build, Own, Operate, Transfer) model
Crucial role of demand risk

6. THE END of the PPP Model GFC
Failures due to over-optimistic demand forecasts
Last attempt (Legacy Way) failed to attract sufficient interest
Return to public finance
Is the model permanently broken?
Asset recycling

7. Objectives for road pricing
Cover costs, including return to capital, depreciation and maintenance
Price of use should cover marginal costs, including congestion
Need to optimise network as a whole, not individual roads
Correct balance between private cars and public transport, and between road and rail

8. Principles for road pricing
Two part tariff: fixed registration charge and usage-based charge
Network optimisation requires congestion pricing
Supplemented by speed limits and physical controls on unpriced local roads

9. Current policy has it backwards
Old congested roads are untolled
New toll roads massively underused (around 50 per cent of projected usage in Brisbane)
BOOT arrangements mean that, by the time roads are congested, tolls will be due for removal

10. Unscrambling the egg Comprehensive road pricing based on congestion
Buyback or shadow tolling for underused toll roads
Focus on better use of existing road network rather than construction of new roads

11. Technology GNSS road pricing Singapore model
Privacy issues: need to be addressed systematically given ubiquity of cameras
Implications of self-driving cars ?

12. Fiscal Feasibility
Revenue neutrality: user charge revenue can be used to reduce registration charges
Government debt: this is ‘good debt’,
Government bond rates at historic lows

13. Political Feasibility
The big question
Long standing assumptions about political feasibility are no longer valid’
Labor has advocated raising taxes, still leads in opinion polls
Donald Trump is President of the US
If not now, when?