Don’t be fooled by PAYG road use spin

The road fee overhaul is spruiked as a win for motorists but there’s more chance of Tim Smith becoming premier than drivers saving money under the scheme.

Nothing scares a government more than the idea of taxing us less.

There is scarcely a tax on earth that does not increase.

So we must be wary of the idea that charging motorists for every kilometre they drive will leave motorists better off – and even more worried about how they’ll monitor it.

You obviously cannot charge fuel excise when people are driving electric cars – and we’ll supposedly all be getting around in them in a decade – so governments have to find another way to slug us.

The current charge for electric cars in Victoria is 2.5c per kilometre, which apparently costs the average electric motorist $330 a year.

Treasurer Tim Pallas says this compares to $600 in fuel excuse for the average motorist.

The government tells us that is uses this money to maintain our roads so it would mean, in effect, that the pot of money they have to keep our roads up to scratch is nearly halved.

Do you think for a minute that the government will abide that?

Treasurer Tim Pallas reckons you’ll save money. Picture: NCA NewsWire / David Geraghty

They could find efficiencies within government but there’s more chance of Tim Smith becoming premier.

So they have only two options – to increase the mileage tax or start extracting the money from you in other ways such as new and higher tolls or increased registration fees.

Victoria already has expensive rego. I pay $200 more a year in Melbourne than I did in Adelaide.

There is no way the total tax take from motorists will be reduced.

The federal government has not agreed to scrap the fuel excise if this mileage tax is introduced.

You could find yourself in a position where people driving petrol cars, who cannot afford an electric vehicle, will be slugged twice.

They will be people who live in the outer suburbs and, by virtue of where they live, have to drive more and consume more fuel.

As it stands, people who buy electric cars already pay higher taxes at the point of purchase.

Most are subject to the luxury car tax and, by virtue of the fact they are more expensive, buyers are paying more GST.

Motorists would not save under a mileage tax. Picture: Josie Hayden

But how does the government propose to monitor how far people are driving?

You cannot expect people to keep a log book – so you will presumably have to install some kind of tracking device in your vehicle that would communicate how far you have driven, and possibly where you have driven, to a government department.

There are examples of police trying to get hold of Covid QR code data to assist their investigations.

In WA, police wanted check in data for an investigation into someone who had a fight in a party strip on a night out – hardly rape or murder.

Providing this level of information to the government poses obvious questions of privacy and the safety of the data.

The bottom line is that if anyone says this new tax will save you money, tell ‘em they’re dreamin’.

Originally published as Don’t be fooled by PAYG road use spin