Turnbull Government considers new user pays system for cars

ALL motorists could be tracked and charged fees based on how many kilometres they travel if a radical new proposal is adopted.

Drivers facing an overhaul of the road pricing system.

ALL motorists could be tracked and charged fees based on how many kilometres they travel if a radical new proposal is adopted.

The Turnbull Government has announced it will investigate whether fuel excise and registration fees should be scrapped, and replaced with a system that charges drivers for how much they use the roads.

Motorists currently contribute to road funding through rego, licence fees and stamp duty but mostly through fuel excise which is added to the cost of their petrol.

However, the rise of more fuel-efficient vehicles is proving a headache for governments because it is reducing the amount of fuel excise that can be collected.

These fees also do not cover the full cost of improving roads, with taxpayers making up the 22 per cent shortfall, regardless of whether they drive cars.

How we pay for roads. Picture: Australian Infrastructure Plan

The problem is only expected to get worse in the future, with the CSIRO estimating money the government gets from fuel excise is expected to fall in real terms up by up 45 per cent by 2050, despite growth in Australia’s population, economy and kilometres travelled.

This has consequences for governments which are already struggling to keep on top of infrastructure spending and relieve traffic congestion.

RELATED: Congestion impacts all drivers so why are some motorists paying more?

Infrastructure Australia says the current funding model is unfair, unsustainable and inefficient.

It believes the current funding model is unlikely to be enough to build the infrastructure Australia needs in the future.

In its Australian Infrastructure Plan, released in February, it sets out priorities for the next 15 years and 78 recommendations for reform.

Urban Infrastructure Minister Paul Fletcher announced today the government will explore five key initiatives, including a study looking into the benefits of road user charging.

Mr Fletcher said many people did not realise they already paid for roads through their registration fees and fuel excise. This could be as much as $50 a week, but those who owned fuel efficient vehicles paid less because they use less petrol.

But he said any changes would not happen overnight.

“If there were to be any changes in this direction, that’s a 10 to 15 year journey,” Mr Fletcher told ABC. It would not be introduced unless federal, state and territory governments agreed.

He said introducing a system that uses GPS technology to track vehicles and charge users based on how far they travel, could also provide a more direct connection between these charges and how money raised was spent.

Currently money collected from fuel excise does not necessarily go towards improving roads.

“One of the aims of this study will be to have a very thorough look at our current system and how it works,” Mr Fletcher said.

He said tracking technology would also provide more accurate information on where people travelled and this could be used to help decide which roads got upgraded.

Other initiatives the government will look at include a discussion paper on heavy vehicle charges, working with state government to develop urban rail plans for Australia’s five largest cities and improving the collection of data on freight movements and public transport, and a strategy to improve its productivity and efficiency.