Should roads pay their way?

It seems we continue to pay for crucial infrastructure via out of date schemes like fuel or car taxes that no longer reflect the surge in cars numbers, endemic congestion in our cities or the rapidly escalating cost of road building. This begs the question, should roads pay their way?

Traffic moving along roads

"We’re continuing to pay for crucial infrastructure through out of date schemes like fuel or car taxes that no longer reflect the surge in cars numbers, endemic congestion in our cities or the rapidly escalating cost of road building."

At the recent Roads Australia Summit I chaired a session on road user charging, a subject that’s now a very hot topic here and overseas as it picks up significant global momentum.

In Australia, government agencies at a both state and federal level, as well as business groups and the media, have been talking up the problems of investing in new or improved roads for some time now.

The big problem is that we’re continuing to pay for this crucial infrastructure through out of date schemes like fuel or car taxes that no longer reflect the surge in cars numbers, endemic congestion in our cities or the rapidly escalating cost of road building. In other words there’s now a huge gap between what’s collected and what needs to be spent.

Infrastructure Australia has already called on the Federal Government to run a national study looking at the social, technological and financial impacts of replacing those traditional taxes with charges based on how far and when people drive-something they appear to be close to doing I believe.

The Committee For Sydney has also stepped in to the debate in much the same way. Their new report “A Fork In The Road” suggests that the only way to tackle the city’s current and future traffic problems is through “an inquiry into the range of potential road pricing or congestion charging mechanisms to determine what regime would be appropriate for Greater Sydney.” 

But while there’s been a lot of talk here about the need for change, real action is looking like it may have stalled. Australia is definitely lagging behind places like Europe, California, Oregon and even New Zealand where practical road pricing trials are now fairly well advanced and governments seem to have accepted they need to act.

While the Council of Australian Governments, or COAG, has recently signed off on a heavy vehicles trial we really need to be seeing far more extensive trials and fast track legislation of road pricing that’s also nationally coordinated.

Being too slow to act is already overtaking governments as technology and consumers quickly disrupt the whole idea of driving and car use. Electric and driverless cars have made huge strides in just five years & they will be a real force in a decade, further undermining our current funding mechanisms.

Of course like all urban or tax reform the public is key. Consumers have shown they’ll readily change behaviour as new opportunities emerge and Uber’s success shows just how out of date our transport taxation models now are.

Greg Steele

Group Executive for Asia Pacific Ask me a question