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Proposal To Scrap Car Rego Fees, Introduce Road Use Charge

Drivers would pay for roads based on the amount they use them.

A proposed a radical overhaul of vehicle registration fees could see the  scrapping of blanket pricing and introduction of a direct charging model to bill drivers for how often and how far they drive.

Infrastructure Australia's Making Reform Happen report was launched on Monday, outlining a series of initiatives the organisation claims would deliver a $66 billion boost to the national economy. Chief among these reforms is introducing 'road user charging', a system where uniform state-based vehicle registration fees would end and road users would pay for roads based on the amount they use them.

The proposed new charges levelled on vehicle owners would be based on the "location, time and distance of travel, and the individual characteristics of their vehicle such as weight and emissions."

Owners of light vehicles currently pay a flat registration fee plus a progressive tax payment based on the weight of their vehicle, while heavy vehicles pay fees based on the type of vehicle being registered. The report proposed changing this system to reflect how drivers used roads.

"Currently, owners and users of cars and light vehicles pay fuel excise taxes and road registration fees. The revenue gathered through these sources is not directly linked to the cost of road use" the Infrastructure Australia report outlined.

Under the plan:

"A reformed charging framework for roads would see all existing taxes and fees removed and replaced with direct charging that reflects each user’s own consumption of the network, including the location, time and distance of travel, and the individual characteristics of their vehicle such as weight and emissions."

The plan would also see road charges sent directly to further invest in Australian roads, investments which are "likely to facilitate faster, more reliable trips and reduce wear and tear on vehicles," the report claimed.

Infrastructure Australia modelling showed that the suite of reforms would increase national gross domestic product by $21 billion in 2031 and $36.5 billion in 2047, with direct increases to government revenue by $3.4 billion and $8.6 billion in those years respectively.