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Is a ‘user-pays system’ the right approach for our roads?

Infrastructure Australia, an independent statutory body, recently suggested that the government should move away from charging vehicle registration fees and fuel excise in favour of a ‘’user-pays road system”. But is the solution practical?

The proposal would directly charge motorists depending on the distance they drive on our roads, while being touted as an option to fund major projects, lower congestion and contribute to the economy. According to the authority, the scheme could be applied to all regular motorists within 10 years, and within the next 5 years for heavy vehicles.

At the moment, Infrastructure Australia contends that motorists are not familiar with the current approach of paying for road use, whereby drivers often view roads as “free” due to a lack of clarity in the fuel excise they pay. This fuel excise, charged per litre at the pump, effectively acts as a road levy by charging motorists depending on the distance they travel and according to how heavy or inefficient their vehicle is.

The system has also been singled out for being “unfair, unsustainable and inefficient” – largely because of an expectation that less excise will be raised as cars become more economical, and given the inequality between metropolitan and rural regions where the latter are not afforded the same quality of roads yet still pay the same costs.

While such a proposal could potentially encourage people to become less reliant on their cars and also raise funds to reduce congestion, is the proposal any better than the existing approach? Currently, the ‘average’ motorist could expect to pay the following fees that contribute towards the road network:

Registration

Fuel Excise

Licence Fees

Stamp Duty

Total Cost (p.a)

$263

$592

$21

$136

$1012

Noting the above costs, what is immediately apparent is that one of the larger components of vehicle-related expenses, the green slip or compulsory third-party insurance, is outside the scope of the review. With this and external insurance premiums rising, a notable component of the vehicle related costs are going to remain at least what they are now.

However, the elephant in the room concerns how the system would be implemented. Is every single road going to be set up with tolls? Would roads have differing rates depending on the volume of traffic they cater for? Would vehicles be fitted with a tracking device to monitor their every movement? What impact would privacy laws have on tracking vehicles? With current toll gates prone to the occasional error, what’s to say the same issues wouldn’t be encountered? And how would drivers be able to validate every kilometre they have travelled? These are all issues that would cost motorists additional time and money, either directly or indirectly.

highway-tunnel-2-1617131-1279x852

In terms of fairness, such changes would still discriminate against those: from rural locations; with a lower income; or disconnected from public transport. Consider those in remote parts of the country – every time they make a trip to their nearest town centre, or commute to a major city, they will be paying a considerable increase – and the quality of roads provided to them, or the portion of funding towards their roads, is still going to be inferior. Those who are isolated from public transport are inherently disadvantaged by not having an alternative to using their cars. How would the system compensate accordingly?

Although there may be benefits for those living in the major cities and suburbs supported by public transport, in designing a solution that is meant to be more ‘equitable’, this doesn’t offer progression. The current system is far from perfect, however, to recommend a new one that doesn’t address the current one’s shortcomings is questionable practice at best.

9 comments

  1. Robert Reid says:

    This is a good idea as it would greatly simplify the motoring system. Just think:

    1. All roads are presently categorised and so a fee based on this system should be valid.

    2. Ones address as rural or city based with business categories added or if retired or not is another means of setting a scale of affordability;

    3. very soon all cars will have GPS and most people have mobiles with GPS so it would be very simple to determine if a car is in motion, where it is and who may be driving;

    Apt present we deal with unregistered and unlicensed drivers removing the individual fees and making a user pays system would greatly enhance the present system.

    Another benefit l=of linking the car to the owner mobile would be related to stolen vehicles. This may be a little more complicated but with GPS in a car and NBN highway control the vehicle could be traced using its GPS and a unique pin which could be the VIN number or reg number. Food for thought. Regards. Bob

    March 29th, 2016 at 1:09 pm

  2. Darren says:

    Go to hell….the user already pays…..and pays, and pays and pays. If people choose to drive longer distances under the current regime, they are already paying more fuel tax, from which a piddling percentage finds it’s way back into roads anyway. There is no way governments can be trusted to not rip people off; you can’t tell me that we won’t be charged for every single kilometre we drive under this dreamt up scheme, as well as be charged registration and any other charge they can think of.

    March 29th, 2016 at 1:35 pm

  3. Rafik Kocharians says:

    It is the governments responsibility to provide transport and infrastructure to the community who voted them in. For years they have been taking the fuel excise and taxes and using this money on their own parties personal pet projects. Yet they have provided no extra roads or transport facilities.
    They spent $100s of millions of dollars to widen Epping road. Then they turned around and reduced it down to just one lane so people would be forced into the lane cove tunnel and pay a private company tolls. The government in this case has clearly done an injustice on the people. This is why Sydney transport is doomed. Whilst the rest of the world is expanding its roads in 2016 Sydney motorists have to put up with village mentality of a one lane Epping road.
    We have paid enough. We have paid off the Harbour Bridge and it should be free as the motorists have fully paid for it. Yet government corruption sees us paying tolls.

    March 29th, 2016 at 1:55 pm

  4. Robert says:

    The ‘user pay’ proposed system, removes from the society our responsibility to ‘support’ one another. Those who don’t live in the city, close to public transport will again be force further down the poverty line as those who can afford to live in areas where public transport is abundant will further receive the benefits. It is not unheard of to travel distances to do basic shopping. If we desire a fair and equitable society we should keep the system the way it is. The proposed ‘User pays system’ although seems fair will further isolate those living outside the CBD, not to mention this coastal and rural towns where public transport can be non existent. Our recent history had the push for decentralization to help inland and coastal communities to grow – this user pay system will only benefit those who live close to any form of public transport and place a greater strain on the pockets of those who live away from public transport. Villages that depend on weekend trade and weekend getaways which enhance tourism will also be under threat as motorist will be thinking twice about getting away for the weekend.
    Not matter how you look at user pay system – it can never be justified as being good of society; sadly it can only further hurt and isolate those who have not choice but to travel. The concept of a mutual society will further slip away.

    March 29th, 2016 at 1:56 pm

  5. Ken says:

    I feel that your figures may be somewhat under the real amount that motorists pay.
    For instance, I spent an average of $60 weekly on fuel before I ceased work 2 years ago. That’s roughly $1200 P.A. in excise (tax) and further to that, my registration in Sydney is about $500, not $263, for an average size car. Then there is the G.S.T. on the running expenses such as servicing, tyres, etc as well. With weekly current toll charges on top of that.

    So consequently. I believe that the user pays enough already.

    March 29th, 2016 at 2:00 pm

  6. Bill says:

    Well said! The proposed user pays system is a ‘utopian’ vision created by self serving bureaucrats which would be difficult and costly to implement. Guess who would pay for these huge implementation costs? The motorist of course. Those living in big cities already pay tolls. These can amount to a lot of money for regular users. Would these tolls disappear if the new user pays system was introduced? I doubt it. So we would face tolls plus the new user charges. BTW current revenue from excise on fuel is unlikely to diminish, although cars are becoming more efficient and some vehicles (plug in electrics) do not use fuel and are effectively paying no excise tax, the number of cars on the road continues to rise and this will provide a floor to the excise tax collections. In any case it would appear good policy for plug in cars to receive some benefit (no excise paid) as they are helping reduce carbon emissions. No, the new user pays proposal should not be accorded further consideration. Is is a potential nightmare for motorists, whichever way you want to look at it. But if the politicians or bureaucrats believe they could raise more money this way (IMHO it would) just watch them spruik it.

    March 29th, 2016 at 2:55 pm

  7. Garrey Sellars says:

    The fuel excise would be sufficent IF it all made it to improve road quality one pollitian explained to me that only 2% of fuel excise raised actually reached the road surface .IT is used as a milking cow for govt spending they nee to spend as if it was their money not someone elses

    March 29th, 2016 at 4:45 pm

  8. Robert Clark says:

    I agree with your comments, whilst the current system is far from perfect, (and living in a rural area we have a very poor public transport system), the proposed user pays system would be worse.
    It seems to me that Infrastructure Australia believes Australian motorists are stupid,and will accept any nonesense that is shovelled out to them.

    March 29th, 2016 at 5:32 pm

  9. Keith Fryer says:

    Every year each vehicle must be presented at Registration Office for registration payment and check mileage. Each office is given an “infrastructure factor” relating to how much public transport and distance between towns so city and country people have equitable circumstances.

    March 30th, 2016 at 10:56 am