Sunday, 15 February 2009

Should bicycles be registered?

Every time Andrew Bolt or the Daily Telegraph run any sort of story that mentions a bicycle, the anti-bike nutters come out in force. A persistent thread to their lunatic rantings is that bicycles should be forced to pay registration and insurance like cars - so that they contribute to road funding - and only once they do that, should they be entitled to use the roads. The argument is always made that "My registration charges pay for the roads - you don't pay rego, so you cyclists should get off the roads".

I guess we should wind the clock back at least 100 years and ask why the state insists that all vehicles are registered, because that might provide some hints as to whether bikes should be registered or not.

Consider what the roads were like in 1909. The Model T Ford was just 1 year old, and at that time, had not been produced in sufficient numbers to drive down prices. At that time, the famous production line process had not been sorted out, so it was turned out in quite limited numbers. In essence, in 1909, the car was still the plaything of the rich, requiring a chauffeur to take care of all the dirty work.

The standard 4-seat open tourer of 1909 cost US$850 (about £180 at the time, equivalent to $20,300/£9,000 today),[21] when competing cars often cost $2,000-$3,000 (equivalent to $48,000-$72,000 today)

I imagine the second hand car market was also quite limited - still in its infancy perhaps. Governments were quite happy to start taxing this new-fangled device via a registration tax because it was a tax on the wealthy, rather than the working man. The worker walked, caught a cheap workman's train, or rode a bike.

Sales started to lift off just as WWI started, and the war made all governments hungry for revenue. I'd have to go and look up some of my history books, but I'm sure the result would be that heavier taxes were slapped on cars to fund the war effort - not to fund better roads.

I know that various politicians of all stripes have justified new or increased motoring taxes by saying that the extra money will be spent on road works, but that is almost always a lie. Motoring is simply a docile cow that can be milked with ease.

If you want proof that registration charges are not used to fund road maintenance, simply read the latest RTA annual report. The financial statements tell the whole story.

(e) Administered Activities
The RTA administers, but does not control, the collection of various fees, fines and levies on behalf of the Crown Entity. Monies collected on behalf of the Crown Transactions Entity are not recognised as the RTA’s revenues but are separately disclosed in the Program Statement – Expenses and Revenues. The RTA is accountable for the transactions relating to those administered activities but does not have the discretion, for example, to deploy the resources for the achievement of its own objectives.

Transactions and balances relating to the administered activities are not recognised as the authority’s revenue, expenses, assets and liabilities, but are disclosed in the accompanying schedules as “Administered Revenue and Administered Liabilities”.
What this says is that the RTA collects your car registration money and then gives it straight to Treasury. Treasury then puts it all into one big bucket, and uses that bucket to pay for schools, hospitals, Police etc and pet political projects.

Administered revenues

Consolidated Fund
– Taxes, Fees and Fines $403,547,00
– Other $631,167,000
Total Administered Revenues $1,034,714,00
The "consolidate fund" is the dead giveaway - that is a Treasury term for where it consolidates all revenues from various sources - property taxes, payroll taxes, stamp duty, speeding fines and car registration charges.

The RTA does make a bit of money from selling fancy number plates that I presume it can keep to spend as it likes, but it is a drop in the ocean:

Sale of Goods
Number Plates $72,749,000

So where does the RTA get its money from?

Government Contributions
Recurrent Appropriation $1,429,710,000
Capital Appropriation $1,828,911,000
Total Government Contributions $3,258,621,000
Treasury doles out a bit over $3 billion each year to the RTA from general revenue. The "administered revenue", which covers all "taxes, fees, fines and other" comes to just over $1 billion, or about 1/3 of all RTA income. I have no idea how much registration fees bring in, but I can tell you this - my current registration fee is $52 and the motor vehicle tax is $341 - which I think is calculated on engine displacement or power. The total is $393.

A total of 5,204,316 "vehicles" were registered in NSW last year - that includes cars, motorbikes, trucks, buses, light and heavy plant and trailers. I can't figure out where all the money is going, because if we assume an average rego cost of $400, those 5 million vehicle owners should be paying over $2 billion in fees and taxes just to register them.

That number would probably be a lot higher, since heavy trucks pay through the nose in registration fees. I'm sure I could find the dollar figure if I wanted, but I can't be bothered. Let's just assume that most anti-bike road ragers drive cars, and they pay a registration charge similar to mine. There are 3,443,036 cars, 4WD's and people movers in NSW. At $400 per car or people mover, they'd be paying $1.38 billion in registration charges - still under half what it costs to run the RTA each year.

Before we go on, let's look at how the RTA spends that money:

– Employee Related $501,856,000
– Other Operating Expenses $175,891,000
Maintenance $774,408,000
Depreciation and Amortisation $785,639,000
Grants and Subsidies $40,906,000
Finance costs $51,352,000

Total Expenses excluding losses $2,330,052,000

I know some people like to think that all that $3 billion in revenue must be spent on tar and concrete, but it's not. From what I can tell, at most, $1 billion is actually spent on road works. The RTA reported a surplus in 2008 of $1.3 billion. It also "spent" $785 million on depreciation - which is a bigger cost than maintanance, and a bigger cost than wages, salaries, contractors and superannuation. Wear and tear on our roads and bridges and culverts and earthworks is the biggest expense.

What do all these numbers tell us?

I can tell you that they confuse the hell out of me. You've got money coming in from registrations (but we don't know how much), and it goes straight to Treasury. Treasury then mixes up that money with the money from all other sources and doles it back out.

What seems to be the case though is that registration charges on cars comes nowhere near paying for road maintenance - car owners pay $1.38 billion in rego, and the RTA spends $2.3 billion on the road network.

Truck drivers will chime in now and say that they pay massive registration fees, and that is true. If anything, the 98,000 heavy trucks and prime movers are heavily subsidising the 5.1 million "other" vehicles on the roads - although a 72 tonne semi does hundreds of times more damage to the pavement than a Kia or a motorbike. If anything, truckies should be telling whinging car drivers to bugger off and get out of their way because they are paying much higher road charges.

Why do trucks pay more?

Partly, it is because governments know they can afford to - trucks are businesses, and businesses can be milked more heavily than families. The other reason is the extra damage they do to our roads. So if we are happy that trucks should pay heaps for doing lots of damage, we should also be happy with the idea that bikes pay nothing in road charges, since they do no damage to concrete or tarmac roads.

As for "milking" cyclists for tax revenue, it's worth remembering that many cyclists are kids (riding to school or sport), and a 13 year old kid generally doesn't earn much in the way of income. We don't tax kids in the main - we tax adults, and adult activities, because adults tend to be the people that own real property, or have an income worth taxing.

We could also talk about fuel excise all night, but that goes into consolidated revenue as well and is mixed up into a great big bucket. It is not hypothecated revenue.

Insurance. Let's talk about insurance. Another argument the anti-bike crowd make is that cyclists have no insurance.

That is a lie.

As a member of Bicycle NSW, I automatically get:

  • Australian Cyclist magazine - 6 issues
  • $20m Public liability insurance - real must have!
  • Personal accident insurance
  • Great member discounts and prizes
  • Social rides calendar

Join for only $90 or $135 per household, kids included!

I pay the family rate, so we are all covered by the same basic insurance that a car driver with a green slip has. If I crash into the back of a Bentley (which I almost did one day), I have some coverage.

Not everyone joins an organisation like Bicycle NSW of course, but I think the money is well spent. In fact, the numbers are paltry - only around 9,000 members at present - but they are growing, and insurance is available and taken up by serious cyclists.

Now let's talk about number plates themselves. Why are cars, trucks, trailers, buses and motorbikes required to show a set of plates, yet bikes are not?

Imagine what the roads would be like with no number plates. You are in a supermarket carpark and you see a Lexus bump into a Falcon and scratch the paint, and the Lexus then buggers off without stopping. You go to write a note to leave under the windscreen wiper of the Falcon - what do you say? "A bronze Lexus scratched your car"? How useful is that?

Cars have an identifying number plate so that if two of them crash, the cars involved can be identified for insurance reasons and so on. They have them so that when you speed past a radar trap, you can be fined. If you overstay in a parking spot, a traffic warden can write you a ticket.

The reasons can be boiled down to two - insurance and policing.

Now then, consider the difference in outcomes if I fail to take a corner in my 4WD and end up in your front yard, and if I fail to take a corner on my bike and end up in your front yard.

In the first case, my 4WD will probably end up embedded in your bedroom, having taken out your fence, various trees and plants, a gnome or two and your bedroom wall. The damage bill will be in the tens of thousands of dollars. Even if I manage to reverse out and shoot through, my number plate will allow the Police to find me, and thus your insurance company.

In the second case, my bike will hit your fence, and I will be catapulted over it, probably to land on a gnome, breaking several ribs. At most, you will have a scuff mark on your fence, a flattened gnome and a moaning victim on your lawn. The ambo's will probably do more damage when they stomp across your flower bed to pick me up.

Now consider vehicle on vehicle crashes. Out of all the instances in 2008 when a bike hit a car, how many resulted in the car being undriveable? Actually, I know of one - when Junior tore down a driveway and took out a Hyundai, writing it off. But it is pretty rare for a cyclist to mangle a car. In his case, although he wrote the car off, he also wrote himself off, and the bike. He was in no fit state to leap back on his bike and tear off, leaving a frustrated driver behind wondering who to blame the crash on. He was carted off in an ambulance for emergency surgery.

When a car and bicycle collide, the cyclist never gets to run away in general. Most often, they are lying on the pavement waiting for an ambulance to arrive. Identification is not an issue.

What about speeding?

Well, when bicycles are consistently able to do 60km/h in a 50 zone, ore 130km/h in a 110 zone, I'll endorse the idea of number plates for bikes, so that the cops can fine them for speeding. However, given that most cyclists roll along at 20-25km/h, I don't see this as an issue. Even the super fit, super fast pack riders rarely exceed 50km/h, even when they are in a hurry.

And parking tickets?

How many bicycles per year are parked in such a way to warrant a parking ticket? I'd guess that if a bike was parked really, really badly, the traffic wardens would just cut the lock and impound it. Parking tickets for bikes is rarely an issue in most locations.

Yes, there is a problem with bikes zooming through red lights and stop signs, and I hate seeing cyclists doing it. I know it infuriates other law abiding motorists, which is why I don't do it. However, even if we did put number plates on bikes, how many fines do you think would be issued per year? Fines could only be levied in two circumstances - if a red light camera catches the bike, or if a cop sees it happening and pulls the cyclist over and writes a ticket.

In the case of a traffic camera, smart cyclists would simply not zip through the red light. In the case of the second, it happens already - cops write tickets for cyclists if they catch them breaking the law. A number plate is not required - what they are after is the drivers licence of the cyclist (which is not much use if the cyclist if 14 years old). The only way to stop cyclists from zooming through red lights is to put more Police on the roads - but the same applies to motorists.

Phew. I think I have come to the end of my argument.

Oops. Not quite.

Let's talk about the motorist argument of "I pay my taxes, so I have a right to use this road, and you don't".

If I walk into a shop tomorrow and buy a $3,000 bike, I will be paying $270 in GST. Each year, I spend about $1,000 on maintenance and accessories - again, paying $90 in GST.

There is a car around the corner on sale for $1,700. We need a 2nd car, so this is worth considering. It would do a maximum of 50km per week, if that - essentially, we just need it to drop the kids up the road at day care.

It's an economical car, so at 2,500km per year, it will use less than 250 litres of fuel. I think the current excise is 38 cents per litre, plus GST. So we'd pay $95 in petrol excise per year.

In essence, buying and running a new bike would contribute more into the tax coffers than running a second car (excluding rego costs).

And as for this whole "cyclists pay no tax" crap argument, I offer this:

In 2008, I paid $72,000 in income tax. It was a very good year.

In 2007, I paid $34,000 - and that is pretty much the level I have paid for 5 or 6 years.

Since 2004, when I started cycling, I estimate I have paid $240,000 in income tax alone. I'm not even going to bother adding up all the GST, fuel excise and other taxes that I have paid on top of that. I reckon I have contributed more to road funding on my own than every bike hating dickhead that spews their bile on Daily Telegraph blogs and forums.

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