Motorists still not paying their way, study suggests

On the day petrol taxes rise by 5c a litre, the Government has told motorists they have not been paying the true cost of supporting the country's road network.

A Government study shows road users cost it and the environment $1.1 billion a year more than it recovers from them in charges.

The report estimates road network costs at $3.7 billion a year, while the amount recovered through petrol tax, road user charges for diesel vehicles, registration and licence fees and local body rates is $2.6 billion.

It found car owners directly pay 64.5 per cent of their costs. However, those who use urban roads mostly get the better deal, paying 56 per cent of their costs, compared with those mainly using rural roads, who pay 73 per cent.

Only 56 per cent of the costs trucks impose is recovered directly from them, while rail freight recovered 82 per cent.

Buses pay 68 per cent of their costs but the commuter rail networks in Auckland and Wellington pay only 37 per cent.

The study by consultants Booz Allen Hamilton is based on 2001/02 data so it does not include, for example, the $200 million a year which will flow from today's new tax on petrol.

It does, however, include all of the money from petrol tax, including the part which is not earmarked for roads but goes into the consolidated revenue.

The cost side of the equation is broadly defined. In addition to the cost of operating and maintaining the roads, it includes $750 million a year as a capital charge or notional return on the value of the land under the roads, $670 million for that part of the cost of accidents not recovered through ACC levies, and $1.2 billion in environmental impacts.

The environmental costs are hard to measure, Transport Minister Pete Hodgson conceded, and in some cases - like the $200 million figure put on noise pollution - are not actually paid by anyone.

Included in the environmental costs is around $300 million for climate change from carbon dioxide emissions from car exhausts.

But it does not include the $1 billion cost of congestion, two-thirds of it in Auckland, as that cost is borne directly by users.

Mr Hodgson said the report was not intended to soften people up for more user-pays.

"Our aim is to inform the debate. We are not rushing around to announce policy resulting from it by any means. But an understanding of where costs and charges lie will help to inform future policy of this and future governments."

Congestion charges, for example, would require a law change and no decisions would be made on that until an Auckland road pricing study was completed, expected before the end of the year.

Automobile Association spokesman Greg Hunting said: "We would be alarmed if the Government were to use this to increase the cost of motoring. We don't believe the answer is to charge more. The answer is to fix the road network so we have fewer crashes and injuries."

More investment in the road network would allow goods to be moved around more efficiently and would mean motorists spent less time stuck in traffic jams harming the environment, Mr Hunting said.

David Jackson, chief executive of rail operator Toll NZ, said the study showed rail freight was not getting a fair deal compared with trucking.

The report said that a lot of the trucking of goods occurred within urban areas and could not be be moved by rail instead.

"If the prices paid by commercial vehicles to use the roading network were raised to cover more of the costs they generate, this could support a shift of suitable traffic to rail," it said.

"In turn, this would likely increase the financial viability of rail. The alternative is long-term and continuing subsidies of the rail network.

"Even if road users were eventually to pay some additional charges to deal with costs identified in this report, these increases could be offset by reduced taxes and charges elsewhere.

"Most of the costs not being paid for by road and rail users are already paid for in some other way by taxpayers or ratepayers - hospital costs for example."

Who pays what

* Car owners directly pay 64 per cent of the costs they impose.
* Trucks pay 56 per cent, but rail freight users 82 per cent.
* Buses pay 68 per cent, commuter rail 37 per cent.