AAA laments Budget’s failure to address transport tax reform

Road transport and infrastructure funding will decrease in real terms from 2021-22 to 2024-25 with the end of the $3 billion Road Safety program in sight.

The Australian Automobile Association (AAA) says its analysis of the 2021-22 Budget papers shows the Government is predicting a “decrease of 9.7 percent in real terms” in road transport funding over the next three financial years.

An additional $1 billion has been invested to extend the Road Safety Program, which the AAA has welcomed along with the Government’s other financial commitments to road infrastructure and road safety.

But the peak body has lamented the Government’s “failure” to embark on transport taxation reform to identify how roads will be funded into the future as more people embrace zero and low emission vehicles such as EVs and stop paying fuel excise.

The AAA said its Budget analysis shows the Government plans to collect $13 billion next financial year in net revenue from fuel excise, about $2 billion more than the amount it has budgeted for investment in land transport infrastructure over the same period.

Motorists currently pay 42.7 cents in excise for each litre of fuel.

Last October, the Government committed to investing $7.38 billion throughout 2020-21 on road infrastructure.

The AAA says the Budget shows this target will be surpassed with an investment of $7.77 billion by the end of this financial year and a further $8.2 billion in the year ahead.

The Road Safety Program supports the rollout of life-saving road safety treatments on rural and regional roads and greater protection for vulnerable road users, like cyclists and pedestrians, in urban areas.