Monthly Archives: April 2010

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.