The Australian - Thursday 27 September, 2007

In future, walk this way, don't just talk this way

By Harold Scruby

THE August seasonally adjusted estimate for total sales of new motor vehicles decreased by 1.9 per cent compared with July. The only exception was the sports utility vehicle or four-wheel-drive, which increased by 4.6 per cent.

Passenger vehicles and other vehicles decreased by 4.2 per cent and 0.8 per cent respectively.

Recently, London mayor Ken Livingstone announced that Britain was to be hit by its first "pollution charge", with owners of large cars, including people carriers, 4WDs and luxury saloons, taxed pound stg. 25 ($58) a day to drive into city centres.

Smaller cars, such as diesel hatchbacks and hybrid vehicles that emit 120 grams or less of carbon dioxide a kilometre, will be exempt. Those emitting up to 225g/km will be charged pound stg. 8.

Meanwhile, back in post-APEC, Kyoto-free Australia, the import duty on the petrol-guzzling, eight-cylinder Porsche Cayenne, newly released urban assault vehicle the Holden Hummer and all other 4WDs is 5 per cent. And their sales are increasing at an alarming 20 per cent a year.

Yet the tariff on the environmentally friendly hybrid Toyota Prius is 10per cent, along with all other imported passenger vehicles.

But wait, there's more: about 50 per cent of car use during peak hour is estimated to be a result of federal fringe benefit tax concessions, according to Chloe Mason, visiting fellow at the Institute for Sustainable Futures, University of Technology, Sydney.

The Hawke-Keating fringe benefits tax concessions of the late 1980s, designed to overcome the tax rorts of business car ownership, is having the adverse effect of being a significant contributor to global warming, particularly with the significant growth in motor vehicle usage.

A great financial incentive for car dependency in Australia today is the FBT concession, a most perverse subsidy. Increasingly, employees are encouraged to own an FBT vehicle and have an FBT-subsidised car space especially to drive into the nation's central business districts. ***

The scheme allows a deduction from an employee's gross salary. They can salary sacrifice, using pre-tax dollars, all the novated lease payments and running costs, which include the cost of carbon-producing fuel and the use of ubiquitous and ever-expanding toll roads.

This has led to a lemming-like phenomenon known as mad March syndrome. Hundreds of thousands of Australian motorists drive their FBT vehicles as far as possible to maximise their kilometres travelled to pay the lowest possible tax rate by the end of the FBT year on March 31. These concessions do not operate in Europe or the US.

Fossil-fuelled transport is second only to coal in the creation of the CO2 gases that are wrecking our planet.

In an article headlined "Time to renew our transport infrastructure", published in The Sydney Morning Herald in August last year, Malcolm Turnbull, now federal Environment and Water Resources Minister, observed: "The simple fact of life is that if we want to enable people to really remain citizens of their city, we need to reduce our dependency on the automobile. Now I am not sure how many pennies have to drop before we get started on this task."

Yet throughout the article, he shifted the car dependency and public transport problems from the commonwealth to the states.

While praising the commonwealth's Roads to Recovery program, he ignored the fact that in Europe, parts of Asia and even the US the national governments have assumed much of the responsibility and invested heavily in public transport.

Building more roads simply encourages more car dependency. Traffic will increase to fit the space provided.

How pleasing it would be to board a train, a bus, a tram or a ferry and to see an advertisement: "Public Transport to Recovery. This is a commonwealth government initiative."

Just when will the commonwealth start investing in public transport infrastructure, with easy and safe access for walking and cycling?

And when will it provide leadership to the states to ensure roads are managed with priority to buses and trams, to make the best use of our existing resources?

Turnbull, unlike most politicians, uses public transport regularly and his light globe initiative is most commendable. But unlike light globe modifications, transport reform is costly and requires considerable infrastructure and consumer change. It will take many years before it results in any noticeable reduction in greenhouse emissions.

State governments could do much, much more. At the Action for Air forum of November 2001, the then NSW premier Bob Carr announced: "I come now to the centrepiece of our plan: stamp duty incentives to buy cleaner new vehicles. Early next year we'll release for public consultation a detailed proposal for restructuring stamp duty to reflect the environmental performance of vehicles. This will mean lower stamp duty for cleaner models, with increases for dirtier vehicles." To date, in NSW and most other jurisdictions, there is still no noticeable change to the stamp duties and state taxes payable on fuel-efficient vehicles or higher duties on gas guzzlers.

In August 2005, the commonwealth House of Representatives Standing Committee on Environment and Heritage released its Sustainable Cities report. Its recommendations included that:

* The Australian Government significantly boost its funding commitment for public transport systems, particularly light and heavy rail, in the major cities.

* That the provision of Australian government transport infrastructure funds include provision of funding specifically for sustainable public transport infrastructure for suburbs and developments on the outer fringes of our cities.

* That the Australian Government review the present FBT concessions for car use with a view to removing incentives for greater car use and extending incentives to other modes of transport.

* That the Australian Government review the tariff on 4WD vehicles, except for primary producers and others who have a legitimate need for 4WD capability.

Turnbull was a member of that committee.

Whichever climate change or greenhouse emissions reduction program is preferred, most involve long gestation periods and huge costs.

However, changes to the FBT and tariffs on 4WDs could be effected with the stroke of a pen and would result in a substantial, immediate move away from car dependency and the purchase of large petrol-guzzling 4WDs.

While we wait for Turnbull's pennies to drop and Peter Garrett to emerge from his shadow, the planet melts and Australia shows the world just how environmentally unfriendly we really are, especially when it comes to that god, the car.

Harold Scruby is chairman of the Pedestrian Council of Australia.

*** Statutory percentages of FBT for vehicle use








Number of Kilometres per FBT year















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 Source Australian Taxation Office

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