Tuesday 9 August 2011

Australia - RACV supports replacing fuel tax with road pricing

The Royal Automobile Club of Victoria (RACV), Australia, has released a rather interesting statement. RACV's general manager of public policy, Brian Negus has been reported by The Age in Melbourne as saying a shift from fuel tax and annual registration charges to pay for roads, to road pricing is “inevitable”.

It should be on the basis that fuel excise is removed and a road pricing system comes in… A move to road pricing in this context is inevitable and certainly is the right the way to go in the point of view of getting the right tax structure for motoring

The report notes figures in Australia that reflect similar challenges to the US. Like the US, indexation of fuel tax does not exist, it was abolished in 2001 meaning fuel tax in real terms has dropped 25% in that time, combined with improved vehicle efficiency, fuel tax revenue as a proportion of GDP has halved in that period.

Combining analysis of petrol and diesel…

In 14 years, the combined excise on both fuels is projected to fall from 1.7 per cent of GDP to just 0.8 per cent, leaving the government to find $15 billion of revenue elsewhere.”

He specifically saw it as a move towards distance based charging because it would help get the "right tax structure for motoring".  Of course, what this shows is that this motoring organisation is probably ahead of many of its members, but it is heartening to see some intelligence in the lobbying in Australia on road charging.

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