CONGESTION impacts all drivers so why are some motorists paying more than others when it comes to funding new roads?
Experts highlighted the “unfair” system that is currently used to
help fund new roads in Australia at the National Infrastructure Summit
in Sydney this week.
The current system benefits those who drive
fuel efficient cars, and improved technology is reducing the money that
governments collect from fuel excise and can use to build essential
infrastructure. The introduction of driverless cars could see the
government’s funding base slashed even further.
Motorists are now being asked to consider contributing more towards the cost of the roads that they use.
Countries
such as Singapore and the United States are already trialling new
technology including satellite tracking, to raise more money.
It’s an idea that federal Assistant Infrastructure Minister Jamie
Briggs thinks that Australia should be considering, to help get new road
projects off the ground and improve gridlock.
“In Singapore,
there are plans to implement a pricing system based on satellite
position tracking by 2020,” Mr Briggs said at the summit hosted by the
Australian Financial Review.
“This will mean that road users will be charged based on distance, location, time and type of vehicle.”
In the US, Oregon is testing a pilot scheme to replace fuel tax with a mileage based tax to help fund its main roads.
Mr
Briggs said he understood that some might be wary about new types of
road pricing but these types of ideas needed to be on the table if
Australia was serious about funding the infrastructure that was needed
in the future. Congestion could cost Australia $53 billion a year in
lost productivity by 2031.
“In today’s world we generally accept that you pay for the service you receive. Road pricing remains the exception,” he said.
AN ‘UNFAIR’ SYSTEM
Currently
motorists contribute to road costs mainly through registration fees,
tolls and fuel excise. But this contribution goes no where near covering
the cost of building and maintaining the roads, which are mostly funded
by state governments with help from the federal government.
The problem of funding is made worse by declining car use and the rise in popularity of fuel efficient vehicles.
Scott
Charlton, chief executive officer of toll company Transurban said
Australia once relied on fuel excise to fund transport infrastructure
but this source was drying up.
“Every time you replace a 20 year
old sedan with a late model car we lose approximately $350 fuel excise
per annum,” Mr Charlton said at the infrastructure summit.
He
believes the way that Australia funds transport is past its use-by-date,
is not fair because those who cannot afford to buy the latest model
car, as well as rural drivers who drive long distances, are paying the
most.
“No one understands how unfair the current system is,” Mr Charlton said.
“The
driver of a late model fuel efficient car is paying far less in fuel
excise than the driver of a less efficient car ... despite them having
the exact same impact on congestion and on infrastructure,” Mr Charlton
said.
But Deputy Prime Minister and Infrastructure Minister Warren
Truss said he didn’t think tracking Australians using satellites would
“pass the pub test” and the public weren’t ready for congestion and time
of use charges for roads.
“I think people still like to be able to visit their girlfriends without the whole world knowing,” Mr Truss joked.
NSW Premier Mike Baird acknowledged that doing unpopular things such
as introducing tolls on Sydney’s WestConnex motorway project would
likely to spark a public backlash, but said governments had to be
prepared to explain the benefits.
“I think the community and public is up for these honest discussions,” he said.
He
said his government had inherited a road pricing system in Sydney that
was “all over the place” and which featured different priced tolls in
different areas. His government is now looking at ways of making the
tolls more efficient, which does not necessarily mean introducing new
charges.
Mr Baird also acknowledged the issues with cost recovery
saying the state’s train system only got back 20 to 25 per cent of its
operating costs.
NEW FEES TO BE TRIALLED
The
Productivity Commission and the Harper Review have both recommended
“cost reflective” road pricing be introduced in Australia.
Transurban
will soon launch a pilot study in Melbourne to test three types of user
pricing and how they impact on motorists’ behaviour. These include
distance per km charge, a one-off charge based on anticipated kilometres
and a price per trip/access charge. It will also test time of day
charges, and a one-off fee for entering the CBD.
The data will be
shared with the federal Department of Infrastructure. Mr Charlton said
he believed that people would support user pay charging if they could
see the benefits, including the time savings on their commute time.
“This is all about making a decision about the quality of life we all want as Australians,” he said.
“We
simply cannot keep building our way out of congestion, and we have to
change the attitudes that existing infrastructure is free once it’s
built.”
Meanwhile the development of new technology such as
driverless and electric cars could also have a huge impact on
Australia’s reliance on fuel excise to fund infrastructure projects.
Mr
Charlton said the automotive industry was just five to 10 years away
from driverless cars entering the market, with mass adoption expected by
2030.
The mining sector is already testing out autonomous trucks,
according to infrastructure development company Transfield chief
executive officer Graeme Hunt.
“If the technology becomes
mainstream ... the driverless car could conceivably drop off dad and mum
at different workplaces, and the kids, one by one, at different
schools,” Mr Hunt said.
“The need for a second car in the typical
family diminishes and with the reduction of vehicles in households you
might find that some of the road investments, which we’re making today,
may be redundant tomorrow.”
A WARNING
Another complicating factor is the phenomenon of “peak car”.
Grattan
Institute chief executive John Daley said falling car use was one of
the most important trends when considering infrastructure investment.
He
said Australia was following a global trend in developed countries of
stagnant car use. The most recent Bureau of Transport Infrastructure and
Regional Economics data suggested passenger kilometres travelled in
Australia was falling or stable.
“We should be very careful about
the assumption that road usage is going to keep rising in the future at
the same rate as it has in the past,” Mr Daley said.
DOING NOTHING IS NOT AN OPTION
But
speakers at the infrastructure summit have warned of the damaging costs
to Australia’s productivity if nothing is done to address congestion
and infrastructure that is not keeping pace with population growth.
“If nothing changes, by 2035 Sydneysiders will face congestion levels on par with Mexico
City and will waste 110 hours a year in traffic,” Transurban CEO Scott Charlton said.
Mr
Charlton said that congestion in Sydney and Melbourne already ranked
alongside London, Los Angeles and New York, despite these cities being
three times their size.
Congestion is estimated to cost Australia $13.7 billion a year, and this expected to rise to $53 billion a year by 2031.
Assistant Infrastructure Minister Briggs said Australia needed to embrace more innovative ways to fund infrastructure.
“We
desperately need to improve our infrastructure so we can deliver goods
across the country and to the rest of the world more efficiently –
otherwise congestion will continue to act as a handbrake on our
economy,” he said.
Neville expected to replace Ian Cathro, who has joined Newcastle
