Wednesday, April 23, 2008

Future of petrol tax?

Here's a thought. Bearing in mind the report in Stuff today about regional fuel tax being rethought, should the way people pay for roads move away from fuel tax?
.
At the moment diesel vehicles pay for road use through road user charges. Now there are some problems with it, but it means you pay directly for the distance you travel. You pay more by weight so the more damage you cause the road, the more you pay. However the system used in New Zealand, while once revolutionary, is being superseded in other countries by an electronic system that allows charging by time and place.
.
Now there are plenty of governance issues that ought to be resolved first. For starters who sets the charges and where does the money go. Charges should be set on a reasonably economically efficient basis, to make a commercial return on running roads - and the money should go to road companies. However I don't want to focus on that for now... but on the technology and the practicality of it all.
.
Tolls sound like a useful option, but they are really only practical on crossings or motorways which have few alternatives. So that in itself is no solution except for maybe the occasional road - Auckland Harbour Bridge could be tolled and that could pay for another crossing which could be tolled too, for example.
.
Congestion charging is more useful, but again you have to be careful how it is applied. It could replace rates funding for cities, but shouldn't be used to pay for public transport. Public transport users should pay for that. If done well, congestion charging can reduce delays and mean road users are paying to use scarce road space. However London is not the way to do it for New Zealand.
.
Longer term it would be better if everyone had the option of road user charges, in an electronic form. The first step would be changing the current road user charging system to vary by location, weight and time (if only night and day), so that trucks and diesel cars would pay closer to the costs of using different types of roads - motorways, urban streets, lightly sealed rural roads and unsealed roads. It would also improve enforcement and mean trucks pay according to route, like trains have been. More accurate charging of trucks, buses and diesel cars wouldn't be a bad thing, especially if the money was better linked to the cost of maintaining and building roads. The second step is to offer it to all other vehicles. You pay by distance and road you're on, and you get a fuel tax refund - a full fuel tax refund (including the GST on fuel tax).
.
Meanwhile fuel tax can continue to increase, but more and more people would move off of fuel tax onto road user charges, because they would vary only according to what was needed to maintain and upgrade roads. There would also be a change as to how road improvements were funded, because it could be linked directly to money raised from road users on that road. No longer could improvements be made on empty roads, and improvements on busy roads would be less likely to be delayed.
.
However there is little sign Labour wants to move away from fuel tax, in wanting to introduce regional fuel taxes for petrol and inexplicably, diesel (for which half is not even used on the roads). National in 2005 supported moving from rates, motor vehicle license fees and fuel tax towards tolls and road user charges.
.
Can National get this right? Does it want some help?

No comments: