The federal government released the 2018 budget last week and it includes a collection of higher taxes from Australian motorists and a huge decline in road infrastructure spending.
According to Federal Treasury, about $54.4 billion is expected from the government’s collection of fuel excise tax, and another $5.1 billion from luxury car tax. Despite the huge taxes that will be imposed on motorists and luxury car owners, only $22 billion of this amount will go to land transport infrastructure and road safety programs. This will equal to just 32 per cent of total tax revenue, a big drop from last year’s 61 per cent budget.
Road Infrastructures
The Australian Automobile Association (AAA) has expressed its disappointment on its media release right after the 2018 budget was announced. Michael Bradley, AAA Chief Executive, said, “This Budget fails to appropriately reinvest the taxes paid by Australian motorists in the programs so desperately needed to improve safety, affordability, and mobility.” AAA also expressed its concern that the 2018 budget caused the forward estimates for the total transport infrastructure funding to drop by $2 billion compared to last year’s forward estimates.
The association is pushing the federal government to allocate at least 50 per cent of the total fuel excise tax collection to land transport infrastructure projects. “At a time when Australians are paying higher taxes than ever to use the transport network, Australian motorists want to see the Government taking concrete steps to make the transport system safer and more efficient,” Bradley added.
Road Safety
Aside from the lower budget for road infrastructures, many motorists will be sad to hear that the 2018 budget will not fund any effort to re-establish the Federal Office of Road Safety, which can be a major component in addressing the alarming increase in road-related accidents. There is no financial commitment as well to reduce road trauma, which according to AAA (an advocate for Decade of Action for Road Safety: 2011-2020 program of the United Nations), costs $30 billion to Australian economy per year.
The import taxes on luxury cars that is worth $1.3 billion per year means newer vehicles will have higher prices. This will give average families less capability to access cars with advanced technologies in safety and environmentally friendly features.
Road Congestion
On the other hand, it’s good to know that the government is setting aside funds to address road congestion by establishing the Urban Congestion Fund, Major Projects Business Case Fund, and Roads of Strategic Importance Fund.
These funds will finance different projects that include a new airport rail line in Melbourne costing $5 billion, $1.5 billion rail projects in Victoria, and a new freight line to Port Botany worth $300 million. Other projects that will be funded are the Ellenbrook train line in Western Australia and the Perth Metronet.
Motorists all over Australia will be pleased with new alternative routes on the way to work or home to decrease travel time and improve productivity.
Once it’s implemented, will the effect of the 2018 budget be good or bad? We’ll have to wait and see. As motorists, however, we should always remain vigilant about the safety of our families, no matter what the road conditions might be.