Why you deserve better
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.