"Congestion taxes" with satellite transponders; Treasury secretary suggests

[mr anderson]

Plans for a raft of new tax slugs

By Glenn Milne
December 20, 2009

http://www.news.com.au/business/plans-for-a-raft-of-new-tax-slugs/story-e6frfm1i-1225812093180

> Proposed national land tax
> New resource tax plan
> Road congestion taxes

THE Federal Government's biggest tax inquiry in more than two decades is set to propose a national land tax, a new resource tax and a road congestion tax for the nation's clogged cities.

The Henry Review, by treasury head Ken Henry, is also expected to canvass a federal clawback of GST revenues to fund the Rudd Government's proposed takeover of the public hospital system.

Dr Henry's report, which is due to go to the Government at the end of this month, is also believed to favour a national payroll tax to replace state-based payroll taxes.

The national land tax would also replace existing state-based stamp duties payable on the sale of properties. But while Dr Henry is believed to support the tax, Treasurer Wayne Swan could still rule it out as too politically dangerous.

Opposition Leader Tony Abbott has already attacked the Government's emissions trading scheme as a "giant tax".

A national land tax would open up the Government to claims it is taxing the family home. And because it would be based on the value of the property, it could also be painted as a wealth tax. The WA Government has advised Dr Henry that the national land tax should be collected by local government so that homeowners receive one combined rates and land tax bill.

While a congestion tax for cities is likely to be recommended by Dr Henry, it will be conditional on appropriate technology becoming available and would not be implemented immediately.

The tax targets vehicles driven in overcrowded city centres.

The national land tax and a national payroll tax were raised by Dr Henry in a briefing to state treasurers as part of a regular meeting with federal Treasurer Wayne Swan on October 23. But sources at the meeting said Dr Henry's key focus was on the development of a resources rent tax applying to mining companies, to replace existing state-based royalty taxes.

Dr Henry said resource companies had been undertaxed by between $20 billion and $25 billion at the height of the last economic boom. He wants the extra revenue to fund a cut to the company tax rate currently set at a flat 30 per cent and regarded as high by world standards.

[mr anderson]

Henry review set to support road congestion tax

ADELE FERGUSON
November 30, 2009

http://www.theage.com.au/business/henry-review-set-to-support-road-congestion-tax-20091129-jyxj.html

A MONTH before the Henry review releases its report into Australia's taxation system, speculation is rife it will recommend a national road congestion tax to address the country's burgeoning congestion bill.

But in a 75-page report, obtained by BusinessDay, Infrastructure Partnerships Australia says a congestion tax is complex and could take years to implement.

The IPA calls for state governments to take immediate action to battle congestion, using a variable tolling model to manage demand across existing tollways.

Motorists would be charged a floating toll, pegged to the number of vehicles using the network. During off-peak, toll prices would fall, and during peak periods, charges would rise.

''Roads will always be a fundamental backbone of urban transport networks. Roads are critical to the movement of freight and passengers and underpin economic growth and social connectedness,'' the report says.

Executive director of IPA Brendan Lyon said discussion around a national road pricing scheme in the Henry review was attractive, but such a large scheme would likely take many years to implement.

Congestion tax is a hot political issue. The Henry review reports to the Federal Government before Christmas, and it is expected to include congestion charging, including a national road-pricing scheme.

A national road-pricing scheme would charge motorists per kilometre travelled, removing existing taxes such as licensing fees and registration, which could take years to implement.

Mr Lyon said more immediate action was required. ''Major cities such as Melbourne already have established electronic tolling systems and it's time that consideration is given to how flexible tolling, such as time of day and dynamic tolling, can play its part in decongesting cities,'' he said.

''Melbourne's population is booming and the city will house more than 7 million people by 2050. That means that the city will need continued investment in major new road and rail projects like the east-west tunnel, Peninsula Link and the ring road completion - but also how existing roads can be better used.''

Mr Lyon said Victoria was Australia's leading innovator in funding and delivering infrastructure. CityLink was the first fully electronic toll road in Australia and EastLink's tolling regime incorporates discounts for weekends when demand is low.

''Victoria has the opportunity and the skill to lead Australia in beating urban congestion too,'' he said.

''A variable toll across Melbourne's tollways could also provide new sources of revenue to get on with the job of funding the next generation of Melbourne's transport infrastructure.''

The IPA report comes days before the NSW Government announces its transport blueprint, which has promised to address congestion, and is costing the country $9 billion a year and is expected to more than double in the next decade.

The IPA recommends the radical overhaul of the Sydney road system, including the introduction of a new network-wide toll allowing all Sydney's motorways to be operated as an entire network rather than a series of roads.

[Cryptvill]

this is exactly what we need to stop the ills of the world this is great to here, more taxes

[tracer7]

Mr Lyon said more immediate action was required. ''Major cities such as Melbourne already have established electronic tolling systems and it's time that consideration is given to how flexible tolling, such as time of day and dynamic tolling, can play its part in decongesting cities,'' he said.

bingo, they know that by taxing it will take people off the road. just like taxing for climate change will make people go hungry, cost jobs. they know what they are doing. do not think for a minute that the outcome of everything they do is not planned. "we are sorry we taxed you to death, we didn't know that would happen"   

[AnarchyOK]

Henry tax review tipped to include plan for drivers to pay by kilometre

Julian Drape
April 30, 2010

http://www.heraldsun.com.au/money/money-matters/henry-tax-review-tipped-to-include-plan-for-drivers-to-pay-by-kilometre/story-fn312ws8-1225860719998

"Australian motorists could one day pay for every kilometre - and face higher fees for driving in cities and at peak times.

Each car on the road would be tracked by satellite under the proposal, outlined by Infrastructure Partnerships Australia (IPA) on Friday. The plan is similar to one floated by Treasury secretary Ken Henry.

It's expected to feature in Dr Henry's taxation review, to be released on Sunday. IPA executive director Brendan Lyon insists a road pricing scheme isn't a pipe dream.

"We're hopeful that it will be discussed at some length in Dr Henry's report and that governments don't close the door to discussing these kind of reform options," he told AAP.

"This isn't some weird option that no one's considered before."

Under the scheme, existing road use taxes and charges would be abolished, including registration, licensing and fuel excise.

"You replace that with a per kilometre charge which is more equitable," Mr Lyon said.

"People are paying based on the level to which they access the road network."

The average charge under the proposed scheme would be eight cents per kilometre. Driving in the country would cost less, while motoring in cities would be more expensive. Using a vehicle in urban areas during peak hours would be more costly again.

"This would encourage people not to drive during the morning and afternoon peaks," he said.

The IPA's discussion paper states an eight cent per kilometre average charge would raise an additional $4 billion annually. That would then be invested in public transport and road projects. The infrastructure body argues under current arrangements, trips in Sydney or Melbourne cost between six and eleven cents per kilometre, depending on car type.

In December, Dr Henry said traffic congestion cost the economy $9 billion each year.

"In the face of those costs, why have we stuck to the traditional fuel tax and rego model for cars for pricing access to roads, when sensible pricing seems to offer such large benefits?" he asked.

Under the current system there's no incentive for drivers to "bargain" with one another for priority access, the Treasury secretary said.

On Friday, Mr Lyon said a national road pricing scheme wouldn't rely on toll points above the road.

"Instead you're looking at a system that might be based on GPS, the 3G telephone network or something else.

"We're talking about a vehicle-based system that's able to measure the distance it's travelled, the time of day that the journey is undertaken and the location of the vehicle."

Privacy concerns "would need to be resolved", he admitted.

Norway and Oregon in the United States have committed to introducing road pricing schemes within the next decade.

But Mr Lyon said it was a medium to long-term project in Australia. Even if governments committed to introducing a national scheme, "implementation would likely take between five and 10 years due to technology challenges".

[mr anderson]

RACQ may back pay-as-you-drive trade-off

TONY MOORE
May 1, 2010

http://www.brisbanetimes.com.au/queensland/racq-may-back-payasyoudrive-tradeoff-20100430-tz17.html

The RACQ will cautiously back a "per kilometre" road pricing scheme if it is recommended by the federal government tomorrow, but only if motorists receive tax relief in other areas. When Treasurer Wayne Swan tomorrow releases the Rudd Government's long-awaited response to the Henry Review, most people will be looking to see how it effects their income tax, superannuation, business operations, petrol prices and car registration.

Steps to combat road congestion - either through a price-per-kilometre road pricing scheme - with or without a congestion tax - are widely tipped to be part of the tax review mix. RACQ spokesman Jim Kershaw said the organisation did not object to a shift towards a national road pricing scheme where motorists contributed depending upon total kilometres driven.

But Mr Kershaw said motorists were "pretty heavily taxed now" and support for the proposal would come only if other conditions were met.

"We are open to the suggestion of a road pricing scheme, provided that motorists get some relief from taxation in other areas," he said.

"And fuel excise is one area we are thinking."

Infrastructure Partnerships Australia showed the Federal Government raised $15.5 billion from road related revenue, and state governments $6.12 billion in 2005-06. State governments raise money from road through registration, stamp duty and licence fees, while the federal government derives revenue from fuel excise, the GST and fringe benefits tax.

IPA argues the current mix of fees and charges is inequitable, varies between states and does nothing to encourage drivers to fight congestion. The Queensland government has received $920.4 million in vehicle registrations in the past 10 months, with its registration fees the highest of the Australia states, ranging between 17 per cent for four cylinder vehicles and 22 per cent for eight cylinders.

The federal government charges a fuel excise of 38.14 cents per litre, which already provides a way for motorists to pay more tax commiserate with kilometres travelled. This generated $9.12 billion of the $15.5 billion collected from roads in 2005-06.

In a sample "per kilometre" pricing scheme put forward by the IPA which scraps all existing road charges, including vehicle registration, an average eight cents per kilometre charge has been proposed.

The IPA looked at three prices per kilometre, ranging from 4.6 cents to 10.4 cents per kilometre.

IPA executive director Brendan Lyon said its charges model showed it was possible to raise an extra $4 billion for infrastructure projects each year.

Under the IPA model, GPS technology would be used to keep track of drivers' locations.

Mr Lyon said the lowest "per kilometre rate" - for example, driving outside the central city and outside peak hour - motorists could end up paying less tax.

"Because we are discussing a three-tier charge, reflecting location and time of use, the base cost per kilometre could be substantially lower than what people pay now," he said.

Mr Lyon said a national road pricing scheme was about to go the Netherlands' parliament and a scheme was in place for heavy vehicles in Germany, Switzerland and Austria. London has had an inner-city road congestion charge since 2002, which has boosted bus patronage by 14 per cent, while cutting vehicles in inner-city London by 20 per cent.

"The overseas experience of road pricing schemes has been positive, but they have worked best where all revenues go back into improving public transport and the road network," Mr Lyon said.

But, politically it could be difficult for Treasurer Swan.

Queensland's Labor Premier Anna Bligh told State Parliament on February 24 that cabinet had rejected a Queensland Transport suggestion for a 30-cents per kilometre congestion charge.

"I required those documents to be brought to cabinet so that government could make a decision on them," Ms Bligh said while under Opposition fire.

"You know what we decided? We decided not to adopt the recommendations.

"There will be no congestion charging by the state government for as long as this government is on this side of the House."

[mr anderson]

THE Henry review was given a mandate to make recommendations across the broad sweep of tax policy. Many of its findings have made uncomfortable reading for the government.

Henry Tax Review here - http://taxreview.treasury.gov.au/content/Content.aspx?doc=html/pubs_reports.htm

http://www.theaustralian.com.au/news/opinion/henrys-recommendations-can-be-expected-to-tax-ingenuity/story-e6frg6zo-1225860813996

They include:

► Fuel and road taxes: Henry is in favour of congestion charging, which uses electronic monitors to tax vehicles according to their actual road use. He is also likely to urge that indexation of fuel excise, which was abolished when the GST was introduced, be brought back.

► Resource rent tax: The government is set to act on the review's recommendation for a new resource rent tax that would be applied to the cash flows of new resource projects once their capital costs have been paid off. Ken Henry believes the industry has paid less than a fair return for the extraction of the crown's natural resources. The tax could raise $7 billion to $10bn a year, but the industry will argue that it will reduce investment and long-term revenues.

► Savings and superannuation: Different forms of savings entail widely different taxes. Shares have dividend imputation while investors in shares and property get concessional capital gains tax. People who fund their investment with debt can raise their after-tax return. Most favoured of all is investment in superannuation, where there is a flat 15 per cent tax on contributions while earnings are also taxed at 15 per cent. Payouts are tax free. At the other extreme, interest income is taxed at a person's full marginal tax rate. Henry is expected to recommend a rationalisation, although the government is likely to have problems removing the concessional rate of capital gains tax or constraining negative gearing. It may raise the tax on superannuation contributions, which is seen as excessively generous to those on the top marginal tax rate, but any such move would likely be matched by a reduction in the tax on superannuation earnings. The government is likely to introduce new, tax-effective accounts to enable people to lower the tax on interest income.

► Families and welfare: A long preoccupation of Treasurer Wayne Swan has been the high effective marginal tax rates that people face when means-tested benefits are removed as they enter the paid workforce. The review is expected to recommend a rationalisation of benefit thresholds and the withdrawal rates. It may introduce flexibility in family taxation.

► Company tax and dividend imputation: The review was asked to improve Australia's international competitiveness and Henry has made it clear he believes dividend imputation, which is of no benefit to foreign investors in Australia, is a disincentive. The government is likely to use funds raised by the resource rent tax to lower the company tax rate from 30c in the dollar to 27c or 28c.

► Taxes on goods and services: Although the government ruled out any change to the GST rate, the Henry panel will make far-reaching recommendations for other goods taxes covering alcohol and fuel. Henry is understood to favour a uniform approach to taxing alcohol based on its alcohol volume, which would hurt wine producers but favour spirit manufacturers (and alcopops).

► Housing taxes: One of the most distorting taxes is the stamp duty on property conveyancing, which discourages people from moving home and leads them to buy houses too large for their needs. But it raises about 24 per cent of state tax revenue. The Henry review has considered replacing it with a land tax, but this would punish retired people living in their family home. The government will tread carefully in this area.

► State taxes: The GST was supposed to replace all state stamp duties, but they remain on the sale of businesses and insurance. They are inefficient for the economy and Henry will recommend they be abolished.

► Complexity: One of the Henry review's objectives was to make the tax system simpler. The benchmark reform will be making it easier for people with simple tax affairs to avoid completing tax returns. There will also be reforms to simplify tax for small business.

[mr anderson]

RACQ may back pay-as-you-drive trade-off

TONY MOORE
May 1, 2010

http://www.brisbanetimes.com.au/queensland/racq-may-back-payasyoudrive-tradeoff-20100430-tz17.html

Infrastructure Partnerships Australia showed the Federal Government raised $15.5 billion from road related revenue, and state governments $6.12 billion in 2005-06. State governments raise money from road through registration, stamp duty and licence fees, while the federal government derives revenue from fuel excise, the GST and fringe benefits tax.

IPA argues the current mix of fees and charges is inequitable, varies between states and does nothing to encourage drivers to fight congestion. The Queensland government has received $920.4 million in vehicle registrations in the past 10 months, with its registration fees the highest of the Australia states, ranging between 17 per cent for four cylinder vehicles and 22 per cent for eight cylinders.

Urban Transport Challenge: A discussion paper on a Role for Road Pricing in the Australian Context



This discussion paper considers the potential role for a national road pricing scheme in Australia. This paper considers how reform of transport taxation could both act as a transport management tool and assist Australia to fund its next generation of public transport and road projects.

Contents

Executive Summary 4
Fundamental Considerations for a National Road Pricing Scheme 8
A Road Map Proposal 10
1 Introduction 14
2 Setting the Scene: Why Do We Need Road Pricing? 16
2.1 The Established ‘Hands Off’ Approach to Managing Transport 17
2.1.1 Transport Externalities 18
2.1.2 Capacity Augmentation and Demand Management 18
2.2 What is Road Pricing? 20
2.2.1 Role of Road Pricing in Delivering Transport Policy Objectives 22
2.2.2 Using Road Pricing to Influence Behaviour 22
2.2.3 Examples of Behaviour-based Road Pricing Schemes 25
2.3 The Role of Governments 26
2.3.1 Road Related Revenue Collection 26
2.3.2 The Provision of Capacity and Maintenance 28
2.4 Is it Time for a New Approach? 30

3 Infrastructure Market Reforms – Lessons for Transport in Australia 33
3.1 The Rise of Demand Side Responses in Transport Policy 33
3.2 Lessons from International Road Charging Schemes 36
3.2.1 Singapore 36
3.2.2 London 36
3.2.3 Trondheim 37
3.2.4 Stockholm 38
3.2.5 Central European Truck Charges – Germany, Austria and Switzerland 38
3.2.6 Summary of International Schemes 39
3.3 Lessons from Unsuccessful Road Charging Schemes 40
3.4 Evolution of Technology 41
3.4.1 Systems Utilising Fixed Infrastructure 41
3.4.2 Systems Utilising Location Systems 42
3.5 Public Perception of Road Charging 43

4 The Policy Context – Is a Road Pricing Scheme Right for Australia? 45
4.1 Vision for Australia’s Transport Future 45
4.1.1 Transport Policy Objectives 45
4.1.2 Transport Policy Principles 46
4.2 Transport Policy Reform Agenda 48
4.2.1 Heavy Vehicles 48
4.2.2 Road and Rail Pricing Reforms 50
4.2.3 The Impacts of Other Reforms on Transport Policy 51
4.3 Reforms in Other Infrastructure Sectors 53
4.4 The Role of Pricing in Future Australian Transport Policy 56

5 Delivering National Transport Policy Objectives through Road Pricing 57
5.1 Registration Charges 58
5.2 Fuel Excise 59
5.3 Cordon Pricing 59
5.4 Congestion Pricing 59
5.5 Heavy Vehicle Charging Scheme 62
5.6 National Road User Charging 63
5.7 Considerations for Structuring a National Road Pricing Scheme 64

6 The Structure of an Australian National Road Pricing Scheme 67
6.1 Coverage of the Scheme 67
6.2 Revenue Outcomes 68
6.3 Changes to Established Revenue Streams 70
6.4 The Investment of Revenue in Transport Infrastructure 72
6.5 Other Considerations 72
6.5.1 Road User Equity Considerations 72
6.5.2 Relationship to Other Transport Modes 73
6.5.3 Technology 74
6.5.4 Road User Information and Communication 75
6.6 The Potential Structure of an Australian Road Pricing Scheme 76
6.6.1 Structure of a National Road Price 76
6.6.2 Comparison of an Australian Road Pricing Scheme with the Dutch Scheme 81

7 Conclusion 82

References 85-88
References that are noteworthy:

Booz Allen Hamilton (2007) Road Congestion Pricing: A Global Perspective, accessed 2
December http://www.roads.org.au/document/send/41#1

CSIRO (2008), Safe-T-Cam: keeping and eye on the road, accessed 4 September 2009,
http://www.csiro.au/solutions/psah.html

IBM (2007) ‘How it Works: the Stockholm Road Charging System, accessed 2 December
2009, http://www-07.ibm.com/innovation/au/howitworks/stockholm/pdf/HIW_tr_04022007.
pdf

Persad, K et al (2007) Toll Collection and Technology Best Practices, Centre for Transportation
research, Austin, Texas.

Skymeter (2009) The Advantages of Financial Grade GPS, accessed 2 September 2009,
http://www.skymetercorp.com/cms/index.php?option=com_content&task=view&id=112&
Itemid=109

:::::::::::::::::::::::::::::::

I glossed over it very quickly and these points caught my eye:

:::::::::::::::::::::::::::::::

A road pricing scheme based on distance, location and time of travel would improve equity outcomes across society by:

• Increasing the accountability of road users for the impacts arising from their road use;

• Removing upfront fees and charges that act as barriers to vehicle ownership – thereby reducing the impacts of social isolation; and,

• Reducing the current, disproportionate fees and charges that apply to some heavy vehicles.

The introduction of an Australian road pricing regime could also play a central role in managing demand, and help to fund the next generation of major transport infrastructure projects.

Road pricing could be set at a level that achieves revenue neutrality once existing road taxes and charges are removed; or at a level which increases revenue to allow expanded investment in the maintenance and construction of projects that promote a sustainable transport system, including road, rail and public transport.

Modelling undertaken for this discussion paper has shown that current road-related expenditure of $11.371 billion (2006-07) could be derived with a light vehicle road user charge averaging just 4.6c/km. A charge averaging 10.4c/km for light vehicles could generate revenue equivalent to that currently derived from road related fees and charges. Assuming full revenue
hypothecation to transport projects, this approach would provide an additional $10.857 billion per annum for investment in new transport projects.

[.............]

Thirdly, technology no longer appears to be a barrier to the introduction of road pricing. Tolling and location based technology have advanced significantly in recent years. With this technology comes the added potential to implement road pricing schemes across wider geographic areas, which can vary according to different periods of the day or levels of service on the road network. Because of the rapid changes in technology, the costs associated with the use of satellite-based technology are likely to continue to fall dramatically.

[........]

However, the key lessons from past Australian experience is the need for systems to be compatible across jurisdictions, while international experience tells us that most states are now leaning towards systems that incorporate GPS technology.

[.......]

The unique political circumstances surrounding the introduction of this scheme, and the high uptake of electronic tolling technology in many countries including Australia, suggests privacy issues are surmountable.

It may however be necessary for an Australian road pricing scheme to provide a ‘de-identified’ road pricing option to avoid community concern about privacy. This could be achieved through the use of odometer readings to provide distance-based charges or a combination of various other mechanisms such as the use of generalised ‘zonal’ locations or rigorous data management practices.

In the instance that a distance only charge would apply to the de-identified product, it would be necessary to apply the highest rate (urban peak road use charge) under the broad national scheme.

[citizenx]

So maybe they could go back and up your taxes based on the traffic the day you were driving.  I guess that's next.

Then if the government needs more money they could just go back in time and set up roadblocks, or just lie (heaven forbid.)

[mr anderson]

So maybe they could go back and up your taxes based on the traffic the day you were driving.  I guess that's next.

Then if the government needs more money they could just go back in time and set up roadblocks, or just lie (heaven forbid.)

I can foresee that IF people don't accept GPS transponders they'll adopt gantries with license plate readers to send you a bill.

Or they'll make it a complusory add-on to your license. Show us your license, registration and transponder unit.  

Either way it's a sad fact that many people won't resist paying 9c per Km, it'll just be another little "levy" to them. All the while they do not see the real picture, the true agenda; restricting our movements, growth and how we choose to travel.

All that will be focused on is 'congestion, environment and revenue for infrastructure' that the "Government" allow to fall apart or fail to plan for.

[AnarchyOK]

you're right about one thing, many people just see all these new taxes trying to be imposed on us as "just another tax" yer its ok , if everyone thought the same way as i did and felt the same way as i do about government, their would be no such thing