Is a 'user-pays system' the right approach for our roads?

Infrastructure Australia, an independent statutory body, recently suggested that the government should move away from charging vehicle registration fees and fuel excise in favour of a ‘’user-pays road system”. But is the solution practical?

The proposal would directly charge motorists depending on the distance they drive on our roads, while being touted as an option to fund major projects, lower congestion and contribute to the economy. According to the authority, the scheme could be applied to all regular motorists within 10 years, and within the next 5 years for heavy vehicles.

At the moment, Infrastructure Australia contends that motorists are not familiar with the current approach of paying for road use, whereby drivers often view roads as “free” due to a lack of clarity in the fuel excise they pay. This fuel excise, charged per litre at the pump, effectively acts as a road levy by charging motorists depending on the distance they travel and according to how heavy or inefficient their vehicle is.

The system has also been singled out for being “unfair, unsustainable and inefficient” – largely because of an expectation that less excise will be raised as cars become more economical, and given the inequality between metropolitan and rural regions where the latter are not afforded the same quality of roads yet still pay the same costs.

While such a proposal could potentially encourage people to become less reliant on their cars and also raise funds to reduce congestion, is the proposal any better than the existing approach? Currently, the ‘average’ motorist could expect to pay the following fees that contribute towards the road network:

Noting the above costs, what is immediately apparent is that one of the larger components of vehicle-related expenses, the green slip or compulsory third-party insurance, is outside the scope of the review. With this and external insurance premiums rising, a notable component of the vehicle related costs are going to remain at least what they are now.

However, the elephant in the room concerns how the system would be implemented. Is every single road going to be set up with tolls? Would roads have differing rates depending on the volume of traffic they cater for? Would vehicles be fitted with a tracking device to monitor their every movement? What impact would privacy laws have on tracking vehicles? With current toll gates prone to the occasional error, what’s to say the same issues wouldn’t be encountered? And how would drivers be able to validate every kilometre they have travelled? These are all issues that would cost motorists additional time and money, either directly or indirectly.

In terms of fairness, such changes would still discriminate against those: from rural locations; with a lower income; or disconnected from public transport. Consider those in remote parts of the country – every time they make a trip to their nearest town centre, or commute to a major city, they will be paying a considerable increase – and the quality of roads provided to them, or the portion of funding towards their roads, is still going to be inferior. Those who are isolated from public transport are inherently disadvantaged by not having an alternative to using their cars. How would the system compensate accordingly?

Although there may be benefits for those living in the major cities and suburbs supported by public transport, in designing a solution that is meant to be more ‘equitable’, this doesn’t offer progression. The current system is far from perfect, however, to recommend a new one that doesn’t address the current one’s shortcomings is questionable practice at best.