Now, on to cars

Yesterday, the newspapers reported that the government was considering a plastic bag tax. I wrote that I thought that was a good idea. However, by the end of the day, for no apparent reason, the government had ruled it out.

Today, the newspapers are reporting that there is a proposal before the government for a ‘traffic tax.’ Many have proposed this before and the Australian Automobile Association’s plan is similar to others. It proposes to reduce registration fees and then use electronic tolling to charge motorists by use with lower charges for off-peak use and when people have environmentally friendly cars. In Finishing the Job, Stephen King and I proposed a similar system although we wanted to ease the pain on the poor by offering credits when motorists took public transport. John Quiggin and I pushed that recommendation further last year.

So I am clearly in favour of this idea. But I write this with some nervousness; will it be ruled out by the end of the day? I must say that usage charges for motor use is as close to a no-brainer as you get with environmental policy. How the government responds will be a test of how serious it is in dealing with climate change sooner rather than later.

3 thoughts on “Now, on to cars”

  1. Isn’t the problem with these ideas their complication? Elderly drivers or those who don’t understand the system could get stung.

    I have no opposition to a system with complicated underpinnings that is simple for users to participate in, such as environmental market-based instruments like Bushtender. These are underpinned by complicated environmental science but are simple for land owners to understand and use. But increase the variables in a traffic congestion MBI and it could have usability issues. I’m more in favour of giving people realistic alternatives like effective public transport and bikeways.


  2. what are the additional transactional costs? Tolling points, accounts, etc.Pretty huge.

    How about a simpler system of paying your rego in part based on how many km you’ve done that last year. Make it mostly an honour system, with audits or spot checks, but every time you need a RWC (annually in NSW?) it’s formally recorded. Much simpler.

    Which reminds me – got my water bill last week. $100, of which only $20 was discretionary, fully $80 was fixed charges. What price signals am I getting??


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