The transport sector is the second-largest source of greenhouse emissions in Australia. Despite this Australia has no vehicle emissions standards and some of the lowest fuel taxes in the OECD. Australia still subsidises diesel fuel usage by $7.8 billion per annum.  

Australia’s current transport system is highly dependent on the continued importation of fossil fuels and imported vehicles. Any significant disruption to that supply would threaten the production and delivery of all products including essential supplies of food. 

Road fatalities remain a leading cause of accidental death with over 1,100 Australians killed in 2020. 

One hundred and twenty years after federation driver’s license and vehicle registration taxation remain fragmented across Australia. Unifying these systems at the federal level would benefit all Australians. Both of these taxes are flat and should be replaced by taxes on actual vehicle usage. 

Photo by Daniel Abadia on Unsplash

Our plan

  1. Rail not road – invest much more in passenger and freight rail systems
  2. More public transport – Public transit systems, bike paths, dedicated transit lanes, electric buses, elevated trains and trams 
  3. Fast inter-city trains – Short high-volume inter-city fast rail links such as Melbourne-Geelong or Sydney-Newcastle
  4. Electric vehicles – Align Australia’s vehicle emission standards with Europe to drive the transformation to electric transport 
  5. Electric aircraft – Support and encourage electric-hybrid aircraft 
  6. Improve fuel security – Boost Australia’s reserves, consider bio-fuel and synthetic fuels 
  7. Vehicle safety and efficiency
  8. A backing the bike strategy
  9. Shipping and keeping our ports
  10. Usage charges to replace flat licenses and registration
    • Free Australian licenses!
    • Free Australian vehicle registration!
  11. Third party insurance simplified
Shinkhansen transit system Japan
Clockwise from top left: Heart Aerospace electric regional airliner, Kitakyushu Hitachi and Shinkhansen transit system Japan, Rivian electric ute camper with kitchen (watch it on YouTube)

The 2021 budget included over $15 billion for transport but almost all is spent on roads. Most federal funding should go towards rail for the next term of office to make up for decades of neglect of the rail network. 

A two-track railway costs around one-third as much as a six-lane freeway, but can carry more than three times as many passengers. Trains cost less, use less space, produce little pollution and less noise.  

Rail freight generates 16 times less carbon pollution than road freight per tonne kilometre travelled, making it the clear choice to reduce emissions. 

Road accident costs are 20 times higher than rail for every tonne kilometre moved. 

Rail projects needed are: 

  • Standardisation of rail track across Australia, starting with roll-out of gauge-convertible concrete sleepers that allow rapid conversion of the track to Standard Gauge once all the sleepers are in place. Gauge standardisation is critical to allow freight to move across Australia unimpeded by “break of gauge” issues.  
  • Duplication of single-line tracks where feasible and necessary. 
  • Upgrading of train control systems. 
  • Upgrading of inland rail ports to allow rapid movement of freight between trains and trucks. 
  • More public transit, less new motorways

 

Cars are the least efficient way of moving people around a city. Federal funding should be spent on public transit systems and bike paths instead.

Buses and trams use far less space to move many more people. Federal funding for projects leading to more frequent services on dedicated transit lanes, electric buses, dedicated easements and clock-face timetabling will take bus transport to the next level. 

Federal funding should be provided to local and state governments for major bike and shared path projects. 

At least 5% of transport spending should be assigned to active transport such as bike and foot paths.

We are in favour of adopting the five proposed policy initiatives from Bicycle Network.

Initially, fast rail should be introduced for short high-volume inter-city links such as Melbourne-Geelong or Sydney-Newcastle.  However, the technology chosen should be suitable for the ~900km from Melbourne to Sydney or from Sydney to Brisbane. Given it would need to take about 2 hours to be competitive with flying, operating speeds of around 450 km/h are needed. 

Existing conventional tracks cannot be used for any type of fast rail as fast rail speeds are too high for existing track alignments. Given that a new track is needed new faster technologies should be used. 

Currently, there are two types of fast train technology that allow operating speeds above 400 km/h. Both use maglev technology to provide non-contact guidance and propulsion to the train. These are: 

  • The Transrapid Maglev – This has operated commercially in Shanghai since 2004 at speeds of up to 430 km/h although 500 km/h is possible. Carriages are 3.7 m wide allowing 5 business class seats in a row. Up to 10 carriages can be used in one train. 
  • The Japan Railway Superconducting Maglev – In 2015 set a speed record of 600 km/h although the limit for passing other trains is 500 km/h. Carriages are 2.9 m wide allowing 3 business class seats in a row. This system will commence commercial operation in 2027. Note that CLARA is proposing this technology for a Melbourne-Sydney link. 

According to this Grattan Institute report, for Australia to have a good chance of reaching net-zero emissions by 2050, we must remove 5 million tonnes of emissions from the transport sector every year from 2030 to 2050.  

To do this Australia should: 

  • Ban the sale of new fossil-fuelled passenger cars and utes from 2035, in line with the UK and EU, noting that by ~2026 EVs will be cheaper to buy as battery costs decrease and production lines shift to EVs 
  • Move import taxes from EVs to the most inefficient vehicles 
  • Allow only new electric vehicles to qualify for the typical company car tax benefits from 2023. 
  • Require all regular passenger vehicles purchased by the government to be electric. 
  • Work with the states to reform all light vehicle taxes and charges so they are nationally consistent, simplified and assist in the goal of driving down emissions. 
  • Provide incentives to ensure widespread availability of standard electric vehicle chargers.  
  • All carparks (including curb-side parking) to have a specified proportion of the parking bays with chargers. 
  • All public chargers should be Level 2 or higher to ensure reasonable charging times. 

The report of the Senate Inquiry into electric vehicles, shows that if electric vehicles made up 57 per cent of new car sales by 2030 there could be an increase in real GDP of $2.9 billion, an increase in net employment of 13,400 jobs, and an additional investment of $3.2 billion in charging infrastructure.  

The slow uptake of EVs means public charging stations are largely uneconomic and unlikely to be for some time despite government grant schemes that subsidise infrastructure.  

Planning is ad hoc, availability of chargers is very limited, especially in regions, and infrastructure is not standardised. Electrification will require short, medium and long-term planning, systems and incentives for load spreading.  

Three states have or plan to introduce various taxes on EV’s.  Inconsistent State-based EV taxes using logbooks and similar should be strongly discouraged. 

Government interest in so-called low-emissions hydrogen vehicles is misplaced because: 

  • Almost all hydrogen to date is produced using fossil fuels 
  • Hydrogen is not an energy source, it is an energy carrier. This means it needs to be generated, compressed or liquefied, transported and converted back into useful energy – and each step of the process incurs a substantial energy loss. Just 15-30% of the available energy in the fuels is used for actual driving. Battery electric vehicles, use 70-90% of the available energy. 

Hydrogen may be useful for heavy vehicles and fleet operators because of the benefits of long-range and shorter refueling times but battery swapping may overcome these issues. 

A range of companies has built prototype electric or electric – hybrid passenger aircraft.  Initially these could well replace conventional aircraft for short-haul regional routes. The Government should support and encourage this development to improve our fuel security and reduce emissions. 

In 2018 Australia had about 3 weeks of liquid fuel. That’s about 20 days of petrol and aviation fuel and 12 to 17 days of diesel. This is in contravention of Australia’s obligation as a member of the International Energy Agency to hold at least 90 days of supply. 

This is a critical vulnerability for Australia. A foreign power with a few submarines could easily stop all fuel deliveries and bring the country to its knees. Notwithstanding the move to electric passenger vehicles and freight rail, Australia will be dependent on diesel for most heavy transport vehicles for the some time. Synthetic fuel projects for diesel and aviation fuel should be explored. 

Research is needed to determine the best way to boost Australia’s reserves, especially for diesel and aviation fuel. Whatever storage is used, it needs to be widely distributed to reduce the risk of an accidental or deliberate destruction of the reserve. 

See also our Self-Reliant, Self Defence platform. 

Australian vehicle and fuel standards should match the highest standards set in other leading countries – Euro 6 and now 7 – but currently, Australia has no emissions standards and our diesel has 15 times as much sulphur and more aromatics such as benzene than any other OECD nation.  Without better quality petrol and diesel, many vehicles with high safety and emission standards cannot be used in Australia. 

Now that all vehicles and most of Australia’s refined fuel products are directly imported, there should be no barrier to cleaner fuel standards and manufacturers would have few problems complying with it. 

This would save consumers money, reduce our dependence on imported oil and reduce greenhouse emissions. 

Several new technologies are not yet mandatory on new Australian cars – but they should be. Here are several possibilities for improving safety that need investigation: 
 

  • Intelligent Speed Assist – ISA reads speed signs and limits the engine from producing more power if the vehicle is over the speed limit. Drivers can override this but alarms will sound. ISA is being introduced in Europe from 2022. 
     
  • Forward Collision Avoidance Technology – FCAT uses sensors on the car to detect and avoid obstacles and automatically apply the brakes if needed. It is also used for adaptive cruise control. An example is Subaru “eyeSight” which has been fitted to almost all their vehicles for years and comes with a range of other safety features. Many moderately priced vehicles now have equivalent technology. (This is also called Autonomous Emergency Braking or AEB) 
  • Minimum ANCAP Safety Ratings – The ANCAP rating should be four star or higher. Currently that would prevent a handful of vehicles from being sold until they were upgraded.  

All of Australia’s air and seaports that are suitable for handling international aircraft or ships should be kept in government hands and not leased out for excessive periods. 

Australia should impose a speed limit on commercial shipping to cut fuel usage in Australian waters and perhaps for freight departing or bound for Australia. Other options to reduce shipping emissions should be explored. 

Shifting from a flat fee for road access to some charge based on usage has long been proposed by bodies such as The Grattan Institute, The Productivity Commission, Delloittes, Infrastructure Victoria and Infrastructure Australia. 

Many have argued for road user charging using electronic tolls or in-vehicle monitoring but we judge this as being too complex to implement – especially federally. 

Our proposal is to replace the revenue from various flat vehicle related charges with a slightly higher fuel excise charge and later a small electricity tax when EV’s become more prevalent. With only 0.7% of new vehicles being electric we do not need to be concerned with running out of fuel excise in the short term.  

This usage charge would replace the lump-sum: 

  • Driver’s licence fees 
  • State vehicle registration taxes 
  • State compulsory injury insurance tax (a federal scheme leveraging Medicare and social security would replace these schemes) 
  • GST on the above 

In Victoria this amounts to a flat annual charge of about $800. Overall, the tax change would be revenue-neutral but vehicle owners would pay less overall as the common national scheme would be cheaper to administer than separate schemes for each State.  All revenue would flow back to participating State governments. 

The average Victorian motorists could expect to pay about $2.28 per day instead of the flat lump sum charges under this new scheme. The less you drive the less you would pay. 

Currently, the States have the constitutional right to issue driver’s licences, tax vehicle registration, arrange third-party insurance schemes and charge whatever they like for them. 

Detailed consultation would be needed with the States and other interested parties to ensure that all aspects of the current State-based systems were adequately addressed in the new Federal schemes and to get most of the States “on board” with this change. 

Ideally most States could be persuaded that harmonized national laws in this area were in the national interest. 

We note that if federal legislation introduced a free Australian driver’s licences and vehicle registration paid for with a fuel excise paid by all Australians it would be very hard politically for a particular State government to persist with its own “extra” fees.  

This would particularly be the case if no revenue from the new scheme flowed back to non-participating States. 

License fees

Every State has a different driver’s licence scheme with a wide array of rules. The table below suggests that the bottom-line cost per annum is not that different between the major States. The average annual fee equates to about 10 cents per day. 

State Approx. Licence Fee/year* 
ACT $38 
NSW $31 
SA $47 
TAS $33 
QLD $36 
VIC $28 
WA $30 
Average $35 

(* For light vehicles, the cheapest non-concession rate is used. Average NOT adjusted for State populations. 2020 data.) 

Replacing the various State government registration schemes with a common Australian vehicle registration scheme would be of great benefit to most Australian vehicle owners. 

Each State has a wide array of registration and third-party insurance charges and schemes which we will not cover here. A national scheme would harmonize all these without losing useful regional rules such as those governing road trains, farm equipment or trams. 

All existing number plates would stay the same. New vehicles would get national plates. 

A significant part of the vehicle “rego” charge that the motorist must pay goes towards compulsory third-party insurance cover. Again, each State has its own unique system creating complex and expensive legal problems along State borders and between vehicle owners, insurers and plaintiffs when they are in multiple States. 

We propose existing schemes be replaced as follows: 

  • In general a no-fault scheme – This avoids excess litigation. Reduced benefits would be appropriate where a claimant had been found guilty of certain offences which led directly to the accident (alcohol, drugs, extreme dangerous driving, committing a felony, etc.) 
  • Loss of earnings – 80% of pre-accident declared taxable income as a no-fault benefits paid by Centerlink (Services Australia) 
  • Reasonable medical expenses – paid in full by Medicare. 
  • Benefits to be paid for a period determined by the type of injury and the claimants per-accident health conditions with appropriate recourse to a benefits appeals board or similar. 

Needless to say, there is great complexity in this area that means it would take a year or more to design an initial scheme.  

A key feature should be that the duration of benefits should be determined within days or weeks of the accident so that the claimant can focus on recovery instead of focusing on being injured for a multi-year legal battle to get a payout. 

References

  1. Aurizon Rail – Rail vs. road freight calculator. 
  2. Democrats – 2021 budget comments  
  3. Going off-road: Policy shift needed to get freight on rail (Rail Page) 
  4. Australian Railway Association 
  5. Consolidated Land and Rail Australia Pty Ltd (CLARA)  
  6. Australia’s fuel stockpile is perilously low, and it may be too late for a refill (The Conversation, 2018) 
  7. Australian taxpayers could save $7.8bn a year if diesel fuel rebates scheme was wound back (The Guardian, May 2021) 
  8. PTUA – Myth: Freeways are cheap, and public transport expensive. 
  9. ‘Woefully dirty’: government accused over Australia’s failure to cut vehicle emissions (Guardian, 2019) 
  10. Electric vehicle taxes not needed to offset falling fuel excise revenue (The Age, June 2021) 
  11. Federal Chamber of Automotive Industries – Road User Charging (May 2021) 
  12. Liquid fuel security: a quick guide–May 2020 update (APH, May 2020) 
  13. Early days for Australian synthetic fuels (9 Finance, 2011) 
  14. Bio-aviation Fuel: A Comprehensive Review and Analysis of the Supply Chain Components (Frontiers in energy research, July 2020) 
  15. Parliamentary select committee into Electric Vehicles (APH, 2017) 
  16. The electric car revolution putting Australia and the rest of the world to shame (The Age, October 2022) 
  17. Hydrogen cars won’t overtake electric vehicles because they’re hampered by the laws of science (The Conversation, June 2020) 
  18. Melbourne Suburban Rail Loop is not good value for money (The Age, Oct 2021) 

 

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