2022 Corporate Report

Corporate Report for the year ended 30 June 2022

Introduction and overview

Business performance

Governance and risk

Directors’ report

Remuneration report

Financial statements

Sustainability supplement

Security holder information

Global trends

Transport costs

On the back of two years of disruptions across multiple sectors, geo-political factors including the Russia-Ukraine War and climate-change related floods and droughts have led to rising costs for consumers across the globe. The average amount a customer spends on tolls remains a small proportion of typical household expenditure, 2 and on average, our Australian customers spend $6.70 per week on tolls, with 81% spending less than $10 per week. 3 The majority of our Express Lanes customers in the US spend less than USD8 on each toll. Our July 2022 research into mobility trends found that while 63% of Australian respondents were concerned about fuel prices, other transport costs such as public transport (9%) and tolls (8%) were less concerning. However, we recognise that a proportion of our customers are frequent toll road users. We are undertaking detailed analysis to better understand spending patterns of frequent users from economically vulnerable areas and also offer our Linkt Assist (Australia) and First Time Forgiveness (US) to those customers who need support. We also recognise the impacts on our commercial customers and will continue to work with them on a case-by-case basis.

Developing trends and advances in the infrastructure and transportation sector present new opportunities but also potential disruptions. We keep a close watch on the external factors that may impact our business’ operations. Confidence is returning to our cities. International borders have reopened, airports are bustling and traffic is nearing pre-pandemic levels as most of the world emerges from almost two years of restrictions. While new issues—from supply chain bottlenecks to rising costs—are testing governments and communities, some of the familiar challenges facing our cities have also resurfaced. Pre-pandemic, many of our cities faced the prospect of congestion on both roads and public transport, reducing productivity and quality of life. Now, as traffic has returned, so have the traditional rush hours. External surveys commissioned by Transurban since July 2020 have consistently found respondents have an increasing preference for private vehicle travel over public transport. In our January 2022 survey, an average of 16% more people, across Sydney, Melbourne and Brisbane and 7% more people in the Greater Washington Area said they intended to use private vehicles every day post-pandemic, compared to pre- pandemic. Ongoing concerns over personal health and safety are contributing to that shift. If the trend continues, road networks are likely to face further pressure.

At the same time, many cities also have a significant backlog of transport projects and face the added prospect of a shortage in skilled labour. In Australia, skilled visa numbers have been declining for the past five years, contributing to a labour shortage that has been exacerbated by pandemic- related border closures 1 . With multiple city-shaping construction projects underway and many more planned or in development, addressing this issue will be vital to maintain the delivery of much-needed infrastructure projects. Meanwhile, keeping our cities moving efficiently to avoid a return to the peak- hour crushes of the past will require some innovative thinking. Flexible work arrangements that have been so prominent during the pandemic provide an opportunity to manage demand on transport networks, by shifting commuters away from traditional peak hours. In Australia, the NSW Government has also flagged the potential to change long-standing school hours as another option to help manage congestion. Our traffic data shows that even small shifts in travel behaviour can have a big impact on congestion and help transport networks operate most effectively. At Transurban we have offered flexible work arrangements for some years, including investing in technology to allow our employees to work remotely. We encourage employees to consider options such as flexible workday start and finish times. However, we recognise that flexible work as a way of addressing mobility constraints requires a coordinated approach between public and private sectors. In response, we have promoted a ‘Beat the peak traffic’ campaign, inviting drivers to shift their travel patterns—and potentially save up to 1.5 hours travel time a week. This campaign capitalised on the new flexibility many workplaces have retained since pandemic- related restrictions have eased.

Funding future road infrastructure

The rising cost of fuel has led to several governments temporarily cutting fuel excise. The Australian Federal Government has halved fuel excise to 22.1 cents a litre for the six months leading to 28 September 2022. In March 2022, the Maryland Government in the US suspended fuel excise for one month. Net fuel excise in Australia has been declining in real terms for decades due to more fuel-efficient and zero emissions vehicles (ZEVs) and the gap between revenue collected and funding needed to build and maintain transport infrastructure is ever widening. The current fuel excise regime also presents equity issues. As the world works to decarbonise its transport systems by encouraging the adoption of ZEVs, 4 drivers with older and less fuel-efficient vehicles will inevitably pay more in fuel excise.

1 T he Age (2022) ‘We’ve got a crisis. We need workers’: Big business urges election winner to boost migration. Accessed 30 June 2022 2 A ustralian Bureau of Statistics and internal Transurban analysis 3 A ustralian customers traveling in a private vehicle (July 2021 to June 2022) 4 P er kilometre travelled compared to drivers of fuel- efficient vehicles or ZEVs

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