ARA backs 'user pays' system for road taxes

The report, A Conceptual Framework for the Reform of Taxes Related to Roads and Transport, released last week by the Treasury as part of Australia’s tax review, concluded that there should be a move away from collection of revenues through fixed and variable charges towards a "user pays" system.

These charges would account more directly for the specific costs caused by road users, the paper by La Trobe University academics Professor Harry Clarke and Dr David Prentice said.

"The way drivers pay for using roads is long overdue for change," ARA chief executive Bryan Nye said on Friday.

With road congestion expected to more than double over the next 15 years and cost $20bn-$30bn per annum, ever increasing demands from road authorities for additional funding to meet transport needs was no longer an economically sustainable system, the ARA said.

"Pricing which links road use and damage to the actual costs that users pay is an essential tool in managing our roads," Mr Nye said.