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Media Release


Equal tax treatment for public transport can break urban gridlock

A public transport campaign group has welcomed calls for public transport users to be offered the same tax breaks that are already offered to company cars.

The Victorian-based Public Transport Users Association applauded the New South Wales State Government who have called for equal treatment between public transport and cars.

"Federal tax rules allow employees to salary-package a car, even if the car is not used for work purposes," said PTUA President Daniel Bowen. "It's now time to level the playing field between cars and public transport to save us from growing road congestion and air pollution."

Reports from various government and industry groups have pointed to a bleak future for Australia's cities if current trends continue. "Transport-related greenhouse emissions across Australia grew an alarming 31% between 1990 and 2003, and economists are pointing to huge productivity losses as more and more time is lost in traffic," said Mr Bowen. "We need concerted effort from all levels of government to coax people out of their cars and onto more sustainable forms of transport."

Commonwealth Fringe Benefits Tax (FBT) rules allow employees to include motor vehicles in their remuneration package and claim progressively larger concessions for higher mileage, even if the car is not used for business purposes. NSW Minister for Transport John Watkins has now called for the tax breaks to be extended to public transport to help ease urban gridlock and will take up the issue with the federal Transport Minister John Anderson. "We applaud the NSW Government for addressing this serious imbalance and call on all Transport Ministers to join him and demand a fairer deal for public transport users," said Mr Bowen. "By backing this reform, Victoria in particular has an opportunity to prove it can think beyond toll-roads and parking levies."

"With tax breaks for company cars giving them an unfair advantage over public transport, we shouldn't be surprised that about 40 per cent of peak hour traffic is made up of company cars. Treating public transport equally could reduce peak hour traffic, as well as air pollution, oil consumption and traffic accidents," said Mr Bowen.

"The federal government's own modelling predicts that congestion will be costing the Australian economy $30 billion per annum in ten years, and the impact of congestion and pollution on our quality of life will be severe. There is a clear need for national action to make public transport more attractive to commuters," concluded Mr Bowen.

PTUA Office 9650 7898

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Last Modified: 7 June 2005