Public transport Senate committee calls for tax review

By: Jason Whittaker


A Senate inquiry into public passenger transport infrastructure and services funding has recommended that the Federal Government establish a national

A Senate inquiry into public passenger transport infrastructure and services funding has recommended that the Federal Government establish a national transport research body, amend the concessionary tax treatment of cars as a fringe benefit and investigate public transport tax incentives.

It has also requested that the Federal Government change fringe benefit tax (FBT) rules so that the scope of exemptions is consistent between car transport and public transport.

The Rural and Regional Affairs and Transport References Committee tabled its Investment of Commonwealth and State funds in public passenger transport infrastructure and services report in the Senate this afternoon.

The committee received 194 submissions and held 12 hearings across the country since Senate referred the inquiry to the committee on December 4, 2008.

The committee made nine recommendations in total. They are, in order:
  1. That the Commonwealth recognise the cost-effectiveness of the 'Travelsmart' behaviour change program and consider reinstating funding for it from an appropriate department.
  2. In future negotiation of Home and Community Care program agreements, the Commonwealth should be mindful of:
    • The effectiveness of present community transport services
    • Future transport needs of groups targeted by community transport
    • Appropriate balance between community transport, regular public transport and taxis to meet those needs, and
    • Appropriate division of responsibilities, actions and funding to meet those needs.


  3. In consultation with the states/territories and other stakeholders, the Australian Government should establish a national transport research body suitable to be a national centre for detailed research into world's best practice public transport and active transport.

  4. Commonwealth funding for public transport should only occur in the context of overall funding for infrastructure projects that meet a strict merit-base criteria.

    These include an objective assessment of the broader community and economic benefits and the degree to which the sponsoring state government has adopted an integrated, inter-modal, best-practice approach to transport planning and management.

    The Commonwealth can only make such decisions in the context of broader judgements regarding all competing infrastructure projects that have national significance.

  5. That the government investigate options for tax incentives for public transport including estimating their likely effects on people's travel behaviour.

  6. Government support for behavioural change programs (such as 'Travelsmart') should include measures to encourage 'buy-in' by employers in promoting sustainable transport in their workforces.

  7. The Government should amend the car FBT statutory formula to remove the incentive to drive fringe benefits cars excessively to reach the next threshold.

  8. In relation to fringe benefits taxation of cars by the statutory formula method:
    • The Government should state the purpose of making the tax concessionary (noting that whether the tax should be concessionary, and whether there should be a statutory formula for the sake of easy compliance, are different questions)
    • The Government should investigate and report on how well the concession is achieving its purpose and
    • The Government should investigate and report on what the likely effects on consumer behaviour would be if the concessionary aspect of car FBT was reduced or removed.


  9. The Government should change FBT rules so that the scope of exemptions is consistent between car transport and public transport.


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