What the budget means for motorists

Federal Treasurer Scott Morrison handed down the 2018 budget yesterday and promptly copped a swipe from the Australian Automotive Association (AAA).

In a press release titled 'Federal Budget provides little relief for Australia's motorists', the AAA went on the front foot, denouncing the government for allowing road infrastructure investment to decline "by almost $2 billion over the forward estimates", relative to the forward estimates of the previous budget.

The new investment in Australia's road network will be "years away" from achieving anything set in concrete, according to the AAA.

"At a time when Australians are paying higher taxes than ever to use the transport network, Australian motorists want to see the Government taking concrete steps to make the transport system safer and more efficient," said the AAA's Chief Executive, Michael Bradley.

In explaining the inequity of the budget spend on the road network, the AAA points out that the government will collect $54.4 billion from the fuel excise – $12.6 billion in 2018/19 alone – and a further $5.1 billion from the luxury car tax and import tariff. Barely a third of that total – $22 billion – is allocated in the budget for road building. That represents 32 per cent of the revenue collected, versus 61 per cent for the previous year's budget. The AAA insists the government commit to a minimum sum of 50 per cent of fuel excise be reinvested in land transport infrastructure.

"This Budget fails to appropriately reinvest the taxes paid by Australian motorists in the programs so desperately needed to improve safety, affordability, and mobility," Bradley was also quoted as saying in the press release.

On the plus side, Bradley did welcome the government's establishment of three funds to address traffic-related infrastructure problems.

"While Australian motorists will this year pay a record level of motoring-related taxes, they will likely still see congestion pressures continue to increase. It is pleasing to see the Government establish the dedicated Urban Congestion Fund, the Roads of Strategic Importance Fund, and the Major Project Business Case Fund," he observed.

"However, land transport infrastructure commitments over the forward estimates have declined since last year’s budget, at the very time that funding needs to increase if we’re going to relieve the strain on existing transport assets as our population booms.

"Infrastructure is the bedrock upon which future economic growth will be built, it is critical that Australia keeps investing in activities that boost productivity and create jobs."

The AAA has also expressed dismay that the government appears to have taken its eye off the ball where road safety is concerned. Annually, the road toll costs the broader economy $30 billion, of which $3.7 billion is paid by state and federal governments, according to figures supplied by the AAA, which has called for the government to put aside $10 million for the revival of the Federal Office of Road Safety. Finally, the AAA wants the government to abolish the vehicle import tariff, stating that it costs consumers $1.3 billion extra each year, and the continued impost cannot be justified without a home-grown manufacturing industry to protect.

The Export Council of Australia (ECA) was a little more upbeat about the federal budget, but offered the view in a press release that there were additional gains to be made on behalf of SMEs (Small and Medium-sized Enterprises) that exported goods for their revenue.

"Overall, this is positive budget for SME exporters, but it’s an incremental step forward, not a major leap," said Heath Baker, head of policy at the ECA.

"The government has rightly been a champion of trade and has trumpeted its achievements in signing FTAs, but if you want to grow trade, FTAs are only part of the answer. This budget goes some way to addressing SME exporters’ other needs—but there’s still more to be done," Baker was quoted as saying in the press release.

The budget has outlined a $20 million sum for the establishment of an export hubs program catering to SMEs not currently selling products overseas. A further sum of $15 million has been set aside in the budget for DFAT (Department of Foreign Affairs and Trade) to contain non-tariff measures used uncompetitively in other countries and regions that have entered into a free-trade agreement (FTA) with Australia. Austrade, the government department that spruiks on behalf of local exporters, will enjoy a $3.2 million increase in funding, specifically for the rollout of a new national brand.

These elements of the budget would assist companies such as Tritium, Carbon Revolution and a host of other companies, including truck and trailer manufacturers.