Public transport contributes to well-functioning, liveable cities that can compete for skills and capital on the world stage. Enhanced public transport could make a significant contribution to economic performance and the fiscal positions of Australian governments by contributing to enhanced participation and productivity among the Australian workforce.
Traffic congestion is estimated to cost the Australian economy up to $20 billion per annum. Public transport is an essential component of any successful congestion management strategy. Public transport removes a substantial amount of traffic from the road system, particularly at peak times and in the most congested areas where it can account for a large majority of journeys.
Even when carrying a relatively small share of journeys, it can make a disproportionate contribution to improving the performance of congested roadways. Serious gaps in the coverage of fast, high-capacity public transport are, however, constraining its contribution to mobility and congestion management.
Current Fringe Benefits Tax (FBT) provisions offer a concession to company cars that becomes more generous as the distance the vehicle is driven each year increases. This concession amounts to a subsidy of more than $1 billion each year and contributes to increased traffic, pollution and vehicle costs for business. Reform of the FBT legislation, as recommended by a growing number of groups, could free up resources for other priorities and operate to ease traffic pressures in our major cities.
Australia's excessive private motor vehicle use is exacerbating a growing gap between domestic oil consumption and production. Within the next decade, the annual cost of oil imports is on track to exceed the entire merchandise trade deficit of 2006-07, putting further pressure on Australia's balance of trade. An expanded role for energy-efficient public transport would significantly reduce Australia's oil import requirements, without the financial, logistical and environmental challenges of new supply chains and vehicles compatible with alternative fuels.