Equity aspects of toll arrangements
The regional impacts of tolls
Several submissions noted the regional inequity of tolls. People who
live in the inner city generally have good access to nearby services on roads
that were paid for by the public. There is a random element:
...Sydney's road network was developed as a series of
incremental concessions, not as an integrated network...this organic growth
sees, for example, the Westlink in Sydney tolled both ways on a distance basis,
while Sydney's earlier M2 is a flat rate and the publicly-owned Harbour Bridge
and the privately-held Harbour Tunnel see a low, medium and high toll that
varies on the time of day but only in one direction. People in Sydney's
north-west pay a lot to come to the CBD, while people in the south-west can pay
nothing because of Cashback...
There is, however, a systematic inequity. People living further from the
city, who tend to be less affluent, are dependent on toll roads to get to work.
Those with the least capacity to pay, who have been forced to
compromise with the lowest cost homes located furthest from the CBD are
subjected to the highest costs to travel to gain high value employment closest
to Sydney CBD.
And in Melbourne:
The inevitable conclusion...is that wealthy, well-educated
people with good jobs will live in the inner city and pay nothing, and the hoi
polloi will live out in the boondocks and will be charged for the privilege to
come in. That would lead to the sort of South African slum you have beside a
white township...There is a primary school classroom being born in Werribee every
week. I cannot accept that it's good public policy to say that we should make
all those people pay more for everything because they use it more because they
live further away.
Tolls can be a significant cost to households. The Western Sydney
Regional Organisation of Councils estimates a daily return trip from the 'North
Western Growth Centre' to the city at $27.62 a day.
This comes to $138 a week, or 9 per cent of average weekly ordinary time
or 20 per cent of the minimum weekly wage.
Transurban's submission indicates that 4 per cent of its New South Wales
consumer account holders pay between $50 and $125 a week.
Several submissions and witnesses called for reductions of tolls on the
basis of need. Others argued that regular users should be charged less per trip
than occasional users. They conceded that it might be difficult to implement.
Mr Scott Charlton of Transurban argued that toll roads offer value. He gave
the example of a commuter paying $120 a week in tolls travelling from the
Central Coast. He would be saving about six hours a week by travelling on the
tollway. If his wage rate was $50 an hour, '...he would be making an extra $180 a
The regional inequity works partly through the costs to local
[The Westgate Tunnel tolls] would be an additional cost on
the transport industry and local businesses in an already very competitive
market with low margins and presumably the costs would eventually flow on to
consumers through higher priced goods.
A part of the logic of tolls is that they will be paid only by those
willing to pay for the extra amenity of toll roads. Those not willing to pay
will use alternative transport, either other roads or rail. But for some toll
roads there is no reasonable alternative.
The impacts of tolls on businesses
Tolls can be a substantial issue for businesses. The National Road
Transport Association complains that the methods of setting tolls are not
transparent. Trucks in fact do not have an alternative to paying tolls, as
there are regulations to force them to use the tollway rather than side
streets. Trucks already pay more for road maintenance through registration and
fuel charges. Further, tolls can be varied:
In April 2017 Transurban increased the toll for heavy
vehicles using CityLink in Melbourne by up to 125 per cent to fund the
CityLink-Tullamarine widening project not due for completion until 2018. In
comparison, tolls for light vehicles were increased by only 5 per cent.
The association calls for a national approach to tolls and an independent
Associate Professor Russell Thompson argues that trucks avoid tolls,
because they cannot pass on the costs or benefits of using the tollway. This
imposes costs on people living on or near the roads they use. He says that prices
should be set to encourage users to move goods at the lowest cost, taking into
account externalities such as congestion and pavement damage.
Perhaps the biggest issue to do with tolls is what happens when they are
unpaid. The issuing of toll notices for unpaid tolls and the resulting
enforcement processes if the toll remains unpaid are regulated through the contractual
agreements in place with state governments.
Before the introduction of electronic tolling, compliance with payment
of tolls was in all probability very high because of the manual collection
methods employed and an exact fee charged. Now the processes are less
The submission from WEstjustice sets out the issues very clearly for
Operators often cannot notify a person who does not have an account with
them of an unpaid fine. While they can read car registration plates, the
address linked to the registration may not be current, or the driver of the car
may not be the registered owner, or the driver may not clear their mail or have
the language skills to read the notice.
If a toll is not paid automatically, an invoice is issued with an
'administration fee'. This fee is $12.14, even though the Victorian
Auditor-General in 2002 found that a cost-based fee of between 28 cents and 93
cents could be justified.
Through various stages of reminders, infringement notices and enforcement orders,
up to an infringement warrant, the total cost of a single unpaid journey
escalates over a period of a few months to $345. This amount is charged for
each day of unpaid travel.
Many people end up with unmanageable debt, which goes through the
Magistrates' Court: Mr Denis Nelthorpe, of WEstjustice, recounted the example
...an ageing Indian grandmother who had brought up her grandson
after the mother had died. He had, unbeknownst to her, registered his car in
her name and driven up and down. She was carted off to court for $200,000.
He said that outstanding fines of between $20 000 and $200 000
are becoming common. In the last resort, failure to pay can result in
imprisonment. WEstjustice presents figures of unpaid infringement warrant debt:
warrants for toll fines totalled $687 million in 2015.
Geographically, infringement debt was disproportionately concentrated in
outer suburban communities with higher rates of disadvantage. The fines, when they are paid, divert money from already
disadvantaged local economies.
WEstjustice says that toll fine infringements are jamming the Magistrates'
Court. They observe that the Royal Commission into Family Violence recommended
removing minor traffic matters from the courts so that more serious issues
could be dealt with.
They note that toll prosecutions are the 'number one offence' in the Victorian
Magistrates' Court, ahead of theft, and that 73 per cent of tolling
infringements proceed to court, compared with 24 per cent of other offences.
WEstjustice notes that the toll operators do take steps to keep the
tolls out of court. It further observes:
The toll operators do not obtain a significant economic
benefit from this system, particularly in the absence of evidence that the
punitive system is driving high rates of compliance.
The system is similar in Queensland. A small unpaid toll quickly
ratchets up through administration charges and infringements fees:
[The system is] critically reliant on contact details in the [Department
of Transport and Main Roads] database being current. If a person does not
update their mailing address with TMR, the person will not receive any of their
notices (invoice and demand notice from the toll road operator, penalty
infringement notice from TMR or enforcement order from SPER [the State
Penalties Enforcement Registry]). They may not be aware they are under
enforcement until SPER undertakes data enrichment (to source a new address when
notices come back to SPER as 'return to sender' for example) and eventually
makes contact with them or when pulled over by police while driving and are
advised that their licence is suspended.
There the total of toll-related debt in the State Penalties Enforcement
Registry is $233 million. The submission by Toll Redress presents a concerning story
of a debt that had escalated to $30 000 plus loss of driver's licence. (The debt
was eventually waived by Transurban.) Toll Redress says that
Existing escalation arrangements enslave people in a vicious
cycle of confusion, stress and financial strain.
This submission points out that toll notices are often not received by
the person for whom they are intended.
It questions the rationale for toll road operators' 'administration charges',
given that they vary hugely from state to state, and sometimes two
administration fees are charged in the same letter.
It is worth noting that the amount of toll infringement debt in
Queensland fell sharply in 2016–17, after rising in the previous two years. No
reason has been suggested for the fall.
New South Wales
In Sydney the situation does not seem quite so bad, partly because the
fines are less likely to end up in court. Non-payment of tolls is recovered
through the civil debt system. Debt collectors are engaged by the road
operators, and the amount recovered is the toll plus an administration fee.
Consumers are protected by hardship arrangements and debt collection Codes of
Practice. There is a cap on the number of infringement notices that can be
issued each month, currently 300 per road (compared with over 58 000
infringements issued per month on CityLink in Victoria). These are dealt with
in the criminal system, but unlike Victoria where each day of unpaid travel
results in a separate fine, a single fine is used to penalise a course of
The system has elements of a lottery, but it does mean that the overall
impact is considerably less.
The fines that accrue are in the region of $1000 to $3000, which is more
manageable. The total amount of infringement debt for unpaid tolls in New South
Wales has been estimated at $97 million.
The rate of unpaid tolls in New South Wales is possibly reduced also by
the government's cashback scheme, which gives residents a rebate of their tolls
for the M5.
The operators' view
Transurban argues that toll roads are different from other utilities. In
the event of an unpaid power bill the authority can cut off the power, whereas
it is impossible to exclude people from roads. It says that it takes
considerable trouble to contact the customer and make suitable arrangements
before it resorts to an infringement notice, partly because more than 90 per
cent of infringement recoveries are retained by the state authority and
Transurban often does not recover its costs through the process.
Transurban has a financial hardship policy in place. WEstjustice argues
that it is of limited usefulness as it applies only for the period before a
matter finds its way into the legal system. If it is not accessed in the first
60 days, it is not available.
Toll Redress points out that the hardship policy does not apply to business or
The Tolling Customer Ombudsman
Transurban funds, with other operators, the Tolling Customer Ombudsman
(TCO), a service to help people deal with toll and fine notices. Customers can
choose to use the service, at no cost. Complaints may be resolved by way of
conciliation, mediation or arbitration and the parties may negotiate a
settlement at any stage. TCO decisions are binding on the toll operators but
not the toll road users or customers, who retain all legal rights.
Both WEstjustice and Toll Redress have noted that the TCO does not meet
the Attorney-General's Department guidelines for industry complaint schemes.
Further, there is no customer input into how it is run. It is also of limited
usefulness for the same reason as Transurban's hardship policy: it is relevant
only before infringements get into the legal system.
The TCO concedes that the narrowness of the jurisdiction made it
inappropriate for the service to be established as a fully compliant industry
complaints body. However, the service was informed by the same principles as
those bodies. Currently all private toll operators in Australia contract with
the TCO for it to provide an independent service in which it is guaranteed that
there will be no conflict of interest in decision-making.
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