CONGESTION impacts all drivers so why are some motorists paying more than others when it comes to funding new roads

Experts highlighted the “unfair” system that is currently used to help fund new roads in Australia at the National Infrastructure Summit in Sydney this week.

The current system benefits those who drive fuel efficient cars, and improved technology is reducing the money that governments collect from fuel excise and can use to build essential infrastructure. The introduction of driverless cars could see the government’s funding base slashed even further.

Motorists are now being asked to consider contributing more towards the cost of the roads that they use.

Countries such as Singapore and the United States are already trialling new technology including satellite tracking, to raise more money.

It’s an idea that federal Assistant Infrastructure Minister Jamie Briggs thinks that Australia should be considering, to help get new road projects off the ground and improve gridlock.

“In Singapore, there are plans to implement a pricing system based on satellite position tracking by 2020,” Mr Briggs said at the summit hosted by the Australian Financial Review.

“This will mean that road users will be charged based on distance, location, time and type of vehicle.”
In the US, Oregon is testing a pilot scheme to replace fuel tax with a mileage based tax to help fund its main roads.

Mr Briggs said he understood that some might be wary about new types of road pricing but these types of ideas needed to be on the table if Australia was serious about funding the infrastructure that was needed in the future. Congestion could cost Australia $53 billion a year in lost productivity by 2031.
“In today’s world we generally accept that you pay for the service you receive. Road pricing remains the exception,” he said.


Currently motorists contribute to road costs mainly through registration fees, tolls and fuel excise. But this contribution goes no where near covering the cost of building and maintaining the roads, which are mostly funded by state governments with help from the federal government.

The problem of funding is made worse by declining car use and the rise in popularity of fuel efficient vehicles.

Scott Charlton, chief executive officer of toll company Transurban said Australia once relied on fuel excise to fund transport infrastructure but this source was drying up.

“Every time you replace a 20 year old sedan with a late model car we lose approximately $350 fuel excise per annum,” Mr Charlton said at the infrastructure summit.

He believes the way that Australia funds transport is past its use-by-date, is not fair because those who cannot afford to buy the latest model car, as well as rural drivers who drive long distances, are paying the most.

“No one understands how unfair the current system is,” Mr Charlton said.

“The driver of a late model fuel efficient car is paying far less in fuel excise than the driver of a less efficient car … despite them having the exact same impact on congestion and on infrastructure,” Mr Charlton said.

But Deputy Prime Minister and Infrastructure Minister Warren Truss said he didn’t think tracking Australians using satellites would “pass the pub test” and the public weren’t ready for congestion and time of use charges for roads.

“I think people still like to be able to visit their girlfriends without the whole world knowing,” Mr Truss joked.

NSW Premier Mike Baird acknowledged that doing unpopular things such as introducing tolls on Sydney’s WestConnex motorway project would likely to spark a public backlash, but said governments had to be prepared to explain the benefits.

“I think the community and public is up for these honest discussions,” he said.

He said his government had inherited a road pricing system in Sydney that was “all over the place” and which featured different priced tolls in different areas. His government is now looking at ways of making the tolls more efficient, which does not necessarily mean introducing new charges.

Mr Baird also acknowledged the issues with cost recovery saying the state’s train system only got back 20 to 25 per cent of its operating costs.


The Productivity Commission and the Harper Review have both recommended “cost reflective” road pricing be introduced in Australia.

Transurban will soon launch a pilot study in Melbourne to test three types of user pricing and how they impact on motorists’ behaviour. These include distance per km charge, a one-off charge based on anticipated kilometres and a price per trip/access charge. It will also test time of day charges, and a one-off fee for entering the CBD.

The data will be shared with the federal Department of Infrastructure. Mr Charlton said he believed that people would support user pay charging if they could see the benefits, including the time savings on their commute time.

“This is all about making a decision about the quality of life we all want as Australians,” he said.
“We simply cannot keep building our way out of congestion, and we have to change the attitudes that existing infrastructure is free once it’s built.”

Meanwhile the development of new technology such as driverless and electric cars could also have a huge impact on Australia’s reliance on fuel excise to fund infrastructure projects.

Mr Charlton said the automotive industry was just five to 10 years away from driverless cars entering the market, with mass adoption expected by 2030.

The mining sector is already testing out autonomous trucks, according to infrastructure development company Transfield chief executive officer Graeme Hunt.

“If the technology becomes mainstream … the driverless car could conceivably drop off dad and mum at different workplaces, and the kids, one by one, at different schools,” Mr Hunt said.

“The need for a second car in the typical family diminishes and with the reduction of vehicles in households you might find that some of the road investments, which we’re making today, may be redundant tomorrow.”


Another complicating factor is the phenomenon of “peak car”.

Grattan Institute chief executive John Daley said falling car use was one of the most important trends when considering infrastructure investment.

He said Australia was following a global trend in developed countries of stagnant car use. The most recent Bureau of Transport Infrastructure and Regional Economics data suggested passenger kilometres travelled in Australia was falling or stable.

“We should be very careful about the assumption that road usage is going to keep rising in the future at the same rate as it has in the past,” Mr Daley said.


But speakers at the infrastructure summit have warned of the damaging costs to Australia’s productivity if nothing is done to address congestion and infrastructure that is not keeping pace with population growth.

“If nothing changes, by 2035 Sydneysiders will face congestion levels on par with Mexico
City and will waste 110 hours a year in traffic,” Transurban CEO Scott Charlton said.

Mr Charlton said that congestion in Sydney and Melbourne already ranked alongside London, Los Angeles and New York, despite these cities being three times their size.

Congestion is estimated to cost Australia $13.7 billion a year, and this expected to rise to $53 billion a year by 2031.

Assistant Infrastructure Minister Briggs said Australia needed to embrace more innovative ways to fund infrastructure.

“We desperately need to improve our infrastructure so we can deliver goods across the country and to the rest of the world more efficiently – otherwise congestion will continue to act as a handbrake on our economy,” he said.

Extracted in full from