RACQ may back pay-as-you-drive trade-off Urban Transport Challenge: A discussion paper on a Role for Road Pricing in the Australian ContextThis discussion paper
May 1, 2010
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.
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 that are noteworthy:Booz Allen Hamilton
(2007) Road Congestion Pricing: A Global Perspective, accessed 2
(2008), Safe-T-Cam: keeping and eye on the road, accessed 4 September 2009,http://www.csiro.au/solutions/psah.htmlIBM
(2007) ‘How it Works: the Stockholm Road Charging System, accessed 2 December
pdfPersad, 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&
:::::::::::::::::::::::::::::::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.