Why you de­serve bet­ter

Herald Sun - Motoring - - Welcome - Twit­ter: @JoshuaDowl­ing

MO­TORISTS are alarmed by the in­crease in fuel tax in this week’s Federal budget but they’re up­set at the wrong part of the deal.

The in­crease of an es­ti­mated 1 cent a litre a year (now that fuel tax will be pegged to in­fla­tion) is a prover­bial drop in the ocean. Less than a third of fuel tax gets fun­nelled into bet­ter roads. Even then, the new roads will come will a toll gantry.

Some salient facts: Aus­tralia is the fourth cheap­est coun­try in the de­vel­oped world for petrol (be­hind the US, Canada and Mex­ico) and the sixth cheap­est for diesel.

Our tax on fuel is among the low­est.

The fuel tax was pegged to in­fla­tion un­til 2001, when then PM John Howard froze it at 38.1 cents a litre to take some of the pain away from the in­tro­duc­tion of the GST.

The ex­tra tax set out in this week’s budget adds roughly 50c-75c to each re­fill for most cars, a frac­tion of what you pay at the servo for a bot­tle of wa­ter or a choco­late bar. Over a year, that works out at only $9.90 for the owner of a Toy­ota Corolla, an ex­tra $12.45 for Holden Com­modore driv­ers and $15.90 for Ford Ter­ri­tory cus­tomers, based on an an­nual aver­age of 15,000km.

So how lit­tle of the fuel tax goes back into roads? Of the $14.9 bil­lion raised last fi­nan­cial year, just $5.4 bil­lion was spent on roads and free­ways.

Of the fore­cast $15.2 bil­lion in fuel tax rev­enue next fi­nan­cial year, just $4.8 bil­lion will be spent on roads. In 201516, rev­enue is fore­cast to go up to $15.8 bil­lion, of which roads will get $7.3 bil­lion.

Sounds like a lot of money but it’s mar­ginal.

The WestCon­nex free­way ex­ten­sion in Syd­ney’s in­ner west will cost $13 bil­lion.

Once again the mo­torist not only un­der­pins the econ­omy but also pays twice. Most fuel tax goes into con­sol­i­dated rev­enue, even as we drive un­der yet an­other toll point.

It’s like pay­ing for a dozen eggs and open­ing the box to find four miss­ing. Mo­torists de­serve a bet­ter deal.

The govern­ment says it will spend $80 bil­lion in the com­ing years on roads but half of the fund­ing will come from “pri­vate oper­a­tors” — that is, toll com­pa­nies.

If we must go down this path, why is there not a sun­set clause on the toll? There are prece­dents. Once the toll op­er­a­tor re­coups the in­vest­ment and banks some profit, say af­ter 20 years, the roads should re­vert to pub­lic own­er­ship.

If only the federal govern­ment could be per­suaded that bet­ter roads not only save lives, they also im­prove pro­duc­tiv­ity and so gen­er­ate rev­enue in other ar­eas.

In­stead, it puts the bur­den on mo­torists — yet again.

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