BIC calls for permanent fuel price credit under CPRS

By: Graham Gardiner

The Bus Industry Confederation (BIC) has called on the Federal Government to provide buses and coaches with a permanent cent-for-cent

The Bus Industry Confederation (BIC) has called on the Federal Government to provide buses and coaches with a permanent cent-for-cent credit against any fuel price impact of the Carbon Pollution Reduction Scheme (CPRS) on public transport vehicles.

Under the CPRS, as it is to be introduced to Parliament, the fuel excise for heavy vehicles will be cut on a cent-for-cent basis to absorb any increases in fuel prices caused by the scheme. This measure will be reviewed after one year.

Providing buses and coaches with a permanent credit, put forward in the Confederation’s formal response to the CPRS draft legislation, would make passenger transport travel by bus and coach more attractive and not less, BIC claims.

BIC Executive Director Michael Apps argues that lumping buses and coaches into the same basket as trucks would be "incongruous to the outcome being sought by introducing a CPRS".

"The BIC calls for the Federal Government to recognise the positive emissions outcomes delivered by buses and coaches as compared to cars and permanently provide a cent-for-cent credit against any fuel price impact of the CPRS on public transport vehicles," he says.

"We believe real emissions savings can be made by reducing Australians’ reliance on the car by providing a price message in the CPRS that incentivises public transport and coach travel.

"Not doing this provides a disincentive to make an alternative travel choice from the car and keeps buses and coaches, public transport vehicles, on the same price footing as the car, with no net emissions savings effect.

"It is our view that a permanent cent-for-cent credit, through reduction in fuel excise, for public transport and bus and coach passenger transport will provide a competitive pricing mechanism for individuals to make alternative travel choices."

The BIC contends valid reasons to distinguish bus industry vehicles from other heavy vehicles in establishing a permanent cent-for-cent credit system include the evidence about the environmental and economic benefits of public transport use. According to research:
  • A single extra bus load of passengers takes up to 50 cars off the road at current fuel prices
  • At current fuel prices a family can save $5,000 a year by using public transport as their second car
  • Changing the travel behaviour of one million Australians, living in outer metropolitan suburbs and regional areas, from travel by car to travel by public transport for work trips, can result in total household savings to the economy, of more than $1.5 billion a year
  • Every one million passenger kilometres on public transport, instead of cars, saves 45,000 litres of fuel.

Apps adds that a cent-for-cent compensation system will provide a financial reward (in the form of savings) for state government contracted route and school bus services and will encourage state governments to increase the number and frequency of services.

"The savings to state governments could be used to fill any capacity shortfall that will result as people move from their car to public transport," he says.

In its submission BIC also calls for:
  • Allocating a percentage of money raised through a CPRS into public transport investment, including both infrastructure as well as rolling stock in the form of hybrid/electric and gas driven buses, on the condition that state governments identify public transport black spots in the system and increase the total number of services and their frequency.
  • Implementation of comprehensive road pricing to take account of the wide range of external costs (accidents, congestion, air and noise pollution) of transport, particularly road transport, which are not met by road users, resulting in excessive levels of traffic. Incorporating these costs into user charges for road use will mean that the price of public transport can also better reflect the costs of service provision, and provide a more rational set of travel choices, reduce demand for new infrastructure, and achieve significant economic benefits through lower congestion costs, as well as lower GHG emissions.
  • Significantly improve fuel efficiency by incentivising the testing, manufacture and operation of buses using clean vehicle technology.
  • Develop an effective taxation scheme for the industry and its passengers, including the provision of Fringe Benefits Tax (FBT) benefits for public transport travel by employees and making the cost of periodic public transport tickets, for the purpose of travel to and from work, tax deductible.
  • Improving the integration of land use and transport planning by making future federal transport funding provided to the states dependent on the state demonstrating a clear plan for the integration of public transport systems into new urban development and public transport accessibility into new road and road infrastructure systems.
  • Increasing awareness of public transport and provide information about its economic and environmental benefits through the expansion of the Federal Government’s travel smart program to incorporate technologies that have become more readily available since the program was initiated, including real-time information and development of travel demand management initiatives.

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