Road users must pay, sooner rather than later

Cross-posted from The Conversation:

The idea of motorists paying for the roads they use beyond tolls, fuel excise or registration fees has taken hold in Australia. A user-pays system might replace existing fees with charges based on motorists’ actual use of roads. New technologies would allow charges to be applied at different rates during peak periods in the same way we pay for the use of telecommunications or electricity networks.

The Henry Tax Review, the Harper Competition Review, the Productivity Commission’s Public Infrastructure Inquiry, last week’s AFR National Infrastructure Summit, and now the Australian Automobile Association, agree it’s time. But politicians aren’t sure it will pass the “pub test” with voters.

A user-pays system is necessary to reduce congestion on our roads and improve productivity into the future. We must have a debate over how, not if, we should implement a road user-pays system. But chances are political debates will send the user-pays idea down a rabbit hole before it even begins.

Can it pass the “pub test”?

No politician wants to be the one who implements a user-pays system for roads. But while the jury is still out on whether motorists support the idea of user-pays, the current fuel excise hits those who can least afford it the hardest.

A well-designed user-pays system would be fairer. And road users would know exactly what they were getting for their money.

There can be no such thing as a simple debate about transport reform. A debate about user-pays must cover:

The debate will be intense. But business-as-usual will only lead to mounting congestion in our cities, decreased productivity and ultimately a decline in our standard of living. And it will be very difficult to implement the necessary reforms without a user-pays system.

Pricing and charging are not the same

Two important issues must be considered separately in the debate: pricing and charging. First, there needs to be a way to recognise the price – the amount consumers are willing to pay for using roads – relative to the costs associated with the funding, construction and maintenance of roads. Second, there needs to be a way to charge users for actually using the roads where the amount charged reflects the price.

Much of the political debate will likely focus on charging, though pricing will be the major reform. Even though voters are already paying for roads, they don’t really know how much and the contribution has little to do with their actual use of roads.

Without accurate pricing, we can only guess at how to prioritise road construction and maintenance. In the absence of such market information, simply building more roads will not address the underlying issues.

Although a simple per kilometre charge is supported by many, accurate pricing would mean different charges to reflect demand. This may require a combination of per kilometre and congestion charging. Also, charges would need to vary to reflect how much motorists would be willing to pay under different circumstances. A broad user-pays system might even encourage more flexible work practices as the cost of commuting becomes more transparent.

But there are many sticking points. For one thing, the Australian Motoring Enthusiasts Party is opposed to any user-charges for existing roads, even though road pricing may make it fairer for motorists in regional areas.

We can’t afford another GST ‘birthday cake’

The introduction of road pricing may prove as difficult – if not more – than the introduction of the GST. That took 30 years to happen. Can we really afford to wait that long?

At 650 pages, the Coalition’s Fightback! policy was known as the “longest political suicide note in history”. But more than two decades later, most of Fightback! has been implemented.

However, the GST debate was less complex than the road user-pays debate is shaping up to be. For one thing, John Howard had the backing of the States to introduce the GST. The introduction of road pricing will require getting the States on board again, but in an area that is clearly within the States’ constitutional powers.

Prime Minister Tony Abbott’s relationships with Queensland and Victoria are far from congenial. And transport reform is shaping up to be a major issue for all levels of government. So it is not difficult to see why politicians “are wary of a voter backlash ” over transport reform.

Media one-liners will hinder reform

To make matters worse, the complexity of transport reform will be more difficult to explain in media-grabbing one-liners than the impact of the GST on a birthday cake. And history suggests that another “birthday cake” incident has the potential to put transport reform on hold for several years.

We cannot put all of the responsibility on our politicians. Sensible debate with large-scale community support for reform is essential. Otherwise, achieving transport reform will make the implementation of the GST look like a political cake-walk.

In the meantime, whether user-pays happens now or in the future, the longer we wait, the more we will pay.

Article by Michael de Percy, Senior Lecturer in Political Science at University of Canberra

Unconventional Economist


  1. Sigh. This shit is retarded.

    Know what’s hard to administer and creepy?

    Stalking everyone’s every movement.

    Know what’s really really easy to administer and damn close to near enough?

    Restoring the fuel excise.

    Another Howard fuck up. Now we’re literally discussing using stalker technology to solve a politically caused nonproblem.

    If you really have to catch the electric cars that’s also simple. Special meters on the chargers. If you can afford to stalk people, you can also afford to install smart meters with different tariffs.

    • BoomToBustMEMBER

      Couldnt agree more, I will never support a user pay system for the roads. Never. This is the thin end of the wedge, first they only use the data to calculate how much extra tax you pay, then in 10 years once that has settled in they start monitoring your speed, and all your GPS locations. Before long they know exactly where you are, where you have been etc etc.

      The other side effect is people will stop going out on weekends. From my place to a decent beach around Rye is 1 hour, I would use Eastlink (tollway for those who dont know it), so I pay for that privilege. The places Australians enjoy travelling to will see a distinct drop in patronage as people stay away.

      • Interesting comment BTB. Re privacy I suspect we are too late. It isn’t valued particularly by younger people (just my experience – not making a rule).
        I rather like the way people line up for hundreds of metres fto save a few cents( = $1.60 on a tank). It demonstrates the over-reaction to some cost and benefit. I think you’re right – people will stay home and watch TV,play on computers etc.
        If that’s the aim of those who control us it’s likely to be successful.
        On the other hand the financial failure of tunnels et al across the land is testament to the fact that as long as road usage is free people (generally) will not pay to use the pay for use infrastructure unless they are forced to.

      • darklydrawlMEMBER

        “start monitoring your speed, and all your GPS locations”….

        That smart phone in your pocket already does this and that data is already being accessed by many companies. As does the GPS unit on your dashboard, plus the black box diagnostics under the dashboard that is used when you get your car serviced.

        Not saying it isn’t creepy, but understand it is already happening. (or ‘happened’ if you will).

        If any app you are using is ‘free’ than you (and your data) is usually the product. Worth considering the privacy vs convenience trade off.

    • Or the NZ road user charges model for diesels, allows charging different rates per km for different vehicles and would perfectly capture electric vehicles. No tracking, just works off odometer reading.

    • Non problems are often the pretence for what this is; privatisation of the entire Australian road network, suburb to highway. Then surge pricing, and time of use pricing. But your reverse mortgage will cover it.

    • +1. The Statists love this stuff. I accept roads have to be paid for why not just increase fuel taxes ? Because its not about that , its about control and handing more of the economy over to the rentier class. Once a nice road with solid consistent revenue is established like Nepean HWY in Melbourne they will sell it to City link for 100yr lease .

      As an aside why is there never any debate about reforming the political class. That is the root of all our problems. Never any mention of banning private political donations, Primary style pre selections of candidates, publishing of MPs appointment diaries.

      Politicians are the pits and People like the author above are simply angling for a paid gig when deals are being done.

      • KlimashkinaSydney

        In regards to your last question, who do you think has the knowledge, wherewithal, skill and connections to start a movement to reform the political class and the political system? That’s right … the politicians themselves and their various associates (lawyers, bankers, etc). Anyone who gets into the echelons has necessarily been successful in the current system, so they will see nothing wrong with it, nothing needing reform.

      • I agree Rod. Every litre of petrol has 50 cents of tax but not all of that money finds it’s way into road infrastructure. The pollies have been sucking off this revenue into unrelated use since it’s inception. I notice the Green’s leader is negotiating with government to increase excise again so it’s just more of the same.

    • (sorry! replied in wrong spot, meant for main topic, not your comment (-:)
      Great, so not only did I have to move even further out to find a home we could afford, now I’ll be paying even more to get to and from work. A great system for those who can afford to be close to work, not great for those who live on the fringes or beyond.

  2. So now we need to pay to use the roads our relatives paid to build because corporations donate to LNP and Labor to bring in 400k more Australians every year?

    What good comes from population growth for existing Australians? Nothing.

    Australians are the biggest mugs in the world. A democracy that votes for the destruction of our lifestyle and country.

    • rich – Correct! However when you are allocating blame don’t forget the ‘social consciense’ crowd who think we should be taking millions – anyone who wants to come.

      • @flawse.

        I rarely forget those clowns.

        Double Australia’s population with 3 months global growth. Try and explain that to your average not so bright nutbag socialist.

      • Along with selling most mining and 2.5 times the size of Victoria in prime farm land AND having the most private debt in the world. Take all these one-time-only wealth generators away and we’d be scratching in the dirt for food.

        That’s what 50 million people will be doing in a few decades. We couldn’t be dumber.

    • It will NOT pass the pub test simply for the fact that the existing public transport infrastructure and commuting times are so shitty. Even in Melbourne; that supposed “most liveable city in the world”.

  3. drsmithyMEMBER

    The problem with congestion charging is a huge proportion of people have relatively little control over when they need to be travelling, and those in the lowest income brackets usually have the least control.

    You can cover 90% of “user pays” with a) higher fuel excise, b) vehicle registration costs based on annual kilometres travelled (collect odo readings at rego renewal) and maybe c) additional charges for heavier vehicles (since they cause disproportionately more road wear and tear).

    Some suitable rebates/discounts for people living in rural areas and “must” drive large distances would also be required.

    These two things would be completely trivial to implement and administer.

    • Why not implement time-of-use payments. After all, most cars spend over half their lifetime parked in a garage. Charges/fees for registration, road use, insurance, pollution taxes etc would only be incurred once you leave your driveway. You would then be able to weigh the costs relative to convenience for each trip and then decide if the car is the better option over the bus, bike or foot.

      • drsmithyMEMBER

        As above, most people have relatively little control over when they travel (9-5 job, dropping kids at school, doing the shopping on the way home, etc).

        Generally, lower income earners have the least flexibility in their working arrangements.

  4. “A user-pays system might replace existing fees with charges based on motorists’ actual use of roads.”

    When does this ever happen?
    Did the GST replace stamp duty as promised?

  5. Why replace a very simple, fair and easy to collect tax (fuel excise) with a very complex and expensive to collect tax? The real winners here will be the vested interests that supply the technology or control the infrastructure.

  6. Singapore type $100k license is coming because we’ve got too many people 73% of us didn’t want.

    Go Australia. Fucking complacent idiots in this country.

  7. and they are going to do it by implanting a tracking chip into the neck of every Australian that ever wants to use any road?

  8. If I had to pay to use the roads I would want to live closer to my place of employment. Stamp duty on housing would deter this. Surely if this was to gain any traction, the encumberments on relocating would have to be lifted.

  9. I don’t mean to state the obvious… but new car petrol/diesel consumption is as low as 5L / per 100kms. Historically this was around 12/13L per 100kms for Falcon/Commodore/etc.

    The old excise model based on cents per litre is stuffed, as less and less litres are being purchased every year. Commercial transport fuel volumes are increasing, but passenger vehicle fuel volumes are decreasing.

    The answer is either a KM’s based system (like NZ’s RUCS charge for commercial vehicles), or GPS based systems. The advantage of GPS systems is that they can change different amounts for different times of day.

    A lot of new cars are coming with “Emergency Beacons” which are effectively tracking devices anyway, so people will just have to get over the whole tracking thing.

    • truthisfashionable

      “GPS based systems. The advantage of GPS systems is that they can change different amounts for different times of day.”
      If they are going to use GPS based systems lets aim higher and implement driverless cars. I was surprised to see that Patrick had managed to fully automate Port Botany, the skills and knowledge are here (or atleast were) so it would be possible.

  10. What we need to do is to get a ‘productive’ economy going. Then much fewer people would be heading towards the centre of cities and many many more would be heading outwards towards the outskirts or happily living in satellite and regional cities with plenty of employment and oppurtunity.
    Problem solved!

    • Maybe but work is not the only reason to live in a population centre. Most of my hobbies rely on having people nearby with similar interests which requires living in at least a small city.
      But yeah, it’d still be easier to be on the outskirts if the work was further out.

  11. Wow, this chestnut was being kicked around in DOI (Vic) circa 2004 and I don’t think I’ve ever seen a more repulsing policy. Not referring to the merits of it, but the minute it was raised in any forum that I saw, it was like a fart in an elevator. We simply don’t have the courage or vision in this country.