News

Australia’s transport and logistics sector has an important opportunity to help shape a more stable, equitable and transparent approach to heavy vehicle charges as the National Transport Commission (NTC) opens consultation on its forward-looking cost base project.

Operators of vehicles over 4.5 tonnes currently pay an annual registration fee and a road user charge on liquid fuels set by Australia’s infrastructure and transport ministers. These help governments recover the costs of building and maintaining the road network for use by heavy vehicles. 

The charges are determined using a PAYGO (pay-as-you-go) methodology which sets a cost recovery target based on government road spending over the course of a year. Because road expenditure can vary significantly from one year to the next this method can result in volatile charges.

It can also create inequities as operators using the network in a given year may end up paying the full heavy vehicle share of major infrastructure built during that period, even though the assets may deliver benefits for decades. 

Road spending has risen sharply in recent years, and annual charge increases have failed to keep pace with costs. This gap between heavy vehicle-related road costs and charge revenue is expected to persist. 

Recognising the challenges, ministers have asked the NTC to explore a better approach to setting heavy vehicle charges and establish a cost base that smooths the “lumpiness” created by spending spikes and troughs, delivering greater pricing stability and predictability for industry. 

“A more stable charging framework where prices are set for multiple years will allow operators to plan with confidence, incorporate anticipated cost movements into long-term contracts, and make more informed investment decisions,” NTC Head of Economics Ramon Staheli said. 

“Importantly, it will also support a fairer allocation of infrastructure costs across generations of road users.” 

Other regulated infrastructure sectors such as water and electricity networks use a forward-looking methodology to improve stability, predictability and long-term cost recovery. Consistent with this practise, the NTC, in collaboration with industry and governments, has developed a forward-looking cost base model for setting heavy vehicle charges in Australia.

Public consultation on the proposed design is now underway supported by a Consultation Regulatory Impact Statement (C-RIS), which outlines the proposed cost base model and a range of hypothetical implementation options that could be used to set heavy vehicle charges from 2027–28 onwards, subject to ministerial approval.

“Under the proposal, heavy vehicle road charges will be based on forecast expenditure, and at the end of the pricing period we will compare the forecasts with actual expenditure,” Mr Staheli explained. “If we’ve collected too much, we will return it to industry with interest. If we haven’t collected enough, the shortfall will be incorporated into future regulatory periods over time. It’s the real expenditure that matters and not the forecast, so industry won’t be paying for plans that are not delivered.” 

The C-RIS recommends a three-year price path to replace the current year-on-year charging model, giving operators greater certainty in planning going forward, Mr Staheli said. 

“Forward looking cost base models are inherently more stable, but they’re also complex,” he noted. 

“How they perform depends on a range of detailed settings outlined in the C-RIS. We want industry to give us their views on what we’re proposing and provide feedback on the proposed metrics and how the model would operate in practice. 
“This will help to fine tune the new approach, ensuring it reflects operational realities while promoting transparency, equity and long-term sustainability.” 

Online information sessions will be held to explain the proposal and submission process, along with industry meetings in every state and territory which industry are encouraged to attend.

More information and the C-RIS documents can be found on the NTC website at https://www.ntc.gov.au/project/developing-implementable-forward-looking-cost-base 

Consultation closes Thursday, 21 May 2026.
 
For more information visit the NTC website.