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Funding Local Roads Recommendations to Clear the Infrastructure Backlog

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Funding Local Roads Recommendations to Clear the Infrastructure Backlog Funding local roads Recommendations to clear the infrastructure backlog NSW & ACT local roads August 2017 Funding Local Roads | 1 About the NRMA Comments & Queries Better road and transport infrastructure has been Ms Carlita Warren a core focus of the NRMA since 1920 when our Senior Manager – Public Policy & Research NRMA founders lobbied for improvements to the condition of PO Box 1026, Strathfield NSW 2135 Parramatta Road in Sydney. Independent advocacy was our foundation activity, and it remains critical to who Email: [email protected] we are as we approach our first centenary. Web: mynrma.com.au We’ve grown to represent over 2.4 million Australians, principally from New South Wales and the Australian Capital Territory. We provide motoring, mobility and tourism services to our Members and the community. Today, we work with policy makers and industry leaders, advocating for increased investment in road infrastructure and transport solutions to make mobility safer, provide access for all, and deliver sustainable communities. By working together with all levels of government to deliver integrated transport options, we give motorists real choice about how they get around. We firmly believe that integrated transport networks, including efficient roads, high-quality public transport and improved facilities for cyclists and pedestrians, are essential in addressing the challenge of growing congestion and providing for the future growth of our communities. Funding Local Roads | 2 Introduction Our local road network is critical to how we move For the ACT, having one level of government only, the The lack of an effective long term solution will put around. Whether commuting for work, leisure or simply infrastructure backlog has increased more than 400 per greater pressure on the NSW local and regional road conducting our day to day activities, local roads support cent since 2010-11, with the cost of bringing the local network with road safety being the greatest concern. our communities. road network up to standard estimated at $53 million in The economic cost to local communities will continue to 2015-16 and rising to $71 million in 2019-20. increase if a suitable plan to adequately fund local roads Funding and responsibility for the road network is split is not implemented. between three levels of government; federal, state The deterioration in the condition of local council roads and local. Our geographic dispersion, low population assets has resulted in the reduced condition of the road To this end, the NRMA is seeking a long term solution densities, and widely separated cities means the cost of network, impacting the day to day movements of to address road infrastructure deficits to support and funding for roads has been a major fiscal issue for motorists especially in regional areas. Roads will become sustainable communities and safe mobility. all levels of government. less safe to drive on with the unintended consequence of more crashes on the local road network. This includes reforming road funding programs, Local councils are responsible for the maintenance returning a greater share of fuel excise to local roads, of around 80 per cent of the NSW road network. This The local council road network has a higher percentage pooling and rebuilding the engineering capacity road network in regional and local government areas of fatalities and injuries compared to state roads and the of regional local councils, and providing greater continues to receive inadequate levels of investment to motorway and freeway network in NSW. Road crashes opportunities for the private sector to contribute to the ensure an acceptable satisfactory road standard. cost the NSW economy on average total $7.1 billion per maintenance and development of the local road network. annum1. The cost of road trauma on local council roads Benchmarking local road assets will also provide greater The infrastructure backlog deficit across NSW has risen is estimated in the order of $5.3 billion, representing transparency as to the size of the backlog and priority 13.2 per cent from $1.73 billion in 2014-15 to 75 per cent of the total cost. infrastructure projects. $1.96 billion in 2015-16. For regional councils, the deficit has risen even higher, up 17.2 per cent from In addition, the existing local road network has not been We need a long term and sustainable solution to address $1.33 billion in 2014-15 to $1.56 billion in 2015-16, upgraded to accommodate existing passenger and the current infrastructure backlog and provide a sustainable with the Hunter and North Coast regions accounting freight movements, let alone deliver for future growth in level of infrastructure maintenance going forward. for 40 per cent of the total regional backlog. population or passenger movements. 1 NRMA (2017) The Cost of Crashes – An analysis of lives lost and injuries on NSW roads, May 2017 p.2 Funding Local Roads | 3 Recommendations NRMA recommends that the following options be 6. Establish Road Stewardship Maintenance contracts considered to address the current backlog of local to improve the delivery of road infrastructure in road infrastructure across NSW, and to plan for the regional NSW. future growth and use of the local road network. 7. Reform current Australian and NSW 1. Fast track funding of the Roads to Government funding programs for local councils. Recovery program. 8. Have the annual Special Schedule 7, Report on 2. Provide a percentage share of fuel excise levy Infrastructure Assets for Local Councils, financially to local councils to fund road maintenance. audited to improve the accuracy for determining funding and infrastructure requirements. 3. Expand the local government Infrastructure Backlog Fund. 4. Provide Local Government with low interest region specific infrastructure and investment funds, and region specific funding similar to the Hunter Infrastructure and Investment Fund. 5. Aggregate the measurement of specific road asset management benchmarking, and consolidate regional road infrastructure planning. This also includes rebuild of the diminishing engineering capacity in most regional councils. Funding Local Roads | 4 Background 3.1 Infrastructure deficits Many local councils, particularly in regional NSW, Table 1: Local council road infrastructure backlogs 2014-15 and 2015-16 $ million have growing infrastructure backlogs. This backlog Council Infrastructure backlog % Change % of total is not only occurring in roads but also in other infrastructure backlog critical public infrastructure assets including water, stormwater, and recreational facilities. 2014-15 2015-16 2014-15 2015-16 Metropolitan Councils 399.8 398.2 -0.4% 23.1% 20.3% For many councils their diminishing financial capacity Regional Councils 1,331.0 1,560.4 17.2% 76.9% 79.7% to maintain the local road network to a satisfactory standard has resulted in their service provision being Total 1,730.8 1,958.6 13.2% 100.0% 100.0% comprised. A deteriorating road network has resulted in greater traveling times, increased probability of car crashes, and lost economic productivity. An infrastructure backlog occurs when the road network is not performing at its optimal level. This NSW road network occurs when road standards are comprised. Reduced The NSW road network is around 184,859 km in length. expenditure leads to lower maintenance and asset Eighty per cent of this network is classified as local enhancement expenditure, which in turn lowers the roads which are funded and managed by local councils performance of the asset base for road users. (see Table 2). Councils also own and manage the land adjacent to all public roads other than freeways. The regional council road infrastructure backlog has risen $230 million in 2015-16 to $1.56 billion. Roads and Maritime Services (RMS) is responsible for This backlog represents 79.7 per cent of the total the management of the remaining 18,028 km (20 per infrastructure backlog, up from 76.9 per cent in cent) of the major arterial road network in NSW, (“State 2014-15 (see Table 1). Roads”), and provides funding for councils to manage 18,257 km of state-significant regional roads. RMS also The unsatisfactory condition of road assets and manages 2,970 km of roads in far western NSW where reduced maintenance, along with limited asset there is no council jurisdiction. management has highlighted the inability of councils to deliver normal services. 2 Roads & Maritime Services road network responsibility facts as referenced from website, dated 22 June 2017 http://www.rms.nsw.gov.au/projects/key-build-program/maintenance/road-network-responsibility.html Funding Local Roads | 5 According to the NSW Local Government Grants 3.2 The cost of road crashes and the Using the annual Cost of Crashes estimate of around Commission Report 2015-163, the total local road impact on local communities $7.1 billion, and the 2015 percentage splits in Table 3, network in NSW comprises the following: In May 2017, the NRMA released its Cost of Crashes the cost of road trauma on local council roads equates report analysing the cost of casualties on all NSW to around $5.3 billion. The corresponding cost on state Table 2: Local road category and length (km) – roads. The report found that over the period 2011-15 roads would be $1.6 billion, and $0.2 billion on the controlled by local government councils the cost of casualties, that is, lives lost and serious, motorway and freeway road networks. moderate and minor injuries, cost the NSW community Road Type Kilometre $35.7 billion4. The cost of not having a proper base to maintain local Coverage (km) roads in regional centres will have a negative impact Urban Local Roads 32,824 In addition to managing the majority of the NSW road on the safety of local communities, in addition to the network, local council roads continue to have higher continued deterioration of the local road network.
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