1 / 24

AUSTRALIAN PERSPECTIVE OF TRANSPORTATION and TAXATION : A Relationship but no Marriage

AUSTRALIAN PERSPECTIVE OF TRANSPORTATION and TAXATION : A Relationship but no Marriage. PRAFULA PEARCE, LECTURER, SCHOOL OF BUSINESS LAW & TAXATION, CURTIN UNIVERSITY. INTRODUCTION. Is there a relationship between transportation and tax policy in Australia

eve-howell
Download Presentation

AUSTRALIAN PERSPECTIVE OF TRANSPORTATION and TAXATION : A Relationship but no Marriage

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. AUSTRALIAN PERSPECTIVE OF TRANSPORTATION and TAXATION:A Relationship but no Marriage PRAFULA PEARCE, LECTURER, SCHOOL OF BUSINESS LAW & TAXATION, CURTIN UNIVERSITY

  2. INTRODUCTION • Is there a relationship between transportation and tax policy in Australia • Is a change in tax policy required to promote the use of more fuel efficient vehicles and reduce its use?

  3. OUTLINE • Liquid fuel problem • Australian transport policy and growth of private vehicles • Australian tax policy and its influence on transportation choices • Tax policy change • Proposed Luxury Energy Tax

  4. LIQUID FUEL PROBLEMOIL RESERVES REPORTED FROM SELECTED AGENCIES Source: Owen, Inderwildi & King (2010) ABARE: World – 42 years of proven oil reserves Australia: 10 years of crude oil; 31 years of condensate and 20 years of LPG

  5. AUSTRALIAN TRANSPORT POLICY • Transportation falls within the jurisdiction of States. • Feb 2008: Australian transport Council Ministers – National transport policy framework. • Objectives: Promote efficient and sustainable movement of people and goods; minimise emissions and consumption of resources and energy

  6. REGISTERED CARS AND STATION WAGONS

  7. TRAVEL TO WORK OR STUDY

  8. CARS: POWER AND WEIGHT

  9. AUSTRALIAN TAX POLICY

  10. AUSTRALIAN TAX REVENUES 2009/10 Australia’s future tax system: Final Report: Overview

  11. CALTAX PETROL PRICE AT 12 JUNE 2009

  12. IMPACT OF CURRENT TAXES ON FUEL CONSUMPTION BY MOTORISTS • PRRT and Crude oil excise: Tax on profits – no impact on motorists • Fuel Excise: Inelastic – use declines1.5% with 10% increase in fuel price. • FBT: Statutory formula imposes less tax with more driving • LCT: Tax based on cost of car, not consumption of fuel

  13. HENRY REVIEW RECOMMENDATIONS • Abolish LCT • Replace vehicle registration tax with road user charge • Introduce congestion tax • Recommendations will promote national transportation policy.

  14. TAX POLICY CHANGE-other countries • UK and Ireland: Car purchase taxes based on CO2 emissions • Netherlands: Introduced charge per km driven tax starting in 2012 starting at 3 Euro per km. Use GPS device. • Oregon: Process of developing road user fee. Task Force in 2001 recommended road user fee and congestion charge using fuel pump station to collect the charge using vehicle detection device and central reader.

  15. LUXURY ENERGY TAX (LET) • My recommendation: Introduce Luxury Energy Tax imposed on purchase and use based on power and weight of vehicle. • It has the potential to include road user charge and congestion tax. • Will bring about education that energy is a luxury. • It has potential to change motor manufacturer and buyer’s habits to seek lower power to weight vehicles.

  16. PRINCIPLES OF LET • LET charged to registered owner of vehicle at 4 levels: - Initial purchase - Annual registration - Fuelling - Maintenance and insurance • Vehicles attract points based on: Weight; Engine capacity; Power and CO2 emissions. • Points are converted to tax units. • LET = Tax units x Tax rate

  17. CALCULATION OF POINTS TO DETERMINE LUXURY ENERGY TAX UNITS

  18. HOLDEN EPIKA

  19. TAXING POINTS CONVERTED TO TAX UNITS FOR IMPOSITION OF LUXURY ENERGY TAX

  20. DEMONSTRATION OF LUXURY ENERGY TAX FOR HOLDEN EPIKA

  21. ADMINISTRATION • LET section through current licensing department • Smart debit card – prepayments of units required • Registered Vehicles: LET registration number • All vehicles to be fitted with monitor that identifies car ignition system and fuel tank • The fuel pump at petrol stations have vehicle and card reading devices

  22. IMPACT • Centralised system with authorised agents permitted to debit smart card. • Agents=car dealers; licensing offices; insurance companies; repairers; pump stations. • Exemptions • Effect: On purchasing, use and maintenance of vehicle • System can be extended to user charges and congestion tax

  23. ATTRIBUTES • Raise awareness that liquid fuel is a luxury • Influence purchase of sustainable cars • Raise revenue at four levels • Encourage reduced driving and reduced emissions • Ease of payment by consumer using debit card • Ease of collection by nominated agencies • Easy to administer • Low cost of administration • Minimal evasion potential • Protection of privacy and fair and transparent

  24. CONCLUSION • Since Ford’s invention of constant moving assembly line, vehicles have become bigger and more powerful. Are they sustainable? • The current Australian tax policy does not promote the transportation policy. • The Australian Government should take the lead in implementing transportation taxes such as LET with synchronised user charges and congestion tax to promote efficient movement of people and goods with the least amount of liquid fuel.

More Related