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AAA urges user-pays road system, starting with EVs

Fair’s fare: The AAA is concerned that road and transport infrastructure funding, sourced through the fuel excise, will diminish as more EVs hit the road, hence its call for a user-pays system.

Time for fuel excise to be scrapped as part of major reform to transport system: AAA

1 Feb 2019

THE Australian Automobile Association (AAA) has this week released a policy platform that calls on both sides of federal politics to commit more heavily to transport infrastructure and major reform, including the move to a user-pays road access charge, starting with electrified vehicles.
The peak body representing Australia’s state and territory motoring clubs and their eight million members has urged both the Coalition government and the Labor party opposition to commit – ahead of the upcoming federal election due in May – to finalising a new land transport white paper by the end of 2020 to clarify how Australia will “plan, maintain and fund the transport infrastructure of the future”.
The AAA’s manifesto also calls for the creation of a national office of road safety, “fundamental taxation reform” and a transition plan to move away from fuel excise-based road funding to a user-pays model designed to create a fairer and more transparent system for motorists.
According to the association, the fuel excise (currently 41.2 cents per litre) is simply a proxy charge for road use that penalises drivers of older or larger vehicles while those who own newer, smaller and more fuel-efficient vehicles are paying much less – or nothing at all, in the case of EV drivers – to use the same stretch of road. 
This is seen as unsustainable as vehicle technology continues to improve and the uptake of EVs gathers speed, particularly in light of the release this week of a wide-ranging report by the Senate Select Committee on Electric Vehicles that recommends a national EV strategy be developed.
The report stopped short of supporting measures proposed by committee chairman, independent senator Tim Storer, which included a road-use charge for EVs (from 2025/26) that parliamentary budget office costings have shown could raise an estimated $1.3 billion within 10 years as the contribution of the fuel excise to road funding declines.
However, the AAA has put structural reform such as this at the core of the proposed white paper, arguing that a move to a market-based access system “will allow future governments to transparently deliver priority transport outcomes” including safer roads, reduced costs for motorists and environmental and health benefits. 
Not wanting to turn people off from buying EVs, the AAA is quick to point out that any road user charge for ultra-low emissions vehicles would need to be set at a rate that maintains existing incentives as part of a transition scheme that would gradually wind back the excise for all other light vehicles. 
“Transport investment is good economics, but we can’t simply invest on an ad hoc basis,” said AAA chief executive Michael Bradley.
“The development and management of our national transport system is today fragmented and unfocused and until we rectify this, consumers will continue to face longer commutes, higher costs and a less safe network.”
On tax reform, the AAA wants to remove the luxury car tax and the remaining five per cent tariff that applies to vehicles imported from countries with which Australia does not have a free-trade agreement – immediately, in the case of plug-in cars, and phased out over the next four years for other vehicles. 
The aim is to “put downward pressure on new-car prices, encourage fleet renewal and incentivise the uptake of new vehicle technology” by making EVs more price-competitive with traditional models.
Among other policies detailed in its report, the AAA has also called on the next federal government to support local R&D of EV batteries and related technologies, develop a CO2 standard for all new light vehicles, introduce a real-world emissions test program, continue funding the Australasian New Car Assessment Program, increase budgets for programs such as black spots and rural roads, develop a national metric for measuring serious injuries caused by road crashes, and upscale activities and legislation surrounding autonomous vehicles.
The AAA says Australia has not had a comprehensive land transport blueprint since 2004 and that since then our population has grown by 25 per cent and transport and consumer demands have both changed dramatically.
“Australians motorists will pay almost $60 billion in federal taxes over the coming four years and … without significant reforms they will continue to get a very poor return on their investment,” Mr Bradley said. 
“Australians pay a lot for the privilege of personal mobility and it’s very clear that Australians expect so much more than they are currently getting for that investment.
“With congestion continuing to worsen, transport costs continuing to rise, and national road safety targets all being missed, voters want their taxes ploughed back into the roads, trains, buses and cycleways needed to relieve pressure and get their lives flowing again.
“There are few cheap solutions, but unlike many other groups seeking a share of federal funding, motorists bring their own money to the table.
“Our transport system isn’t keeping up with growing demand, and our economy and quality of life are suffering as a result.”

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