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Budget 2016: Infrastructure focus welcomed but funding reform opportunity missed

3.5.2016

While the Government’s continued focus on transport infrastructure spending is welcome, the Australian Automobile Association (AAA) says the Government has missed an opportunity in this Budget to begin reforming long-term transport funding to secure Australia’s future economy.

Analysis of the Budget Papers show that land transport infrastructure spending is projected to peak at $9.5 billion in 2016-17 before declining over the forward estimates to $4 billion in 2019-20.

AAA Chief Executive Michael Bradley said: “An important omission from tonight’s Budget appears to be the establishment of an independent inquiry into infrastructure funding and transport market reform.

“While the AAA is pleased to see the Australian Government increasing transport infrastructure investment to start to address existing needs, we urgently need a more sustainable funding system if we are to build the transport systems that will keep our economy strong.

“Infrastructure Australia’s 15-year Infrastructure Plan released in February finds that by 2031, the cost of congestion across our biggest cities will reach about $53.3 billion.

“Australian motorists pay close to $28 billion in taxes and charges every year, however the allocation of funding into road and public transport infrastructure remains ad hoc, unfair, and lacking in transparency.

“That’s why the AAA continues to call for half of all net fuel excise to be invested directly in a transport infrastructure fund and for an inquiry to be conducted into future transport funding as recommended by Infrastructure Australia.”

Mr Bradley said that in a Budget aimed at providing tax relief it was disappointing to see the Luxury Car Tax and Tariffs on Imported Vehicles have been retained.

“These taxes target the characteristics of safety and fuel efficiency we want to see more of on our roads. These taxes can no longer be justified on the basis of protecting the local car manufacturing industry.

“It’s bad enough these taxes have been retained in this Budget. It’s worse that they are projected to take an extra $360 million from the pockets of Australians in the next year alone.”

Mr Bradley said the AAA remained focused on road safety and would seek more details from the Government on funding for the keys2drive training program.

“Along with a continued commitment to the Blackspot Program, the AAA welcomes the $4 million allocated to keys2drive in the Budget. This is sufficient to keep keys2drive running at its current level for 12 months. However, we note the Government intends to implement alternative funding arrangements for keys2drive beyond 2016-17 and we look forward to working with Minister Chester to demonstrate the benefit delivered by this important program.”

Mr Bradley said the AAA would also continue to seek a Government funding contribution for independent on-road vehicle emissions testing in the wake of revelations that some car manufacturers had falsified emissions and fuel efficiency test results.

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