This report was prepared for the Australian Rural Roads Group — an alliance of rural local governments — to examine pressures on rural road systems and present recommendations for reform of rural roads funding. Importantly, it advocates structural change to how this asset group is planned, managed and funded across three levels of government.

The governments represented by the Australian Rural Roads Group together produce almost half of Australia's total agricultural product. However, the Australian Rural Roads Group claims that the roads that underpin their productivity are suffering from under-investment over many decades and that Australia is billions of dollars short on the funds needed to maintain and ultimately replace this infrastructure asset in the years ahead.

This paper presents 10 key pressures on rural local roads in some detail. Five comprehensive reforms to policy, funding and governance of these roads are then proposed in response to these pressures. Wider road tax and road policy reform directions are also examined in light of the five recommendations in this paper.