Road Users Must Pay Sooner Or Later

Australia has adopted the idea that motorists should pay for their road beyond tolls and fuel excise fees. The idea of a user-pays system could replace the existing fees with charges that are based on motorists actual road use. The use of new technologies could allow for different charges during peak periods, similar to how we pay for electricity or telecommunications.

It’s now, according to the Henry Tax Review, Harper Competition Review and the Productivity Commission’s Public Infrastructure Inquiry. However, politicians are not sure that it will pass the pub-test with voters.

To reduce congestion and increase productivity in the future, a user-pays system will be necessary. It is important that we have a discussion about how and not if we implement a road user pay system. There is a good chance that political debates will end up dragging the user-pays concept down a rabbit hole long before it begins.

Can It Pass The Road Pub Test?

A user-pays system for roads is not something that any politician wants to do. While the jury isn’t yet out on whether motorists support user-pays, current fuel excise impacts those who can least afford it.

A user-pays system that is well design would be more fair. Road users would be able to see exactly what they are getting for their money. A debate about transport reform is not possible. The debate on user-pays should cover:

  • Road-related revenue for construction and maintenance: Hypothecation (earmarking)
  • Our existing transport infrastructure can be made efficient or sweat
  • There are many ways to enable intermodal freight movement
  • Public-private partnerships are use to maximize capital availability and increase infrastructure spending
  • Effective approaches to competitive tendering in infrastructure projects
  • Changes to existing fuel excise
  • There are effective ways to reduce the impact of user-pays for those who cannot afford it.
  • Infrastructure improvements can provide new opportunities to capture the added value of nearby properties
  • Better ways to finance public transport

It will be a heated debate. Business-as-usual only leads to increased congestion in cities, lower productivity, and ultimately a decrease in our standard of life. Without a user-pays system, it will be difficult to implement necessary reforms.

Pricing And Charging Are Two Different Things

Pricing and charging are two important topics that must be address separately. First, it is necessary to recognize the price, which is the amount that consumers will pay to use roads, relative to the costs involved in funding, construction, and maintenance. A second requirement is to allow users to pay for actual use of roads, where the price is reflected in the charge.

The main issue in the political debate will be about charging. However, pricing will be the most important reform. Although voters already pay for roads, they don’t know how much or what the contribution will be to actual road use.

We can only guess how to prioritize road construction and maintenance without accurate pricing. Without such market information, building more roads won’t address the root causes qq online.

A per-kilometre charge is popular, but accurate pricing would result in different charges depending on the demand. It may be necessary to combine congestion and per-kilometre charging. Charges should be adjust to reflect the amount motorists are willing to pay in different situations. As the cost of commuters becomes more transparent, a broad user-pays system may encourage flexible work practices.

There are still many issues. One is that the Australian Motoring Enthusiasts Party opposes any user-charges on existing roads. However, road pricing might make it more fair for motorists living in rural areas.

We Don’t Have The Money Road

Road pricing could prove to be as challenging, if not harder than the GST. It took over 30 years for this to happen. We can’t afford to wait so long.

The Coalition’s Fightback! is 650 pages long! Fightback! was the longest political suicide note in human history. Fightback! was implement more than 20 years later. Fightback! has been successfully implement.

The GST debate was, however, simpler than the road user-pays discussion. John Howard was able to get the support of the States in introducing the GST. Road pricing will require the States to get back on board, but only in an area that is within their constitutional rights.

Tony Abbott, Prime Minister of Australia, has not had a good relationship with Victoria and Queensland. Transport reform is a key issue at all levels of government. It is easy to see why politicians are concerned about a backlash from voters over transport reform.

Reform Will Be Hamper By Media Stoicism

Even worse, transport reform will be harder to explain in media-grabbing quips than the GST’s impact on birthday cakes. History suggests that transport reform could be put on hold for many years by another birthday cake incident.

Our politicians cannot take all the responsibility. It is vital to have a thoughtful debate and large-scale support from the community for reform. If this is not done, the implementation of GST will look like a cakewalk. In the meantime, regardless of whether user-pays occurs now or in future, the longer that we wait, we will pay more.

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