Opinion: Sure, we can axe the fuel excise ... and do this instead | Jess_Irvine
Roll up, roll up your sleeves and fasten your high-vis safety vests: we’re about to hit peak hard-hat season.
Truth is, fuel excise is already fading away as a viable source of ongoing revenue. More fuel-efficient cars, along with the rise of electric vehicles, means excise revenue is already shrinking as a share of total revenue and will continue to do so in coming decades. That’s not how we do things now, of course. Presently, road users – let’s just call them drivers – fork out multiple payments to various levels of government for using roads. There’s the largely invisible fuel excise, of course, presently worth about 44 cents per litre. Then there are fees paid to state governments for vehicle registration and licenses. When you buy a car, you’ll also pay stamp duty on your purchase.
Putting a clear price signal on road usage not only raises revenue, it also gives people the clear incentive to avoid high-charge times of day, thus reducing rush hour congestion. Despite concerns such congestion charges would hit lower-income, outer-suburban commuters the hardest, a report by the Grattan Institute in 2019 found congestion charges are actually progressive in nature: “Drivers to the CBD are overwhelmingly higher-income and tend to live in the middle or inner suburbs.”
We could then also make sure that any revenue raised goes directly to fund road maintenance and upgrades.
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