Distance based road taxation
December 31st, 2006 at 3:05 pm by David FarrarI generally support road and transport funding being based on actual road usage, as the MOT is now looking at, rather than close substitutes such as petrol tax. Both are way better than property rates though which are a nutty way to fund local roads.
The one big advantage petrol tax has is it simplicity. Four oil companies once a month tot up their sales and give a big cheque to the Government. A lot easier than three million plus car owners getting individual billls based on their road usage.
However sensible road charges can and should lead to more efficient funding and expenditure on roads. I even back congestion charging for peak times etc.
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December 31st, 2006 at 4:17 pm
The pros are that charges are much more closely related to road usage. I guess it could be administered through the WOF or registration where you pay 6 or 12 months in advance and then make ap any diference the next time, a bit like an estimated electricity reading.
The down sides are
- it wont be brought in in a fiscally neutral fashion (history shows this)
- open to more corruption
- massively more expensive administration
- cronyism – community service card holder discounts, employee discounts in adminstering bodies?
- retrospecitve price rises like were applied to diesel
- it will no doubt be some non-tranparent formula based on percieved ability to pay, car size, car value and all the other usual punitive measures applied to anyone who gets of their butts in this country.
It will likely become yet another form of rationing via user pays with the usual exemptions for the chosen ones.
I would still favour taxation via feul, with special cases like electric cars charged separately.
Vote:January 1st, 2007 at 10:52 am
Have you noticed that the latest Sydney Road tunnel has gone bankrupt ( it only took 6 months).
Vote:So much for user pays.
The truth is that considering current land costs ( very little for a tunnel by the way) and construction costs any “new” roads are hopelessly uneconomic.
At the other end of the spectrum there is not enough road traffic for most local roads to even pay for maintenance. The likely standard is a pot holed , unsealed road for most suburban subdivisions if the users were to pay for accessing their property.Of course that is the reason the road is there in the first place to provide access. Show me a peice of land without road access and the value to the owner is very low compared to road access.
Indeed build a new motorway and the value of land nearby shoots up. The area suddenly booms, increased traffic produces congestion which calls for widening the the motorway so that more houses can be built.
January 1st, 2007 at 11:52 am
I don’t like the new tax being proposed because I see it as yet another tax… Its not like they are talking about putting this in place and removing some more unfair method of taxation for roads, they are just adding another one.
I do agree that those who use the roads should be the ones who pay for them but I don’t think it should be government controlled. I support complete privatisation of the roads and all government taxes on roads and petrol being axed.
Vote:January 1st, 2007 at 11:16 pm
A distance based road tax is a fairer system. Fair systems are not something to be discouraged. A distance based tax based on vehicle weight is well established for Diesel, surely it would be simple to just extend this to all vehicles and abolish petrol tax entirely. A lot of boat owners will be happy they are not paying for roads while getting about on their boats. I’ll be happy mowing my laws and running my weed eater as well…
However what I find amusing about this is that there has been a massive increases in petrol tax income for the Govt over that last 5 years. Classic creeping tax increases so evident in a Labour Govt. Yet still they want more.
Vote:January 2nd, 2007 at 8:32 am
Was not the big selling idea [spin] about the greatly promoted ‘user pays’ theory supposed to simplify these charges. Pay for all vehical, road and insurances charges at the pump. No reg/wof/licence NO GAS ..
Vote:Simple but have any poly’s got the guts to do it, NONE.
January 2nd, 2007 at 7:49 pm
I would have thought the Sydney tunnel going broke is exactly why public/private is a great idea. The government loses no money, the company goes broke (and I guess a bunch of poor pensioners lost their shirts – but they shouldn’t be investing in infrastructure if they can’t afford to lose their money). Someone else swoops and buys the assets for a fraction of their original cost, and the tunnel tolls go down. Everyone starts using it, and things are generally happy.
If the govt had owned the thing, they would refuse to change the toll, complain about nobody using it, and generally have wasted a bunch of taxpayer money. The fact that somebody (a group of somebodies) was stupid enough to pay over the odds for the concession is not a reason to be upset. Of course, I am sure they will find a way to sue the govt given the number of promises the NSW govt broke along the way – Labour govts aren’t known for their ability to abide by the terms of a contract.
Vote:January 2nd, 2007 at 9:38 pm
Distance, location and time of day based charging, it will be the fairest method, and will address a significant local authority rating issue. But note, dependant on the right electronics available. Wireless hookup to your bank account and the Police computer – a must. Won’t start in the morning? might be your bank balance or the cold! Pulled over, Mr PC will know where you have been. That’ll make your eyes water.
Vote:January 2nd, 2007 at 10:23 pm
If you’ve ever been to many places in europe NZ has far better roads and footpaths, despite our spread out cities. This is because the tax take is massive. We could have roads like polished silver but only a small portion goes where it should and no-one knows where the rest goes.
“user pays” was always a rort. If the left didnt realise this (as most of us did after one second’s thought) they certainly very quickly cottoned on to the wealth redistirbution potential af high taxes + user pays. Its a sick joke – always has been and always will be.
Vote:January 3rd, 2007 at 12:17 pm
Fuel tax IS distance-based tax. Think about it.
If we drive more economical vehicles and the tax take drops then all they have to do is increase the tax. Cheap, simple and effective. Only “simple” applies to Labour.
Vote:January 3rd, 2007 at 9:13 pm
What you’ll get is diesel like road charges + petrol prices that rise to be as they would have been without distance tax.
Vote:After all you have already demonstrated your acceptance of the price.
Hulun gets double tax within 5 years.
The sheep will barely baaaaa.
January 4th, 2007 at 9:31 am
C’mon guys,
Vote:Everyone is a road user in some form. You may not carry your precious person along one but almost all the goods and services you purchase in the normal course of living your life require a road somewhere in their development or delivery.
Makes a bit of sense really to apportion the costs relative to the usage.
I am a diesel user myself and have no problems with the RUC regime as it stands. GST on fuel is another example of a tax on a tax and is a bit suspect but I can also live with that in the interests of taxation efficiency.
Where I have a problem is with the amount of money extracted through fuel taxes that go into the Consolidated Fund.
Special taxes are not the means by which Government should fund its general operations.
January 4th, 2007 at 10:07 pm
Given NZ has had distance based charging since 1977 this is hardly a huge step. The admin costs are not enormous, the charges have generally reflected road spending divided by the benefits gained by different parts of the vehicle fleet (i.e. much more for very heavy trucks with very few axles/tyres because of road damage caused).
Some myths stated above:
1. ALL fuel tax goes to Land Transport NZ directly or indirectly ever since the 2005 budget. In fact Cullen injects more into it that he gets in road user revenue. I’m hardly a Labour lackey, but it’s true. It would be better if it was permanent (through legislation rather than annual budget). So moving on…
2. Fuel tax is hardly a distance charge. A hybrid car pays around 2/3 the fuel tax of a non hybrid car and creates the same road damage and benefits from the same road improvements. Fuel tax was abolished for diesel years ago precisely because it is a very bad proxy for road use – the damage caused by far heavier trucks is not reflected in far more fuel consumption as bigger diesel engines are progressively more efficient per tonne km.
Road User Charges have always been dedicated to the National Roads Fund/National Land Transport Fund in their entirety.
This has been getting investigated since 2001, but the reporter concerned is too lazy to look at the relevant cabinet papers which were publicly released ages ago. No reporters read them thoroughly.
In other words – NZ journalistic standards continue to be amazingly undergraduate in their level.
Vote: