Here’s an idea…..Abolish the Vehicle Registration Annual Fee.

Imwatchinu 30 March 2011 17

I have a number of things to say, since RiotAct has helped me in various ways I thought a little content return may be in order. Therefore I will be posting semi-regular threads with the above heading ‘Here’s an idea…..XYZ – to stay in theme.

I don’t think this idea is new at all but thought I’d post it up to see if this is something that may work in Australia however in a nutshell, would people pay more for a litre of fuel if they didn’t have to pay an annual registration/3rd party cost and at what point does this become unattractive?

At the moment, there is different costs involved across all states of Aus for the same car. How much it costs to register a Toyota Corolla in Canberra is different to NSW, WA and so on. Granted, some of this comes down to the insurance component and in some area’s this is higher for a variety of reasons.

If you take 2 Corolla owners (or any car you can decide) one person drives 5000kms annually whilst another drives 50,000kms. Should the person doing less kms REALLY have to pay the same insurance costs when they are on the road for 1/10 of the time of the 2nd driver?

Obviously the 50,000km/year example is putting themselves at greater risk of an accident simply by spending so much time on the road, they also contribute to more wear and tear on the road system yet both pay the same costs.

Could we abolish the car registration/insurance process and add the cost of insurance and registration to the price of a litre of fuel? I know fuel already SEEMS expensive and I can hear people moaning at my idea already if it means fuel now costs $2/litre but I can see many benefits for this.

Pensioners, students or the disadvantaged, who perhaps do little driving but still require transport, are more likely to be able to own their own/afford to operate a car. It also means since cars need fuel to operate that a car CAN’T be driven without insurance/rego being paid for. For my thinking this is a huge plus. It won’t take away unlicenced (therefore uninsured) drivers away however it would stop cars being driven unregistered which from all Police reports, seems to happen too often enough.

Would this scheme cover the ‘Mullys’ in the world? Under this new scheme, the stolen car has fuel in it therefore insurance, but the car is stolen (by a licenced driver or not…) so what then?

We are hearing news about a Carbon tax or ETS and this might be something that is actually good for the planet. Whilst it’s obvious that there is such a thing as ‘Climate Change’ it’s my personal belief that this is a continuous cycle and humans to some degree have contributed to this process *potentially* occuring faster, how much faster I guess we don’t really know but I digress…..

Such an addition of any ETS SHOULD include a thorough review of the current taxation system. Whilst we’re reviewing an ETS, tax why not vehicle/household annual fee’s at the same time? It almost should be called a ‘Review of living costs’ as much as anything.

An ETS may well cover the use of cars for individuals anyway and could even be rolled into the cost of fuel as per current taxes/excises. One point is that a review would need to be comprehensive enough to include these items but also work so that for the Pensioner, student etc it is cheaper (VS now) and for those who drive more it costs slightly more.

A very important aspect of this would be a tax review and cost of living. If a household is given carbon credits they could use it to offset other costs, but these could be brought under one umbrella like your rates perhaps?

I’d like to see more alternative fueled cars, but if you’re not buying fuel you wouldn’t have insurance etc!
So again, if costs were rolled into the household rates then by driving electric you could further drive reductions to your environmental impact.

What about a stolen electric/hybrid vehicle?

So you can see I’m not really certain how certain aspects would work but there should be an incentive for people to drive less OR perhaps take up a clean source since cars are already heading that way.

There will be the blindingly obvious I have missed and perhaps it’s just not workable however I’d like to see what others think about this and whether it could work here. Heck lets even throw some suggestions out there as to the actual price of fuel if it were to include these costs?

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17 Responses to Here’s an idea…..Abolish the Vehicle Registration Annual Fee.
Innovation Innovation 10:22 am 31 Mar 11

Although a great idea in theory, the problem is jurisdictional. You will never get all States and Territories to agree (eg, ACT drivers would just go to Qbn for their fuel). Also, rural areas would want dispensation.

Many people have a legitimate need for cars. However, the size and power of the cars are questionable in many cases. Also, many people who can afford the running costs don’t save up/combine trips or once they are in their car (and have paid the on road costs such as rego and insurance), can’t justify driving part way and then using efficient public transport in the main corridors.

Poorer people too spend all of their money getting their car on the road (usually the older, heavier and/or inefficient vehicles) and then wouldn’t be able to afford to combine this cost with the cost of public transport.

The current ACT rego based on weight is a good idea but doesn’t go far enough. The cost should be expanded for more powerful vehicles and increased overall for new vehicles. CTP too should be tiered based on factors such as power and weight (as there must be statistical evidence to support this). Be warned though, larger families will complain as will people who need to tow (eg tradies with trailers).

Many people buy vehicles that are too big for everyday use but are needed for an occasional purpose (eg towing vans or boats or for four wheel drive trips). If on road costs for these vehicles were high enough, these people would be forced more to justify the extra cost versus hiring a vehicle for the occasional purpose. Other people buy large cars for occasional luggage needs when a top box would do just as well.

Other ideas (although some still have jurisdictional problems or need Federal support) are:
1/ Significantly reduce stamp duty, CTP and rego for VERY small capacity and under powered vehicles (it’s done for small motorbikes so why not cars);
2/ Progressively increase stamp duty, CTP and rego for heavier and more powerful vehicles;
3/ Increase CTP and rego for distance travelled (and very heavy penalties for driving with a faulty or disconnected speedo/odometer);
4/ Expand capacity for free rego, insurance etc for more powerful and a greater range of electric vehicles (eg, 200W bicycles and tricycles and electric wheelchairs are currently exempt and I think Golf carts at least used to be exempt);
5/ Encourage greater use of small capacity motorbikes (eg, I don’t think any of the recent fatals were on postie bikes) by allowing them (under limited speeds) into spaces permitted by unregistered vehicles (eg, on road cycle paths, bus stations etc.
6/ Dramatically increase penalties, requirements and monitoring for on road offences such as speeding, tailgating, aggressive driving practices and road rage incidents (this will allow drivers of slower less powerful vehicles to be more confident on the road and show others that fast cars are only useful on the race track).

Special G Special G 8:48 am 31 Mar 11

This system is effectively already in place.

Registration allows you to drive your car on the roads
Petrol tax hits you for the number of km’s you travel.

Thing I would add is something along the lines of the NZ Third party insurance scheme where everyone is covered by the govt third party for injury.

Postalgeek Postalgeek 10:36 pm 30 Mar 11

Nice in theory for people living in the city who have alternatives, but try to float that idea in rural areas and their language will make you blush. Unless you provide exemptions or subsidies for rural sectors, you’ll have an uprising on your hands.

justsomeaussie justsomeaussie 4:47 pm 30 Mar 11

If governments were serious about removing traffic congestion they’d make motorcycle registration free. We need a system that encourages people not to drive on their own to and from work.

p1 p1 4:28 pm 30 Mar 11

dtc said :

– it will result in people owning multiple cars and storing them on the streets/nature strips etc – there is no cost until you use the car (except for opportunity cost but people ignore that)

Opportunity cost is pretty minimal if the vehicle in question has nearly no dollar value.

I have always thought that costs per km is the fairest way to go, and imposing that through fuel cost seems the only way to avoid the system being rorted (odometers can be disconnected pretty easily).

Add to this the emission benefit due to this enhancing the saving from more efficient cars and you have another driver.

If the government really wants to drive the market in electric vehicles though (as far as I know there isn’t a single from-the-factory electric only vehicle on the Australian market), they could pretty easily offer free rego for electric only vehicles for, say, the next five or ten years. Of course that is just subsidising coal powered road transport, but that is another issue.

Pommy bastard Pommy bastard 4:12 pm 30 Mar 11

The current system is good and equitable, leave it alone.

A teenager has described his amazement after being quoted almost £33,000 ($51,000Au) to insure his second-hand car.

Jake Redshaw, 17, from Salford, bought a six-year-old Vauxhall Corsa for £3,000 ($4600Au) after he passed his test earlier in March.

He told the BBC he expected comparison website insurance quotes to reach about £3,000 – but received a headline figure of of £32,819 from the AA.

The company said the figure was a mistake and should not have appeared.

Jake, from Eccles, was hoping to use his car to travel to Pendleton College, where he is studying IT, and his part-time job in a warehouse.

“The average [price] was probably about £12,000, £13,000 and the cheapest was £5,700. And I got £33,000 from AA,” he told the BBC.

“I was amazed because I was expecting to pay £3,000, £4,000, but not that high.

“I can’t insure it. If I want to go out I’ll have to get my mum or dad to drop me off to go out. I can’t be independent as I wanted to be.

“At 18 it apparently goes down, so I’ll have to wait until then. But it’s only a couple of months away so it’s not that bad.”

According to the Association of British Insurers (ABI), 12% of drivers are aged 17 to 24 – but they are responsible for almost 30% of accidents. … r-12824940

p1 p1 3:13 pm 30 Mar 11

Conceptually, I like it.

Practically, I see some hurdles which my be hard to jump.

– Vehicle safety checks will have to tighten up (to at least yearly in line with other states) as people will be much more likely to have a dodgy car they only use once a blue moon (since there is no cost associated with a car in the garage not being driven).

ConanOfCooma ConanOfCooma 3:05 pm 30 Mar 11

Makes too much sense, the Government will never let it come to be.

EvanJames EvanJames 3:03 pm 30 Mar 11

The Henry Tax Review proposed that people who drove more kms pay more for rego and other costs (rather than just paying for more petrol as they do now). If you’re interested in this idea, give it a read as he integrated this in with his various other suggestions.

After years of work, to have one thing cherry-picked out of the whole (mining tax) must have been pretty galling.

dtc dtc 3:01 pm 30 Mar 11

This idea has been suggested many times and, as you say, is a much better deal for those who don’t use their car much or on lower incomes but need a car. Recently the environmental implications (use it and it costs more/use a petrol guzzler and it costs more) have been raised.

Apart from the need for a national scheme, the arguments against it that I have heard (not saying these all have merit) are

– if people have a car, they will use it. Rego and insurance can prevent people buying cars in the first place (because large up front payments are harder to bear than small frequent payments eg mobile phone plans)

– it will result in people owning multiple cars and storing them on the streets/nature strips etc – there is no cost until you use the car (except for opportunity cost but people ignore that)

– it may reduce revenue because petrol consumption will go down. It doesnt cost the govt any additional money if more people use petrol, so petrol tax is effectively a ‘free tax’ ie the roads still need to be built, the govt is better off if more people drive because it doesnt cost anything more than the road already costs. If you decrease use of the road, it still costs the govt the same amount to build the road (consequentially, the govt then needs to raise other taxes) (a counter argument is that public transport then becomes less unprofitable)

– it prevents having an upfront incentive to more efficient cars eg having reduced rego for low emission cars (I am not sure if we actually have this anyway, but it prevents us from having it)

I suspect the real reasons are

– potential tax reduction
– inability to get national consensus eg farmers/rural people will complain
– the govt’s need to make everything self funding if at all possible, meaning that the cost of running a car registration system has to be directly funded from…car registration (rather than funded from a revenue source that is someone removed frmo the actual registration system)

Rollersk8r Rollersk8r 3:00 pm 30 Mar 11

I don’t see the advantages. As far as I know, the government side of car registration is really no different to, say, rates for having your garbage collected. It doesn’t matter if your neighbour throws out twice as much rubbish, you both pay more or less the same per bin.

Rego is made up of various components such as Third Party Insurance, the road rescue fee, etc, etc. Someone may want to correct me or expand on this but I’m sure there are numerous reasons why these costs vary from state to state.

An increasing number of comprehensive insurers seem to be offering slight discounts if you drive less – but this is a different kettle of fish.

troll-sniffer troll-sniffer 2:41 pm 30 Mar 11

I’ve always thought this idea should be in place but I’ve also relaised over the years it will never be introduced because of the logistical difficulties involved, not least getting self-interested states to agree to anything sensible.

I’m a very low km car-owner (7-10 weeks between fill-ups) so this would be a godsend if it ever came about!

Imwatchinu Imwatchinu 2:35 pm 30 Mar 11

Felix the Cat said :

I think the idea has merit, would need to be an Australia wide thing, not just local ACT. Petrol thefts would probably rise though.

Agreed, nation wide would be the only way (to still have insurance interstate?)

It would need to also cover diesel, gas etc. Add in some quick charge points for battery cars and add the registration/insurance costs for Kw….

Or what about some real incentives like free insurance/registration for life for the person that designs and builds an alternative to the current options? Not only does this spark ideas from the deepest pits of the urban garage, but perhaps the car industry might see that we, as consumers, are serious about trying to slow down some of the consequenes the human race has had on the environment although much of it is ruined for good. .

You raise an interesting point about petrol theft. Regardless of whether this idea would ever be implemented petrol, will soon rise to $1.50+for good and I have no doubt $2+ a litre isn’t all that far away…unfortunately.

Holden Caulfield Holden Caulfield 2:32 pm 30 Mar 11

Here’s an easier idea, why don’t we abolish the NRMA monopoly on CTPI in the ACT? Haven’t we already been promised a more open and competitive system?

Rego is relatively cheap, at roughly $250 pa (not withstanding changes in fee for different sized cars etc). It’s the $500-odd you pay for CTPI that stings.

That little rant aside, I can see merit in the whole user pays theory, just not sure if any polly could get it over the line when it’s a state-based tax that, as noted, would really need to be introduced on a federal basis.

Here’s an idea… why don’t we abolish state/territory governments!

andym andym 2:21 pm 30 Mar 11

I like the user pays rationale, but think managing the exceptions would be a show stopper. Things like government owned vehicles and home brewed bio fuels.
Plus I suspect that ultimately it would cost us more due to “administration overheads”.

Solidarity Solidarity 2:17 pm 30 Mar 11

What about people who bew thier own fuel? I can see a lucrative black market with this scheme, I approve

Felix the Cat Felix the Cat 2:00 pm 30 Mar 11

I think the idea has merit, would need to be an Australia wide thing, not just local ACT. Petrol thefts would probably rise though.

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