Paying For The Roads We Drive On
Across the Tasman, there are plenty of people getting annoyed at the increase in large, damaging potholes that have developed over the last few years on NZ’s tarmac road surfaces, even on main State Highways. Over there, for quite some time, EV owners have been getting a free ride on the coattails of motorists using an internal combustion engine (ICE) vehicle and who pay their fair share of road user chargers (RUCs) and/or a large portion of tax levied on the fuel at the pumps for the roading upkeep. This got me thinking about how should we be fairly introducing EVs to the masses while maintaining our roading systems? I realize it’s likely to be a bit contentious, but it’s not a question just for New Zealand’s new government to answer; it is also worth giving a bit time to thought and discussion here in Australia.
In Australia, we pay quite a lot of money into the pool of government funds that is received on yearly vehicle registrations. According to the Australian general insurance provider, GIO, the average cost for a family car is likely to be around $1240 per year. The excise tax (an indirect tax charged by government on the sale of a particular good or service) on the common fuels used in Australia (as of 1 February 2022) is $0.442 per litre. Introducing a direct road user charge as a replacement for fuel excise tax is something that has been bandied about at various high levels of government in Australia. The idea gains extra weight particularly when you consider the seemingly imminent transition from fossil-fuel and the ICE to electric vehicles (EVs).
A transition from ICE vehicles to EVs changes the maths and raises eyebrows for those harbouring the more philosophical questions involving fairness and equality for all socioeconomic groups. Without some form of direct user charge for the EV motorist, they would otherwise make no contribution to the roads’ upkeep.
If, in the future, we do end up going entirely electric, the current $12 billion or so of annual revenue from fuel tax will need to be replaced from some other scheme or source. It seems quite economically sound to simply charge for owning and using cars on a scale according to the number of kilometres driven.
Adding another aspect to your discussion on this topic down at the pub might earn you a free drink, so how about considering the damage caused to roads according to the weight of the vehicle driving over it? A UK report carried out by researchers at the University of Leeds suggested that EVs can damage roads at twice the rate of an equivalent-sized ICE vehicle. According to the data, the average EV adds 2.24 times more wear and tear to roads than an ICE vehicle of similar size. They also think that battery electric vehicles (BEVs) with a mass of over 2000 kg contribute 2.32 times the rate of road deterioration.
So could the fuel excise could be scrapped altogether, and all vehicles should be taxed via a user pays system based on the weight/mass of a vehicle? This sort of deal might actually help lower emissions in the long run because the lighter the car, the more frugal it is, EVs, hybrids, and ICEs all included. The cost of road repairs is also related to the CO2 emissions as well, so the fewer road repairs are required, the lower the emissions emitted – well, in theory anyway. What do you reckon?
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