Oz Group Denounces Plan to Use Tracking Devices to Tax Motorists

A proposal in Australia to install tracking devices in vehicles in order for governments to charge taxes based on distances traveled is under attack by the Victoria Automotive Chamber of Commerce.

VACC Executive Director David Purchase calls it a ridiculous idea.

“There have been some crazy road traffic proposals over the years, but this one tops the lot,” he says in a statement. “This is yet another attack on the motorist. Why does the government think it right to victimize the very people who make this country tick?

“Motorists are not irresponsible, gas-guzzling, eco-vandals,” Purchase adds. “Motorists are people commuting to work, delivering and collecting vital goods and services, parents taking the kids to school or visiting elderly relatives.”

The outcry comes after Treasury Secretary Ken Henry released a report not only recommending the tracking device, but also proposing truck drivers be charged a higher rate to reflect the wear-and-tear on roads caused by heavy-commercial vehicles.

“To say the device would be secured and sealed inside the vehicle is just naive,” Purchase says. “Australians are a resourceful lot, and it would not be long before people found a way to manipulate and reset the device.

“This proposal for tracking devices is completely off-track as far as we are concerned,” he adds.

Australia’s fuel-excise scheme now has a tax of A$0.38 cents a liter ($1.21 a gallon). Other charges include the 10% Goods and Services Tax on the sale of the vehicle, tariffs on many imported vehicles, taxes on insurance, stamp duty on motor vehicles and license and registration fees.

The report suggests if plug-in hybrid cars become more popular, electricity used for transportation also may be taxed.

LaTrobe University professor Henry Clarke, one of the paper’s authors, tells the Australian Broadcasting Corp. the aim is “to try to get to the point where we’re charging people for the actual damage and costs of using roads, rather than fixed charges that are independent of the way they use roads.

“The technology exists now; telemetric devices, or essentially boxes that are inserted in vehicles,” he says. “These can provide information for commercial-trucking fleet operation, or they can provide information to regulators.”

Clarke says there is no reason to be concerned about a possible invasion of privacy.

“That information would only accrue to the device and the user of the device would possess the information, but essentially the government would be able to work out the charges that were associated with different types of use of roads,” he says.

The report says traffic congestion impacts all Australian capital cities, but is most pronounced in Sydney and Melbourne and will increase over the next 20 years unless addressed with policy measures.

“In the absence of pricing, Sydney’s traffic will grow 47% and Melbourne’s by 40%,” the report says. “Supply-oriented management of congestion will become increasingly infeasible, so it makes sense to consider demand-oriented, user charges.

“A charge levied on distance, alone, will be more effective than an increased excise on fuels since the primary behavioral response to it involves less driving.”

The report suggests “social costs,” such as pollution, congestion, road damage and traffic accidents, would be internalized by levying a specific charge on that aspect of travel that creates these costs.

“This charge might depend on the identity of the driver, the type and mass of the vehicle driven and on both when and where the travel occurs,” it says.

The report does offer some motorists a ray of hope, recommending the luxury-car tax on vehicles with a retail price greater than A$57,180 ($48,157) be repealed.

“It does not address a market failure but rather creates efficiency losses,” it says of the tax. “The revenue raised is small and the efficiency losses relatively substantial. The limited evidence available suggests the higher threshold on energy-efficient luxury cars is unlikely to have substantial effects on the types of luxury car purchased.”

The luxury-car tax of 33% is on the difference between the threshold and the GST-exclusive value of the luxury car. There is a higher threshold of A$75,000 ($63,156) for cars with a fuel consumption of at least 33 mpg (7 L/100 km).

“Raising the threshold on energy-efficient cars is unlikely to alter behavior,” the report notes. Almost 60,000 cars were subject to the tax in 2007 and owners paid A$464 million ($384 million).

The report also recommends the 10% tariff on many vehicle imports be repealed.

“Academics hand-picked by Treasury Secretary Ken Henry have put forward the idea the tax on fuel bought by the average motorist should go up by A$0.10 a liter ($0.38 a gallon), with extra costs imposed on trucks,” Opposition transport spokesman Warren Truss says in a statement.

“What these city-based pointy heads have forgotten is people living in regional Australia have to drive further each day to go to work, take their kids to school or go to the doctor, compared (with) their city cousins. In most cases, there is no public-transport network to fall back on. Why should country people pay more to drive on dirt roads?

“The idea of every vehicle in Australia carrying a government-monitored tracking device to track when and where they are traveling causes very deep concern,” Truss adds. “(Prime Minster) Kevin Rudd as Big Brother is a frightening thought.”