John Menadue. Our love affair with cars.

Jan 3, 2015

We are infatuated by the convenience of our cars, particularly at holiday time.

There are clearly major economic and social benefits but the costs both economic and social are going to become much more apparent. How can we continue to realise the benefits of car travel, but minimise future costs.

There are enormous political problems in addressing the cost of traffic accidents, traffic congestion and carbon pollution from cars, but we need to start thinking seriously about a suite of options to minimise the damage that cars will continue to inflict on our economy and society. It is not only a political problem in terms of disruption of our lifestyles but the political problem is intensified because of the power of the automobile lobby and the large construction firms who want to keep building more and more freeways and tollways.

I posted two earlier blogs on this subject. They were ‘Increasing the petrol tax is good policy’ on 9 May 2014 which included an earlier post, ‘Cars are killing our cities’.

Some people suggest that public transport is the answer to the damage caused by car accidents, car congestion and pollution. But it is only part of the answer. Cities like London and Paris have very good public transport systems, but they still have problems of car congestion, accidents and pollution.

The fact is we need to curb our use of cars.

In 2013 a report by eight of the nation’s transport, health and planning organisations estimated that congestion on our roads is costing Australia about $10 billion p.a. This is projected to increase to $20 billion by 2020.

The Bureau of Transport and Regional Economics estimated the cost of road accidents at $17.85 billion in 2006. When the cost of loss of life is included, the total cost of road crashes increased to $28 billion in 2006. There are reservations about these estimates, but they are the best that are available. Almost all commentators believe that the cost of road accidents is conservative and in any event the data is eight years old.

According to the Australian Government Department of the Environment, ‘transport’ contributed 17% of our greenhouse emissions in 2013-14. The highest contribution of greenhouse gasses was ‘electricity’ which contributed 33% of greenhouse emissions.  Clearly greenhouse emissions from transport are a serious problem.

We need to consider seriously a range of measures to maximise the benefits of car travel and to minimise the cost.

We invariably complain about the cost of petrol, but we pay some of the lowest petrol prices in the OECD and petrol prices in Australia today are the lowest for four years. In the September quarter this year only Canada, Mexico and the US amongst OECD countries paid less for petrol than we did. The tax component of our petrol prices was the fourth lowest in the OECD. For these and other reasons, I support the government’s reintroduction of the indexation of petrol taxes which John Howard abandoned in 2001. Reintroduction of the indexation of fuel excise would be useful transport policy to discourage car use as well as making a small contribution to the budget.

The Henry Tax Review recommended a traffic congestion tax. Well implemented, a congestion tax would encourage more rational use of our roads. We would have an incentive to travel outside peak congestion periods. It would provide an incentive for employers and for schools to move to more flexible work and school hours. London and Singapore have taken action on traffic congestion with clear public support.

Just as the sensible carbon tax was designed to impose a charge on companies that pollute so motorists should pay a tax when they choose to travel in peak hours. Such a tax would have to be a state tax. Who is game!

We need to consider increased sale taxes and registration fees. In almost every respect these imposts in Australia are much lower than in the rest of the world. In Denmark the sales tax on cars is 143%, in Finland 53%, the Netherlands 48% and Sweden 30%. In Australia it is 10%.

A feature of many European countries is smaller cars, not the large SUVs that are so common in Australia. A Toyota Hilux emits double the carbon dioxide of a Toyota Carola. In addition to the high levels of pollution from large vehicles they obviously occupy more road and parking space. A useful approach would be to increase the sales tax and registration fees of these larger vehicles and reduce the fees for smaller vehicles with a neutral financial result for the government. Higher fuel excise would also discourage car use.

We also need to tighten emission standards for all our vehicles. The Climate Change Authority says that the new tougher emission standards to operate from 2018 are one of the best and least costly options available to reduce carbon emissions from cars. In doing so we would bring Australian emissions into line with international standards.

We also need to ensure that in future there is effective integration of transport and urban development policies. So often urban planning is deficient where there is no convenient or efficient means of transport except by car.

These issues will involve hard political decisions. We cannot put off indefinitely addressing the problems of car use.

In the short term we should be very cautious about repeated proposals from federal and state governments for more and more ‘freeways’ that only shift the bottleneck and line the pockets of construction and finance companies..

We do need improved public transport and many major cities of the world show that that is possible. But we can’t avoid facing up to our own infatuation with cars. We are all guilty of helping to kill our cities.


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