Cars, public transport must have equal treatment under carbon price

July 5th, 2011 (Federal funding, Media releases)

The Public Transport Users Association has called on the Gillard Labor Government to ensure public transport users are not penalised relative to motorists under a future carbon price.

Prime Minister Julia Gillard stated on Sunday that motorists’ fuel purchases would be excluded from a carbon price in perpetuity.

However, the government has not made any guarantees about the effect on public transport costs. If electricity and fuel for trains, buses and trams is subject to a carbon price, as seems likely, public transport operators and authorities may be forced to pass the cost on to passengers through increased fares.

“This could create a perverse situation where train or bus travel is subjected to a carbon price while car travel is not,” said PTUA Secretary Tony Morton.

PTUA calculations indicate that with a carbon price of $25 per tonne of CO2, a Melbourne public transport user could be paying $1.28 extra per week. By comparison, if the same carbon price were applied to petrol, a motorist could drive 200km a week before paying the same amount. [1]

“We fully agree that transport must be included in a carbon pricing scheme to ensure all sectors of the economy participate in reducing our greenhouse emissions,” Dr Morton said. “However, we cannot accept this being done in a way that distorts the market in favour of petrol-powered private transport against all other forms of transport. A kilogram of CO2 from a public transport user and a kilogram of CO2 from a motorist should be treated equally – either both are in, or both are out.”

Dr Morton said the PTUA understood the reasons for leaving petrol out of the scheme. “People are labouring under historically high oil prices, which are only likely to increase further. So it’s understandable that current excise arrangements need reforming in a way that eases the community’s transition away from oil dependence. But governments are kidding themselves if they think they can overlook the public transport alternative in their urge to placate the motoring lobby.”

The PTUA has proposed that Federal funding be provided to State public transport authorities, equivalent to the amount they will pay under a carbon tax. “It’s long been understood that the Federal government has as much reason to be involved in public transport funding as it does to be involved in road funding. A little extra – less than $100 million a year on our estimates – will get us closer to a level playing field.”

Dr Morton also drew attention to Australia’s ballooning “road deficit”. “The cost of road transport to the Australian public is at least $17 billion a year more than is recovered in motoring taxes and charges, and growing,” he said [2]. “The government already gives back in tax concessions nearly three-quarters of what it collects in fuel excise.”

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[1] PTUA estimates that Melbourne train, trams and buses emit 600,000 tonnes of CO2 annually, based on service-kilometre figures in Victorian budget papers, and Federal Government figures for electricity and diesel emissions factors. At $25 per tonne, the carbon tax bill of $15 million is 2.5 per cent of an estimated $600 million in annual Metlink revenue. A 2.5% fare rise corresponds to $1.28 extra per week for a Zone 1+2 commuter travelling on Myki Money and paying $51 per week currently. Motorists’ costs are estimated assuming fuel efficiency of 10 litres per 100km and a 6c per litre carbon tax.
For more energy use figures see www.ptua.org.au/myths/energy.shtml

[2] See www.ptua.org.au/myths/petroltax.shtml