The Federal Interstate Registration Scheme for heavy vehicles is set to be phased out over the next 12 months to be replaced by a system with less red tape.

Labor is supporting a government bill to repeal the scheme that cabinet minister Josh Frydenberg says was introduced 30 years ago to address a lack of uniformity between state and territory registration schemes for large vehicles.

The scheme's closure would make way for a modern national registration system that better served the needs of the transport industry, he told parliament on Wednesday.

The existing scheme would be closed to new entrants and for re-registration from July 1 this year, and closed completely from June 30 next year.

Labor's transport spokesman Anthony Albanese said the transition period was sensible and the change to a new scheme was a logical next step.

"Our road transport system needs one set of laws, one set of registration and compliance papers, one logbook and as little red tape as possible," he said.

Australian Associated Press