Saturday, July 04, 2009

You want to charge us for driving?

As new tax breaks for small business push sales of cars, buses, trucks and utes toward an all-time high the Australian Treasury has begun thinking out loud about more-widespread congestion charges including the use of number plates and GPS devices as an alternative to tags.

In a paper released this morning which the Treasury stresses does not represent its official view, economist Paul Hubbard commends Sydney's experiment with time-of-day pricing levels for the Harbour Bridge and Tunnel and says it could go further.

Noting that Sydney's E-Toll system is only one of a number of possible methods of charing for road use it points to an automatic number plate recognition system used in London in which a network of 340 high definition cameras read number plates and generate bills for weekday travel within the city between 7.00 am and 6.00 pm.

It says even better is a global position satellite system being trialled in Seattle in which GPS tolling devices are placed within cars, monitoring driving behaviour and deducting money from accounts in real time...

In the trial drivers are given a "travel budget" and information on tolls as they approach crowded roads.

Motorists who changed their behaviour to avoid travelling at congested times "were able to cash-out their initial entitlement, and thereby receive a benefit from their private contribution to reducing congestion".

The paper says GPS devices would allow the monitoring on congestion "across the entire road network, potentially alleviating the problems of vehicles shifting to unpriced roads to evade tolls."

It says the avoidable social costs of congestion on Australian roads are set to soar from $9 billion in 2005 to more than $20 billion by 2020 and commends the Seattle GPS technology as "mature and reliable".

New vehicle sales defied the economic gloom to climb above 100,000 in June for only the forth time in history, spurred by a generous tax deduction of 50 per cent offered to small businesses in the May Budget.

"The surge is directly attributable to the tax break," said Federal Chamber of Automotive Industries chief executive Andrew McKellar.

"Business purchases are up 12 per cent on a year ago, business purchases of utes, vans and light trucks are up 27 per cent. As a result of the Budget we've probably sold an extra 10,000 vehicles over 3 months."

Toyota cemented its position as Australia's most popular brand, accounting for 21,400 of the 102,846 vehicles sold, about as much as Holden and Ford combined.

The 50 per cent tax break is due to expire in December, raising the possibility that the boost in sales will be short-lived. Asked yesterday what would happen beyond December, Small Business Minister Craig Emerson said he did not "have a crystal ball".

In further encouraging news the Australian Industry Group/Commonwealth Bank Performance of Services Index moved from negative to positive territory in June on the back of a return to growth in sales and orders.

Commonwealth Bank economist John Peters said the result was consistent with other news "suggesting the economy well sidestep a severe recession in 2009 despite the negative headwinds from the global econoic meltdown".

Published in today's SMH