What about petrol at 70c per litre and no rego fees?
Regions should back the push from Infrastructure Australia to implement road user charges in Australia.
The state of the roads in regions is a constant bug bear for regional people. Poor local roads and the time it takes to upgrade even major highways is a source of major frustration.
Last week Infrastructure Australia put their weight behind the only plan that has a shot at genuinely fixing this issue. That plan is moving to road user charges where we use technology to track vehicle use and road users are then charged for the amount they use the roads.
Under the current broken system roads are funded by a hotchpotch of taxes. The two big ones are the 40c per litre fuel excise which covers about 46 per cent of the costs and registration, licence fees and stamp duty on cars which covers about 32 per cent of the total cost.
Under a road user charging system, these taxes would be abolished. Each road user would be charged based on kilometres travelled. Adjustments to the charge would be made depending on size of vehicle (because truck use requires more maintenance than a motorbikes) and where and when you drive (to manage the congestion problem in cities).
It’s a big change, but there are big benefits that will make you sit up in your car seat and take notice.
Firstly, the tax you pay for road use will be spent on the roads you drive on.
This has to be better than the current situation where excise and other road taxes flow into general revenue and are available to be spent anywhere in the network, or not on roads at all.
Secondly, fuel excise and registration fees would be abolished.
This means you would pay 40c less per litre of fuel and spend less time and money at the Roads and Traffic Authority getting permission to use the road.
Thirdly, if you spend little time on the road, you don’t pay.
Currently the pensioner in Tamworth or Leeton who only drives to the local shops twice a week pays full rego and fuel excise. The farmer who registers his tractor or farm bike for occasional road use, but hardly ever takes the vehicle on the road, pays full rego and in many cases full excise. Under a road user charges approach both would pay much less.
Their insurance could be much lower as well because it wouldn’t be long before insurance companies were offering policies where you pay per trip rather than a large annual fee.
Finally it should be much less paperwork. No tax forms or log books to claim diesel fuel rebate. You just pay for what you use, when you use it.
What are the arguments against it?
One that will surely come up is privacy, as user charging must in some way track how far and where you are driving.
If you are worried about that I hope you don’t have location services enabled on your smart phone. If you do, you are already giving Google, Apple and others the information this initiative would need.
The other will be the noise coming from those who have to pay a fairer share of the cost of their road use, rather than relying on pensioners and farmers to top them up as they currently do.
It’s fairer a system and I am sure we can find a way through the privacy issues. However, if we let these issues hold us back from looking at this opportunity, the local infrastructure deficit (last estimated at $15bn+) will continue growing every day.
Road user charges are a big change but they just might work and the benefits for regions could be substantial. Infrastructure Australia has recommended to the government that we get on with the detailed work on how road user charging could be brought in.
At the Regional Australia Institute (RAI) we look for opportunities to make our regions even greater – road user charges are a no brainer.
So, as your bones shake and your back hurts on the way out of the next pot hole you hit, think about getting behind it and let’s see if we can get some bipartisan support for a big reform.
Jack Archer is CEO of the Regional Australia Institute.