The Henry tax blueprint
What does it mean for our congested road networks?Not a razoo at the moment - but we'll get to that in more detail in a moment.
The federal government has released the final 1000-page report from Australia's Future Tax System Review, chaired by treasury secretary Ken Henry - the nation's most powerful bureaucrat.
The report provides a blueprint for the future, with the promise of a simpler, fairer and stronger tax system, unlike the unwieldy, band-aid like mess we have at the moment.
The tax review produces a raft of recommendations across all areas of Australian society -- I certainly like the one about making tax returns simpler -- but for today's exercise let's concentrate on transport.
There was one news story last week, as reported in News Ltd newspapers, that the review was tipped to include a recommendation that every motorist and motorcyclist would pay for every kilometre they travelled - with an additional congestion tax thrown in for good measure.
The final report unambiguously supports a congestion tax, and it also says that "new technologies may further enable wider application of road pricing".
Other recommendations of the report include:
- The Council of Australian Governments (COAG) should accelerate the development of a system to ensure that heavy vehicles pay for their specific marginal road-wear costs;
- States improving compulsory third party insurance to better reflect individual risks; revenue from fuel tax imposed for general government purposes should be replaced over time with revenue from more efficient broad-based taxes;
- The revenue-raising component of state taxes on motor vehicle (and motorcycle) ownership and use should be made explicit, and over time only be used to recover those costs related to road provision;
- The administrative costs of providing government services should be recovered through user charges where applicable;
- Governments should continue to reform road infrastructure provision, applying economic assessment to investments comparable to that for other forms of infrastructure;
- COAG should develop a National Road Transport Agreement to establish objectives, outcomes, outputs and incentives to guide governments in the use and supply of road infrastructure. COAG should nominate a single institution to lead road tax reform, and ensure implementation of this agreement.
In its response to the report, the government has barely scraped the surface, with only a handful of the 138 recommendations being adopted - and some of them watered down (one political commentator has even questioned whether Wayne Swan and Kevin Rudd had even read the report…).
So far, transport hasn't been touched, but the government is promising that it will be responding to other elements of the report in coming months. Just what that means for motorcyclists we'll have to wait and see.
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