Regional household transport costs measured for the first time
For the first time the transport pressures faced by regional Australian families will be tracked, as the nation’s peak motoring body, the Australian Automobile Association (AAA) includes key regional centres in its Transport Affordability Index.
Since its launch in August 2016, the Index has become an important tool for policy makers, media and members of the public wishing to understand the transport costs borne by Australian households. The AAA has improved the Index so that in addition to tracking the movements in transport costs in Australia’s capital cities, it will also track the costs faced by Australians living in the key regional centres of:
- Wagga Wagga
- Mount Gambier
- Alice Springs
The Index for the June 2017 quarter finds the average Australian metropolitan household is spending $17,294 on transport. This accounts for 13.4 per cent of household income, down from 13.6 per cent in the previous quarter.
By comparison, regional Australian households on average spend $13,863, or 11.7 per cent of household income.
Sydney was the only capital city in which costs continued to rise, with the average household now spending $22,268 per year on transport (up from $22,223 in the previous quarter). Hobart families saw their transport costs fall from $14,838 to $14,781.
The overall reduction in average costs in capital cities was driven by decreased new car costs linked to end of financial year sales and lower interest rates, decreases in registration and CTP costs in New South Wales and Queensland, and a decrease in fuel costs for all cities except Hobart. These decreases were partially offset by increases in insurance, car servicing and toll costs.
Of the regional centres, households in Geelong paid the most for land transport at $14,430 per annum whilst those in Wagga Wagga paid the least at $13,258.
The Index assumes that the regional household:
- on average, travels further than the city household;
- pays more for petrol than the city household by up to 12 cents a litre in some locations;
- on average, earns almost $200 per week less than their city counterparts;
- pays less for registration and insurance due to lower premiums; and
- doesn’t pay for public transport and tolls due low or no availability in regional areas.
The Index demonstrates that transport is a significant and largely unavoidable cost to households and that these cost pressures must be considered by governments at all levels when formulating policy.