Distance based road pricing is the future

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The Federal Chamber of Automotive Industries (FCAI) is pressuring the federal government to replace Australia’s convoluted vehicle registration, stamp duty, licence fees and fuel excise system with a single road-user charge that taxes drivers for every kilometre they drive:

“An efficient road-user charging scheme can address all vehicle users regardless of the type of vehicle they drive, how often it is driven and the purpose of the travel,” [FCAI chief Tony Weber] said. “For example, it could be based on vehicle mass, distance travelled, time of travel or a combination of factors.”

The chamber’s discussion paper, to be released on Wednesday, lists several potential scenarios including the capacity to build in congestion and peak-hour charges on motorists to help clear grid-locked freeways in Melbourne and Sydney…

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.