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Road User Charging Presents an Unprecedented Opportunity for Government Tax Reform

Fees and charges such as registration, sales tax, fuel excise, luxury taxes, licence fees and others should be consigned to history as new mobility technology presents Governments with an unprecedented opportunity for financial reform.

The Federal Chamber of Automotive Industries Chief Executive Tony Weber today launched a comprehensive discussion paper on the potential for a nationally consistent and efficient approach to road user charging.

The full discussion paper is available for download at this link.

“Our powered mobility options have been bound to the internal combustion engine for more than 100 years yet today we are witnessing technological advances such as electric and fuel cell technology that will set up society for the next hundred years,” FCAI Chief Executive Tony Weber said.

“The future of mobility is transforming rapidly. Against this revolution, now is the time to look ahead in the areas of regulation and funding and for governments to have the courage to overhaul outdated practices. Governments can develop new and certain revenue streams to pay for roads and infrastructure while vehicle owners will be relieved of a myriad of outdated, confusing and inefficient charges.”

Mr Weber said a uniform, simplified road user charging approach had the potential to eliminate charges such as vehicle registration, sales tax, luxury car and luxury sales tax and replace them with one charge.

“An efficient road user charging scheme can address all vehicle users regardless of the type of vehicle they drive, how often it is driven and the purpose of the travel. For example, it could be based on vehicle mass, distance travelled, time of travel or a combination of factors.

“Comprehensive reform of this kind may take some years to fully implement. However, we should engage on this topic just as other countries are beginning to do now. The key outcome will be a national approach for all Australians.”

The FCAI paper identifies that ongoing developments in vehicle connectivity could be used to simplify and automate road user charging.

Mr Weber added that the FCAI acknowledged this was a fundamental change from the current legislative environment.

“We appreciate this type of reform will take some time to fully implement. However, with good planning, vision and courage to follow through, we can move Australia ahead of the rest of the world and create nationally consistent approaches that avoid the proliferation of different taxes and charges and different approaches across different levels of government.

“Vehicle owners and governments can have clarity and certainty regarding costs and ensure the focus remains on equity, efficiency and simplicity. Governments also benefit through reduced bureaucracy and administrative charges.”

Mr Weber acknowledged that the Victorian Government had already introduced a road user charge bill into Parliament that impacts Zero and Low Emission Vehicles.

“We understand the drivers for these specific proposals focus on reducing carbon emissions in parallel with a user charge for vehicles that are not subject to fuel excise. On balance, the incentives being offered supporting the purchase of electric vehicles do offset the revenue that will be raised through the charge.

“We support the Victorian Government’s plan to take the initial steps to introduce a road user charge. Over the longer term we believe a comprehensive approach to road user charging that remains technology neutral will result in a greater benefit to motorists and to governments.

“Opportunities for important reforms like this are not common. The FCAI and its members will work alongside governments to develop the next steps which will ultimately benefit all sectors of the community in the years ahead, Mr Weber said.