JOHN MENADUE. Road funding – what is going on.

Jul 14, 2016

Road funding is becoming a mess with quite serious misunderstandings of what is being spent and how much is being wasted. The benefits are of increasing doubt.

In this blog I carried a post by John Austen ‘Road spending incurs billion dollar new debts annually‘. He pointed out that in 2013-14, we spent $5 billion more on roads than was raised in road revenue. He described how the Australian Automobile Association keeps adding into ‘road revenue’ other vehicle related taxation that is really general tax revenue – GST from motorists, fringe benefits tax, luxury car tax and passenger motor vehicle customs duty.

Because road spending exceeds road revenue on a substantial scale, additional road spending is adding to debt. In this blog, Michael Keating and Luke Fraser ‘Infrastructure: improvement or impoverishment?‘ pointed out that:

  • Since 2007-08, revenue from motorists no longer covers road spending.
  • The accumulated stock of debt attributable to roads could be as high as $114 billion by financial year 2023-24.
  • Almost all the major multi billion dollar road projects have escaped serious srutiny.

Wasteful roads expenditure is contributing substantially to our growing debt because road spending is exceeding road revenue.

It is time to pause and examine the mess that road spending is creating. It is out of hand with doubtful benefits to road users and the community.

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