Tony Abbott rejects pay-per-kilometre plan in Productivity Commission report aimed at drivers

Updated

Prime Minister Tony Abbott has rejected a controversial recommendation in a key Productivity Commission report that suggests drivers be charged for every kilometre of road use.

The Productivity Commission has warned Australia's system of selecting and funding public infrastructure projects needs to be changed, and has examined ways to encourage private financing of major projects in order to cut costs.

The commission has warned that users and taxpayers will ultimately have to pay for public infrastructure.

One of the more contentious recommendations is for government-funded pilot studies to find out how to impose "distance and location charging" for cars and other small vehicles.

Mr Abbott, who has said he would like to be known as the "infrastructure prime minister", has moved swiftly to knock back that call.

"I think it's not one that's ever likely to be accepted by any government," he told Radio FIVEaa in Adelaide.

"Tolls are a fact of life. We pay for road tolls, we pay for roads through our taxes, we pay for roads through our registration and we pay for our vehicles, so there's already a significant form of user-charging.

"This new form of user-charging, I suspect, is unlikely to ever be adopted by any government."

The Productivity Commission says more than $1 billion each year could be saved if its recommendations were put in place.

They include the sale of state-owned ports and electricity networks, the scrapping of industry participation plans - which are designed to encourage the use of local firms and suppliers on major projects - and stricter industrial relations guidelines to encourage better practices.

The commission has described the current process of identifying and developing public infrastructure projects as "deficient", and singled out the previous government's National Broadband Network for particular criticism.

Productivity Commission Chairman Peter Harris says government decisions need to be based less on what is "popular" and more on what is worth the investment.

"We see it with what I've been calling the icon project syndrome," he told The World Today.

"So when you call for lists of infrastructure projects, of course it's the big and sexy ones that get on the list and the dull and boring but potentially substantially more worthy project doesn't make the list."

$36 billion allocated to improve infrastructure: Briggs

Federal Assistant Infrastructure Minister Jamie Briggs has welcomed the report.

"The draft report makes clear that the system left by Labor is broken and desperately needing of reform," he told the ABC.

"We've got $36 billion allocated over the forward estimates to improve Australia's infrastructure, to ensure we're as productive as we can be, to ensure our economy is stronger than what it is today.

"We want to get best value for that money, that's why we commissioned this report in the first place."

In the December mid-year economic and fiscal outlook (MYEFO) the Government provided $8.2 billion in new funding to 2018-19, bringing the total investment in land transport infrastructure to $34.5 billion.

The Productivity Commission is now calling for new submissions based on its draft report.

Its final report will be delivered to the Government in late May.

Topics: government-and-politics, building-and-construction, australia, nt

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