IPART proposes congestion charge for NSW

By: Jason Whittaker

The NSW Government may abolish vehicle weight taxes and replace them with user charges following a review into the State’s

The NSW Government may abolish vehicle weight taxes and replace them with user charges following a review into the State’s tax system.

The Independent Pricing and Regulatory Tribunal (IPART) today released its taxation review.

It says while motor vehicle taxes may be a good indication of the wear and tear vehicles do to the State’s roads, they fail to take into account how often heavier vehicles are used.

IPART called on the Government to look at a road user charge system after other transport policies have been resolved.

The report says this may also include mandating congestion charges in order to reduce the number of vehicles on the State’s roads.

Insurance taxes may also be overhauled, with IPART criticising stamp duties for third party as well as general insurance.

"In the short term, the stamp duty exemption for third party motor vehicle personal injury insurance should be abolished and that the standard rate of stamp duty for general insurance (Type A) be reduced from nine percent to six percent," the report says.

The review also advocated replacing vehicle registration duty with a revenue-neutral annual charge.

According to IPART, the current system "acts as a disincentive for individuals and businesses to buy newer, more environmentally friendly vehicles, and to replace their vehicles with more suitable ones as their needs and circumstances change".

The tribunal’s review into the tax system found the State’s total tax revenue is lower than other states based per capita and as a proportion of Gross State Product (GSP).

The report says the system is inefficient when compared with the Federal Government as it relies on a wider range of taxes more narrowly based.

Greens spokeswoman on transport Lee Rhiannon says the Government needs to implement a congestion charge but added it will only be successful if more funds are poured into public transport initiatives.

Unless more is invested in the rail and bus networks, Rhiannon says there will be insufficient services to cater to the number of people changing from cars to public transport.

Rhiannon is advocating the UK model be used, saying "the London experience has shown how congestion charges can work successfully".

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