Australia

Local roads to receive $1bn-plus over two years following fuel excise changes

COUNCILS across Australia will receive an extra $1.105 billion over the next two years from the Australian Government for local road and street works following the reintroduction of Consumer Price Index-linked fuel excise.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss said every cent of the extra $23 billion revenue raised through the excise over the next decade and beyond will be invested in roads infrastructure.

Great Northern Highway, Western Australia
Above: Great Northern Highway, near Payne's Find, Western Australia / by Phillip Capper.

"The Government has reached agreement with the Labor Party for the passage of the fuel excise indexation legislation, an important element in our Budget repair plan," Mr Truss said.

"As part of our ongoing commitment to road infrastructure, we will provide an additional $1.105 billion specifically for the Roads to Recovery Programme over the next two years.

"This popular roads programme was introduced by the Howard/Anderson Government. Since coming to government, we have expanded it and made it permanent to give local government and their communities the surety they need that local roads will be future-proofed."

Mr Truss said the means that local governments across Australia will receive an extra $300 million in 2015–16 under Roads to Recovery, on top of the $700 million they are already receiving.

"In 2016–17, local government will receive an extra $805 million in addition to the $350 million they were already scheduled to receive under Roads to Recovery—$1.155 billion next financial year.

"Since the programme began in early 2001, councils have used the funding provided to repair and upgrade more than 45,000 local streets and road locations, making it the largest investment in Australia's local roads ever undertaken.

According to the government, tying the indexation of the fuel excise to changes in inflation will allow for a more predictable and guaranteed source of revenue.

"For a motorist who consumes 50 litres of fuel each week, the impact amounts to just 40 cents, an impact that will be minimised through congestion-busting road infrastructure," Mr Truss said.

"Importantly, the Roads to Recovery Programme allows councils to directly fund local road projects based on local needs, with local knowledge playing a major role in the programme's success."

The fuel excise will increase twice a year in February and August, in line with movements of the Consumer Price Index.

The extra $1.105 billion being invested in Roads to Recovery will be paid to councils under the usual formula as part of their regular quarterly payments without any requirement for councils to match the extra money.

Photo: Great Northern Highway, near Payne's Find, Western Australia / Phillip Capper / Licensed under Creative Commons BY 2.0.

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