Australia’s peak motoring body says the Budget’s inclusion of funding for a real world vehicle emissions test is a significant initiative that will make Australian motoring cleaner and more affordable.
The Volkswagen scandal showed how Australian families and businesses are being cheated out of promised fuel efficiency and environmental performance. The AAA has campaigned for Australia to adopt a real world test program – like that now used in the European Union – to keep carmakers honest and give consumers the information they deserve when buying a car. The Government’s $6.5m commitment to establish such a program is welcomed, as is the bipartisan support this program now enjoys.
The AAA also welcomes the Government’s $9.1 billion investment in 2022-23 road funding but is disappointed there is no expansion of road safety performance reporting obligations of state governments receiving these Commonwealth transport infrastructure funds. It is completely unacceptable that in 2022, at a time when COVID infections and deaths are reported daily and segmented by age, gender, and location, Australia is still unable to quantify the number of people seriously injured in car crashes each year. Quantifying Australia’s road trauma challenge and the effectiveness of the measures being deployed to address them, is the most meaningful thing the Commonwealth can do to save lives on Australia’s roads.
There are also serious transport problems left unaddressed in the Budget. The decision to booby-trap the Commonwealth Budget with a 22.1cpl fuel excise cut for the next six months will fix neither Australia’s transport tax problems, nor the factors driving up petrol prices. The AAA notes the change may possibly offer some short-term relief for motorists in a volatile global fuel market, but believes it generates more medium-term challenges than it solves.
The immediate problem is that there is no guarantee that this tax cut will be passed on to motorists, as the international experience shows similar measures have delivered fuel retailer profits, rather than price drops for consumers. The AAA looks forward to understanding how the Government will police this change.
At a time when Australia’s transport network is sliding down the global rankings, the Government has $2.65 billion less to spend on desperately needed safety upgrades, public transport expansion, and flood repair. Irrespective of May’s election result, the Commonwealth Treasurer of September will have the unenviable challenge of increasing petrol prices by 22.1cpl when the “temporary” reduction expires. It is also worth noting the increase will expand to 24.2cpl once GST is applied to the additional excise.
Tinkering with fuel excise ignores the fact this tax is already past its used-by date. The AAA is far from the only observer to note it is no longer fair or sustainable to have Australia’s notional ‘road user charge’ based on the consumption of petrol and diesel, given we live in an era of rapid electrification and fuel efficiency gains. Rather than offering an election sweetener, the Government should be acting on the formal advice of Infrastructure Australia (2021), the Productivity Commission (2017), the Harper Competition Review (2015) and the Henry Tax Review (2009) and addressing the urgent need to replace excise with a national transport tax system fit for the 21st Century.
Other transport projects of note in the budget include:
- Blackspot funding has decreased from $137m to $128m
- Bridges Renewal Program has increased from $90m to $131m
- Roads of Strategic Importance has increased from $702m to $1.13b
- New regional Australia level crossing safety program: $180m
