Rego per kilometre idea hits poor hardest

This proposal from an infrastructure lobby group is sure to be controversial:

The executive director of Infrastructure Partnerships Australia (IPA), Brendan Lyon, says all existing road taxes – including registration, licensing fees and the fuel excise – could be abolished and replaced with a per-kilometre charge for motorists.

“[That would mean] moving to a three-tier pricing system, moving to a more efficient way of collecting tax charges across our transport network, bringing a fairer, more equitable system,” he said.

According to IPA’s calculations, the average motorist would pay about 8 cents for every kilometre they drove.

Problem with that idea is that richer people tend to live in inner suburbs and have much better public transport options, so they don’t need to drive to commute and when they do it’s for a comparatively smaller distance. In contrast, poorer people, living in outer suburbs, generally have to commute further and have far fewer, and much worse, public transport options. So it doesn’t sound particularly fair or equitable. And what about country people, who have nothing to do with road congestion but travel more kilometres per year than almost anyone?

It’s the same problem that fare zoning in public transport raises – charging people more for being unable to afford to live close to city centres, where the work is, simply reinforces economic disadvantage. It’s also unfair because although the trips taken by those in the better-serviced inner suburbs are shorter, they’re better covered and can take more of them – for which they pay much less.

In summary, no – the better solution is to improve public transport infrastructure, particularly to developing outer suburbs, so that most people don’t need a car. In Melbourne, at least, the network is already stretched to overflowing. Most people only commute by car if they have no real choice.

I suspect IPA’s motives in this are about as pure as those of the other IPA. I also suspect this will be the last time the tax per km idea becomes the top story on ABC News online.

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15 responses to “Rego per kilometre idea hits poor hardest

  1. Actually Jeremy, this is a common fallacy. It’s actually the wealthier sections of society that do the most car travel and have the highest petrol bills, as revealed by ABS statistics on fuel excise collections by income level.

    Basically, the richest 20% of households are responsible for around 30% of expenditure on petrol, while the poorest 20% are responsible for about 10% of expenditure.

    Which means that tying registration and other standing costs such as CTP insurance to amount of car use would actually be a progressive measure. At any rate, more progressive than the current system that places an equal burden on all car owners regardless of how much they use the vehicle.

  2. More importantly it would be impossible to administer. just how are to going to verify the mileage of each individuals car? What is to stop individuals immobilizing the odometer in their car?
    I agree with you that this is a ridiculous idea, even just from a technical point of view

  3. good post, the question I asked myself straight away: why is an infrastructure lobbyist concerned about the efficiency of tax collection?

  4. Wisdom Like Silence

    ban all cars in the cbd and greater metro area.

    next problem plz

  5. Iain those GPS map thingees that most people have in their cars these days can provide accurate travel records I think.

    Just make everyone carry one (like an e tag I spose) and make them compulsory to be on. Then we’d have a nice record of exactly how much travel everyone does.

    BTW what about rural roads…. you can tell these IPA people live in cities.

    4 bucks every time I drive to a small city. 2 bucks to travel to the nearest towns, and what about all the off road driving I do, on private property as well … am I sposed to pay for that as well?

    Stupid idea.

  6. Another common fallacy is the idea that if you simply provide better public transport in the suburbs people will use it instead of their cars.

    Notwithstanding having multiple rail and tram lines, having high dwelling densities and being on the doorstep of the CBD, 79% of all motorised trips by residents of the City of Yarra are made by car.

    What hope then for the outer suburbs which could never realistically hope to be as blessed in public transport as suburbs like Carlton, Richmond and Fitzroy?

  7. “And what about country people, who have nothing to do with road congestion but travel more kilometres per year than almost anyone?”

    Speaking from experience, country people are used to being raped in such ignorant ways by the huddled majority.
    Too bad if your job is more than 10 minutes (@ 100kmh) drive away.

    It reminds me of the unabated joy of paying a “Save The River Murray” Levy; for water which isn’t within 4ookm of me & just so happens to quench the tenderfeet in Adelaide.

  8. I’m not a fan of road pricing or any other measure that requires tracking people’s movements in order to calculate user charges. Same with Myki, that’s going to record where everyone touches on and off.

    You can always charge registration and insurance premiums on a usage basis if you build it into the cost of petrol. Then there’s no intrusion on people’s private lives beyond the amount of petrol they buy, which is generally known anyway. And people would also have more of an incentive to use more fuel-efficient vehicles.

    @Alan: yes, there’s no suburb in Melbourne where public transport use approaches close to the 50 per cent seen in Europe or Asia. The reason is clear to anyone who’s attempted an east-west journey by public transport in Fitzroy or Brunswick. You can’t simply count up the number of public transport services as a measure of service quality: it’s more important that the services actually form a network. See Paul Mees’ new book “Transport for Suburbia” for the definitive story.

  9. @TonyM: As you say, forming a network is the key thing. That’s why I used the City of Yarra as my example because it’s next door to the biggest transport interchange in Melbourne i.e. the CBD.

    BTW I’m keen to read Paul’s new book but Border’s tell me it’s $127!!!!!!

  10. Alan, you’re probably best getting it by mail order from the UK, where they’re enlightened and don’t charge VAT on books. Some online retailers even offer free delivery to Australia.

    The City of Yarra being ‘next door’ to the CBD isn’t hugely relevant, because as you say, most routine travel isn’t into the CBD. And it still takes a good 15 minutes to cover the 3km from Fitzroy to the CBD by tram, because we don’t have any serious initiative to get trams through intersections quickly. Fitzroy to Richmond by public transport is a lost cause; Fitzroy to Brunswick likewise. It would be a simple matter to improve the network for trips like this (mainly by getting a few extra buses and running them at higher frequency) – the real problem is no-one’s in charge.

  11. another great idea from a purely benign source

    In no way would this be the first step to privatising road charges, like gas and electricity.

    “our corporate masters *ahem* donors are only concerned with improving the efficiency of our tax system… “

  12. TonyM, I think it’s worth noting that there are three N/S tram routes through Fitzroy (the 86, 96 and 112 IIRC), that are within an easy walk of each other. They converge in Gertrude St on the edge of the CBD. There is also a rail line which gives access to the Epping and Hurstbridge lines.

    Just 200 metres south of Gertrude St, Victoria Pde on the edge of the CBD provides E/W tram access to Richmond and beyond. There are parallel E/W tram routes on Swan and Bridge which also give access to the suburbs east of the Yarra – that’s three routes at 900 metre intervals.

    The N/S tram on Church St connects these three EW routes in Richmond and itself gives access to points further south. All these tram routes also cross rail lines.

    On top of all that, Fitzroy and Richmond are on the doorstep of the CBD if you want, for example, to travel West. Not perfect, but not bloody bad either.

  13. Pingback: Does My School have lessons for planners? « The Melbourne Urbanist

  14. I used to live in Richmond …

    If you are prepared to walk as little as half a km you can get to Fitzroy in about 20 minutes from Richmond. (Mind you I walk pretty fast.) Thats as long as it takes to drive during the day, (weekdays) and if you have a bike you can do it in less than half that time. (If you like riding fast).

    Inner melbourne has no issues with public transport. You try getting from North Essendon or Keilor to Brunswick on public transport. Its about the same distance, and it’ll take you hours.

    Sometimes it used to be quicker to walk from Moonee Ponds to Brunswick – you could walk from the transit centre at Moonee Ponds to the corner of Glenlyon rd and Lygon st before a bus came.

    And these days the city has sprawled even further. Some how I doubt its got any better.

  15. Like Alan and Jules, I have personal experience of trying to travel around the City of Yarra without a car or a bicycle. Trust me, it is not something that most people would do by choice.

    The northern end of Richmond and the southern end of Fitzroy are connected by the Victoria Parade tram. That aside, any journey requires the use of multiple public transport services that are too slow, don’t connect properly with each other and revert to 20 minute frequencies or worse in the evenings. (I know, it’s not as though there’s anything much in the way of after-dark activity in these suburbs, right?)

    Funnily enough, North Essendon to Brunswick by public transport is something that’s just got a lot easier thanks to the 900 Smartbus. But its problem is that it makes so many complicated little detours that it fails to offer a competitive travel time. Since no-one’s in charge, no-one can decide whether it’s more important to try and serve every possible destination within cooee of the route, or to attract actual passengers.

    So, my original point. It doesn’t matter what suburb you’re in or how far from the CBD: if public transport isn’t organised to compete with the car, people won’t use it just because it’s the cool urban thing to do. It’s not just the outer suburbs that need a network planning overhaul, and it’s not just outer-suburban battlers who are clocking up the kms in their cars.

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