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Road User Charging - Government Run Scheme Yes. Privatised No.

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Sam Hibbins MP
Member for Prahran
23 November 2020

The more I look into the Victorian Labor government's Electric Vehicles tax, the more it becomes apparent that it is a first step toward allowing a future road user charge scheme to be privatised, undermining the benefits of such a scheme whilst profiting Transurban or some other profit-hungry corporation.

The tax is bringing in such a trifling amount of revenue, it's so clearly out of step with the need to make electric vehicles cheaper, and the arguments for it are so blatantly contrived.

Firstly, let’s look at where this proposal came from. The champion for putting an extra tax on EV’s is from Infrastructure Partnerships Australia, a pro-privatisation ‘think tank’ representing Transurban and road builders. They were quick out the door to support the move and have previously published their own report supporting an EV tax:

Their arguments range from the questionable to the absurd. Of note is their strident opposition to a congestion levy, an actually effective first step towards road user pricing that, interestingly enough, would take cars off the road during peak hour and reduce the need for building more roads.

They make the extraordinary statement that: A congestion charge does little to counter the most pressing challenge for the future of Australia’s transport networks – the imminent sharp decline in fuel excise caused by the arrival of electric vehicles. Apart from being factually wrong, the most pressing challenge is fuel excise….really? Not congestion, not population growth, not growing transport emissions, not air pollution or increasing infrastructure costs?

Secondly, we know Transurban is absolutely gunning to get its hands on road user charging rights and want "to be viewed as the "natural custodian" of the nation's motorways, in the likely event of motorists being charged to drive on them".

Thirdly, we also know the Victorian Labor government is completely addicted to privatisation and selling off public assets. Anything that Jeff Kennett didn’t privatise in the 90’s, Andrews is selling off now. The Port of Melbourne, Land Titles office, Public Housing estates. There are more PPP’s than ever before extending now into the building and ongoing maintenance of schools, hospitals and arterial roads. The auditor-general slammed their sweetheart deal with Transurban to get the West Gate tunnel built.

Next on their hit list is the Licensing and Registration functions of VicRoads. The Treasurer has stated that VicRoads will manage the EV Tax. A fair question to ask is will this function be bundled in with the VicRoads' privatisation to fatten it up for sale?


So what would a privatised road user charge mean for Victoria.

Well, it would mean the government will get themselves a big, fat lump sum upfront from the private operator to pay off debt or fund another project, whilst Transurban would manage the system, provide the technology and get a steady stream of income from the public of which it can cream the profit off the top.

Of course we will all marvel the big upfront payment, but the public revenue pouring into Transurban's well, and above what they paid and what it costs to run the system, will go to Transurban's profits, not back into public services.

But most insidiously, it will put the control of one the most important transport reforms into private hands and away from the public good.

Road user pricing has the potential to be the massive game changer when it comes to transport in Australia. It will be a way of managing demand on our roads, reducing traffic, particularly during peak hours, improving travel times, reducing the need for expensive projects and have massive benefits for the climate, air pollution and even land use. It’s why the likes of Infrastructure Victoria are pushing it so hard.

And that’s exactly why the likes of Transurban want to get their hands on it. A privatised scheme would involve a water-tight contract that will be about protecting private profits, not about the public good of reducing the number of cars on our roads.

Further, it's also clear why the IPA, Transurban and road builders are so obsessed with transport revenue from cars and continually link it to roads expenditure despite the fact it goes into general revenue (Australia’s most pressing transport issue!). A publicly run road user pricing scheme would smash their business model and they don’t want the gravy train to end. They want a never-ending hamster wheel of more cars on roads to raise more revenue to funnel into their own profits and more mega projects, and more ribbon cutting opportunities for politicians.

No doubt they see the writing on the wall with the massive reduction in the need for toll-ways that road user charging and automated vehicles bring, and want in on the action before existing revenue streams dry up. 

Victoria, it’s time we had a debate on our state’s economic ideology.

We haven’t had one since the early mid 90’s when the Liberals brought in their neo-liberal reforms. Since then, Labor has largely continued their economic policies ( and have gone even deeper into the privatisation of public assets.

Is anyone in doubt that the government’s strategy to manage our increased public debt will be to sell off even more public assets? It’s easy to see how a government trapped in this ideology would get dollar signs in their eyes when it comes to privatising a future road user pricing scheme.

With more and more assets in private hands, the profit motive is usurping the public good. The lack of ongoing revenue and dividends will leave us vulnerable to public sector austerity and even more privatisation.

All this, when we should be heading in the opposite direction. Victoria, we need to turn the page on neo-liberalism that has dominated our economy since the early 90’s.

We need to get the full benefits from our public assets and use them to achieve social, economic and environmental justice. We need to start a positive cycle of building up our public assets, using the revenue gained for re-investment, and for spending on housing, health, education and social services.

We need to retain public ownership of natural monopolies, like the future road pricing scheme.

And we can start by not supporting a blatantly anti-environment sop to the privatisation lobby, like putting a tax on Victoria’s electric vehicles. 

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Sam Hibbins MP
Member for Prahran
23 November 2020




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