A dramatic fall in petrol prices four years ago is being blamed for adding to the nation’s road toll and confounding government efforts to push the death count below 1000 by early next decade.
As another Easter weekend death count is tallied up by authorities, Australian National University economists have released a study that finds between 1989 and 2017 road deaths rise by about 0.2 per cent whenever prices drop by 1 per cent.
The findings, the first of their kind in Australia, suggest that about 83 fewer people would have lost their lives on Australian roads in 2016 had prices not slumped through 2014 and 2015.
While falling petrol prices have helped households weather other costs such as mortgage payments at a time of low-income growth, they may be raising people’s exposure to roads as more trips are undertaken than otherwise would be.
In the first two months of 2018, some 188 people have died on the roads, compared with 166 in 2017 when the annual total reached 1227.
Paul Burke, a fellow at the ANU’s Crawford School, says the findings reflect research in the US, and describe an effect that is well known to police forces.
“Part of the story is that low petrol prices encourage people to drive. Road deaths per vehicle kilometre travelled also increased.
Falling unemployment may also be a factor driving up the death toll as well as changing patterns of drug use, according to the study, which has recently been published in the Economics Society of Australia journal.
Dr Burke says the research supports the need for road safety campaigns to be ramped up at times when petrol prices are low.
While he doesn’t recommend using hikes in fuel excise as a way of meeting Australia’s road death target, as the increases would be dramatic, he warns any further declines in fuel and other energy costs could make meeting the target more difficult.
Another factor that could worsen the death toll is the drift towards more electric and hybrid motors, which not only avoid all or some fuel excise, but lessen the direct “marginal” cost of driving more.
Dr Burke says that failing to replace the current fuel excise system with a pay-per-kilometer system would place upward pressure on road death risks.
“As a broader reform, road pricing is important because fuel excise will die as a tax stream.
“The most exciting part of road pricing is that it could be used to manage congestion by having higher charges when you enter the CBDs at peak our, and more dangerous vehicles could have a higher road user charge that would create an incentive to move to safer vehicles.”
Dr Burke also urges governments to speed up the change to road pricing before the next generation of electric-vehicle owners become accustomed to running their vehicles free of excise.
“For road pricing now is the right time to move because once we have switched to electric vehicles people won’t want to pay the exise.”
“It would make sense to get started now.”
The drumbeat of calls for road pricing continues to grow, and has already won backing from the Productivity Commission, the Harper Competition Review, the Henry Tax Review, Infrastructure Australia, Treasury secretary John Fraser, and motorists’ groups such as the Australian Automobile Association.
Australia’s road death toll fell 5 per cent in 2017 from 2016, but was still 7 per cent higher than in 2014, and 23 per cent above the 2020 target.
Extracted from AFR.