Commuters should pay to use highways, Commission say

USERS of major public infrastructure such as major highways should be forced to pay for the privilege, saving governments up to $1 billion a year, a draft report from the Productivity Commission says.

The report, released on Thursday, found an "abundance of flaws" and "forgone opportunities" in current practices for funding and finding major infrastructure projects.

While the Prime Minister Tony Abbott has declared a preference to be known as Prime Minister for infrastructure, among other titles, the report finds major reforms are needed to get the best bang for the Commonwealth's buck.

The report said that ultimately taxpayers or users "must pay for infrastructure", and while many projects would still need public funding, private capital investment was needed.

Commission chairman Peter Harris said governments "have it in their power" to attract more private investment, even in the presence of "apparent borrowing constraints".

"They can do this through the judicious use of pricing mechanisms and by collectively establishing stronger transparent processes for project identification, selection, design and implementation," he said.

The report highlighted "road user pricing" and a need for future pricing of new and upgraded roads to "resolve this last large vestige of unpriced public infrastructure investment".

For road users, that would mean more tolls, or other mechanisms in addition to the tax they pay, for the privilege of using new and upgraded roads around the country.

"A longer-term transition to direct road pricing generally, with a start now on pilot technology studies to test the idea, should be the preferred objective for governments," the report reads.

However, the report also said that perceptions of a crisis in productivity or "undue wage breakouts" were misplaced, with cost pressures falling with the slowing of the mining construction boom.

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