A report was released on a Treasury website last week that proposes a conceptual framework for reforming taxes relating to road use and transport. It is a big report (104 pages) dealing with everything from petrol excise tax to Pay As You Drive insurance.
Real’s Pay As You Drive car insurance features in the report as the first (and only) insurance product with premiums linked directly to kilometres driven. It is good to be mentioned!
Anyway, the report is quite technical, but makes far ranging and courageous recommendations including proper taxing for road use by using telematics.
I think the biggest single obstacle for proper charging for road use and a removal of negative externalities is public opinion. I am amazed at the irrationality of some objections, and for others I can understand the change being perceived as unfair for a specific person. The fact is people have been using roads without much direct charge for how much they use the road (they still pay for it through other taxes). So to now accurately charge mean that some people will suddenly pay a lot more (because they use more). And this creates noise. Just think of the noise created when the cross-city tunnel fees change.
There is a perception that roads should somehow be free (one commentator said “OUR RIGHT TO UNFETTERED ROAD USE”). A significant amount of education will need to take place before proper charging for road use will have any chance of being implemented.
A large part of the emotion is addressed at the public transport system. So people that claim they have to drive because the public transport system is insufficient, claim that to tax them for driving their cars is unfair.
So here’s the typical argument: The only house I can afford is far away from the city, where there is no public transport. So I have to drive. Why should I pay for road use when the rich people who can afford to live in the city or close to the train station don’t have to?
Tough question. An answer is that if road use is properly charged for, then property away from the city or not close to public transport will become cheaper (less demand) and visa versa. So the person that made the argument above would have paid a low price for their property. The “rich” people have paid for the benefit of not having to drive through expensive property. The answer of course does not work when you have to change road charges, as the person who already owns the undesirable house will be even worse off, and have to pay for driving to work…
An article appeared in the Herald Sun, following the RACV making suggestions similar to the tax report above. To illustrate the emotion, have a look at some of the comments posted on the Herald Sun website:
Let's see, I live in the outer suburbs as I cannot afford the inner city house prices. I don't have Public Transport as it is not deemed as a reasonable use of Government funds to send the train lines out everywhere. Local councils have stuck metres at local parking areas that service train stations nearby. Now they want to tax me to drive further to work? Come on who is making these decisions?
Posted by: Stephen of Melbourne 10:18am August 28, 2008
This is a ridiculous idea! Watch the cost of everything go up then...for example...as a tradesman -No more free quotations, extra charges on quoted works for transport & handling costs..get the idea. These taxes will no doubt filter into costs of everyday living expenses...haven't we got enough pressures already?
Posted by: EJ of MELB 10:17am August 28, 2008
The first thing that should happen if this type of lunacy is adopted is for all people in this country launch a class action with the anti discrimination comission. It's not my fault that I can't afford an appartment in the inner city, it's not my fault that the only place I could buy a house I can afford is 30km from where I work nor is it my fault that I would have to travell further if my employer moves to larger premisis. And for all of you that are now madly tapping away at your keyboards to tell me I should use public transport here are the facts. When I have to start work at 6:00 am (first shift), there is not train or bus that allows me to get into the city for the line change to get to work on time and on the regular occasions when on night shift that I am required to be there after 11pm there is no way for me to get home other than by taxi ($115.00) due to the 3 zones that te taxi crosses, lastly lets not forget that this in an unreasonable (& possibly unconstitutional) impost on the taxpayer based on their usage of infrastructure for which we already pay taxes irrespective if it replaces fuel exise and registration.
Posted by: PaulM of Brisbane 10:08am August 28, 2008
What an outrageous invasion of privacy.
Posted by: Ophelia of Victoria 9:54am August 28, 2008
What a joke, once again pick on the workers, make it harder forthem to get ahead and give their kids a better life. FIX THE TRANSPORT SYSTEM and your problems will go away!!
Posted by: Joe 9:53am August 28, 2008
When will people wake up that personal privacy is the MOST important thing they possess in a democracy. This "idea" is one of the most malicious and scary that I have seen. Please, please DON'T underestimate the value of YOUR privacy. Once they take it away it ain't coming back!! They use all sorts of spurious excuses like congestion, crime and terrorism to try to impose government control. If you actually want to live in such a place, then simply book a ticket to Russia. Average australians are too apathetic or stupid to understand the full import of these attempts to remove personal liberty. WAKE UP!!
Posted by: Jason Thornton of Melbourne 9:46am August 28, 2008
Another exercise in the total regulation of private motoring , suggested by the most anti motoring cadre in Australia ..the allegedly pro motoring Automobile clubs , infiltrated and controlled by Left wing greenies to a man .Don¿t join them and don¿t support them .ITS GOING TO ELIMINATE YOU YOUR RIGHT TO UNFETTERED TRAVEL. Allied to carbon taxes you wont be able to move anywhere without Government sanction. Even if you see Aunt Jane some faceless bureaucrat will know you did so twenty years from now as it¿s a permanent record .Fancy that?
Posted by: frankly fed up of melbourne 9:30am August 28, 2008
City- centric once again. Presumably consessions would be built in country drivers and even those in outer suburban areas otherwise such a tax would be yet another example of the way beauracrats in this state think Victoria consists only of the city and its suburbs.
Posted by: Robert of Woodend 9:27am August 28, 2008
All very well for people who can afford to live near & work in the city. There are a lot of people out here like me who would need to take a bus, two trains & a tram to get to & from work and it would take me two hours each way. As for buying a smaller car - who can afford to buy a new car?? Once again suggestions that are geared to help the better off in the community.
Posted by: Kate of Melton 9:12am August 28, 2008
This is not going to be easy change to introduce, regardless of how correct it is.
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