 Thank you very much. Thank you for the opportunity to give me the time to give some of my ideas on user charging in transport It's about Australian roads But there's could pay just as well New Zealand roads because there's a lot of similarities Between Australia and New Zealand. It's not just a humor and Pavlova. It's also the Setup of the cities. It's a very car-oriented city. Sydney is Auckland is We have some tall roads We have similar types of ways how we pay for transport. So everything that essentially holds for Australian roads You could also translate into New Zealand roads So the overview of the presentation is very briefly What kind of road pricing measures exist around the world and specifically in Australia? Then I'm going to talk about strategies How could we maybe reform the way we pay and going towards a pay-per-kilometre system and that is by many deemed as A fair system you pay for what you use The introduction of it is not easy How can we go from a current system with registration fees fuel excise tax and maybe some tolls to another system? Where we pay per kilometer How do you introduce this usually it involves changing the laws changing the way we do things? But maybe we can do it in an easier way Without having to do all the work all at once by for example putting all kinds of GPS devices in our cars And then I introduce it all in one go. Maybe you can do it in an easier way So I talk about phase one to phase four how we can use this and do this in a probably much easier transition And finally I'll have some other consideration to think about So first of all some examples we all know registration fees. It's a fixed fee that we pay for using the roads For some people, this is maybe a lot of money Maybe they drive very little for other people who drive a lot. It's a very cheap way to get around Is that a fair system? Most of us know the fuel excise tax also called gas tax in the US You pay additional cents on top of your fuel price Sometimes it's a scene as for emissions to reduce emissions in other ways is for the general revenue So the different countries are prices in different ways Tall roads they exist in many countries But mainly in Sydney. I'll show you a picture later where you can see that Sydney is Probably the number one in the world with regards to tall roads inside the city and we pay actually a lot of money for them There's cordon charging in Stockholm in Singapore and in London and you pay a certain price for entering the city center a fixed price Essentially to reduce the congestion inside the city center This works well if only less congestion in your city center, but may not work well in cities where the congestion is much further widespread There's all kinds of other schemes accessibility pricing You pay actually for having a faster travel time between cities in this case So this is in the US where you have a parallel road Which is usually one is congested and the parallel roads they ensure that it is Uncongested but a price goes up if it tends to become too busy So you pay always for an uncongested trip towards the other city And by price by price mechanism they can guarantee it is not congested But a price may be quite high if it becomes quite busy For safety that's pay as you drive several insurance companies around the world have introduced this So you pay per kilometer it may be more if you drive during the night time It may also be more if you drive too fast over the speed limit so they sometimes put a GPS device in your car you can get discounts on your Insurance fee Specifically the younger drivers if you stay within the speed limit and if you don't drive during the night That has been introduced in several countries What a lot of countries are interested in is a Paper kilometer charge kilometer charging you pay for what you use It was proposed a long time ago in the Netherlands. I'm originally from Amsterdam the Netherlands Was proposed many years ago, but there they want to have a big bang all the cars all the means of cars in the country have to be equipped with a GPS device a quite Complex GPS device was expensive was very difficult to do logistics of in in the end The the benefits of the revenues were not outweighing the costs and it was no longer introduced and the government abandoned the idea Clones of charging have been introduced in Germany for trucks and recently also in Belgium So there are GPS equipped trucks driving around in both countries and these countries are looking into can we also do something like that for car traffic? a unique system that was only in the Netherlands is peak avoidance and this Gives money to people you could earn money a Couple of euros per day if you avoided driving in a peak period. So this was cash that you could earn and save So I had a little piggy bank and it was seen as something for saving and for gaming So people are trying to make the maximum out of it How much could they earn hundreds of euros a year by not traveling during the peak period? And it has been introduced in many cities around the country until the money ran out It is it no longer exists But the idea behind this quite attractive because you don't need to change any laws to pay people But you may need to make some changes if you're charging people and of course paying is much more acceptable than charging So can you come up maybe with a system that is sustainable over the long time? That looks like this. That's more or less what this presentation is about Going to skip this slide So there's multiple objectives why we want to do this Of course, we need sufficient revenue to pay for all our roads, but also for public transport But we also may want to improve congestion. We want to improve safety. We want to have maintenance all of these We want to improve emissions as well the top What we want to do is what you actually do in New Zealand very well is Hypothricate the revenues to transport which means all the revenues that are being collected Have to be invested back into the transport system Not just the roads, but also public transport and that's probably a very good idea because it makes it more acceptable If you put it in the general revenues and can be used for anything that's usually considered less accessible Regarding the impacts if you want to improve any of these impacts It needs to be some kind of user pay system So the more you use it the more kilometers you drive the more you have to pay Otherwise, there's no way you can improve these impacts So the idea is how can we still collect enough revenues and maybe hypothecated to transport but also improve the other Impacts so reduce emissions reduce congestion So how is it done in Australia? I don't compare it to a few countries Around the world and they usually also include the Netherlands because that's what I'm most familiar with and also Australia And also New Zealand in this case So looking at the registration fees In North New South Wales in Australia 2017 a light car and this is all in Australian dollars a light car $272 up to a heavy vehicle of $511 If you compare this to other countries Then Singapore sticks out very very expensive to drive a car in Singapore but if you compare it to New Zealand New Zealand pays actually very very little It's probably still more than the US, but it's not many more many countries in the Western world that pay less So New Zealand is at the bottom of this scale Now let's go to register sort of to a few like XI stacks Where does New Zealand fit and where does Australia fit? This is I'm not sure you can read it, but I'll give you Indicators on the left-hand side is North America So there is the US all the way at the bottom Mexico and Canada very little fuel XI stacks On the right-hand side, there is Europe a lot of fuel XI stacks Here is Australia Quite similar actually to North America and there is New Zealand Still at the bottom if you compare it with the whole range So Australia New Zealand do not really text a lot and In Australia using the motorist motorist associations say a scar drives already pay enough We don't want to pay more if you compare it with around the world. We actually don't pay much at all We pay very little then the tall roads, this is a picture of Sydney and The blue are the motorways and these are tall roads So essentially all the major roads are tall roads And they're not just one or two dollars. They're actually very expensive So if you have a one way You pay a lot of dollars and you have to go back again in the evening from work you pay again So these are significant revenues for the toll operators which are mostly private operators And that's a significant cost to people in New South Wales There's new toll roads being built. These are being added Will be completed in the next coming years mainly the WestConnex So the average charges if you put a registration fee the road tolls and the fuel XI stacks together are about $1,200 Australian dollars a year. It's about hundred dollars a month. This excludes parking fees Which are collected by the local government If you compare it to other countries New Zealand pays more in fuel XI stacks. I showed you the figure But pays less registration fees and pays very little in road tolls But the total is more or less the same It's about in Australian dollars also $100 a month. So they're quite comparable with that respect. UK pays more than the Netherlands pays much more Mind you that the income levels for example The Netherlands are much lower than in Australia and the most are about New Zealand And also the tax levels of income in the Netherlands are much higher So the people in the Netherlands pay a lot for transport But can also probably say they have a better transport system So the $1,200 a year can be not just Pay it in a different way So could we pay maybe Pro-distance class because why would we want to do this? Well, look at how different people in Sydney would pay for the same distance So I'm assuming here all all drive an average amount of kilometers This person lives in Sydney West Which is usually where the lower income people live They have probably a cheaper car So the registration fee is a little bit lower because it's a lighter car But they have to use a toll road a lot So the blue area is quite large Then a person living in northern side of Sydney They usually higher income But they may be able to force a Tesla or another electrical vehicle They pay no fuel excise tax at all But do need to pay a lot of toll Because they encounter a lot of toll roads in the area Then we have a person living quite far outside the city North also higher income May have a higher income But don't pay any toll roads Because there is no toll roads in the neighborhood Then finally people living in the east and suburbs The wealthy area And they may have a heavy car So more registration fees But there's not many toll roads So they may save there So in the end everybody pays a different amount But they all use the same amount of road space So should we really be able to do that So should we really be letting them pay different Or should we maybe have a more fair system Where you pay per kilometer So the current system I would deem is unfair Especially to people who drive very little They have to pay the fixed registration fees Whereas a person who drives a lot pays exactly the same The fuel excise tax Is especially expensive for people who have to drive far But also who cannot afford to have a fuel efficient engine So the older cars are less fuel efficient They may not be able to afford an electric vehicle And the other one is toll roads Some of them, or mainly the ones in Sydney Are there because the government does not have enough money To fund them themselves So they ask the private sector for money And they want to make a profit And therefore the funding model Is such that these toll roads came about But if you happen to be living close to these toll roads You pay a lot more than if you happen to live in an area Where all the roads were for free So is that a fair system So what I also think is It's also untenable We cannot have any revenues in the future anymore Because the whole world is turning into electric vehicles And electric vehicles don't have fuel excise tax And tax and electricity is really really difficult to say You put electricity in your car Electricity is electricity So there is no alternative I think Than a distance based charge Also we think that in the future Many more people will travel longer distances Because electricity is very cheap So you can actually have your autonomous vehicle Or non-autonomous vehicle Drive around for very little money They can pick up other people And maybe drive around empty To pick up another family member Or just drive around Because you want to avoid paying parking fees Because electricity is very cheap You don't want this kind of situations to happen So we want to charge the vehicles Especially the empty ones A certain amount of money We don't want to have too much empty kilometers being made This is an article I found in the New Zealand Herald In 2016 Auckland Road tolls will drive to be forced To pay 40 cents per kilometer I thought wow, that's a big step up And then if you read the final letters It's between 3 cents and 40 cents Somewhere in that range But it could be about right But also in New Zealand It is likely to be inevitable So we really should be thinking about How do we do this best So what strategies do we have? We have a stick strategy Where you hit the donkey And you impose additional congestion charges Which is good for the government Because you get additional money But not very acceptable by the people By the car drivers You can also give the donkey a stick You provide discounts For example, in the Netherlands scheme Where we get money to people For avoiding the big periods But it leads to a decrease In revenue for the government But it is highly acceptable by the drivers So could we find something in between? So the proposed model is We need something with a stick And something of a carrot So the proposed strategy Is a distance time location based system Which we call a fair user pay system Which is more you will pay It offers incentives For saving money By driving less Driving off-peak Or driving in areas where That is less busy Uncongested The system is proposed to be Initially revenue neutral So the government still gets The same amount of money Which is acceptable by treasury And it would as well show So the majority of the drivers Would find this acceptable I'll show you a figure With the evidence Then the main question is How can we transition To a user-based system That has always been the limitation How do we get there? What's the first step we need to make? Instead of just charging people What you can do Is make it a voluntary system Everybody is happy with voluntary systems Where you provide discounts Using simple technology And a single technology is important Because if the technology becomes too expensive That it may outweigh the revenues And the benefits of introducing it Once you have this in place And people trust it And get familiar with it Then you can further expand the system And that's what the system is That I will propose Let's talk home Initially, when people were thinking About a cordon charge They didn't like it Then the government said Let's do a trial Let's just try it If you like it, we keep it If you don't like it, we get rid of it They trialed it And the people liked it And they kept it The same in London Everybody was very much opposed So when people feel that it is fair Feel that it is beneficial Then it may be more tempted to keep it So why not just try it Volunteer it and see what happens So the system is as follows Paper kilometer And how are we going to do this So in step one And I have here state Because in New South Wales Where in Australia the state Collects the registration fees Here it is national And in the fourth stage You also introduce Distance time and location variations So what do these four steps Look like Let's look at the first one The first step Is to replace the registration fee With a distance-based fee Then in the second step I propose it's an optional step To replace the road tolls With a distance-based fee And the third step Let's look at the first one I did some calculations And I put some numbers to it So this is completely voluntary People can voluntarily participate In a distance-based pricing scheme Where it works as follows I have translated the registration fees Into a kilometer rate So a light vehicle would pay Two cents per kilometer up to 3.7 cents for a heavy vehicle And that is based on The average driving of an Australian Of 13,700 kilometers And the existing registration fees And this would keep it revenue-neutral So if everybody kept driving In the same way and volunteer Treasury would still get The same amount of revenue So how would we collect this? We would propose to Just do odometer readings Just read how many kilometers You've driven, which is fairly reliable And not many people worry About the electricity meters either And has been tested in Oregon, the US And what you pay is How much you have traveled Times your kilometer rate If you drive exactly 13,700 kilometers You pay exactly the same amount As you would pay registration fees But if you drive less You can get a discount If you drive more You never pay more than a registration fee You risk free to participate So you can only get discounts You cannot pay more If you do not provide Your odometer readings You have to then tell the government every year This is more odometer reading They may have to see it Maybe at your annual checkup If you do not provide the evidence You just pay the registration fee You get no discount But if you do provide it You may get the discount You do not need any new technology This is the graph With the evidence for that The majority of the people would benefit If you look at the left-hand side So these drivers here These drivers drive very little So it's the bottom percentage Of the drivers who only Drive very few kilometers a year Whereas there's only a few of them 5%, the top 5% Who drive a lot They're responsible for a lot of kilometers But if you then look How many people drive less than average So the average is 13,700 kilometers 60% of the people Drive less than average Which means that 60% of the people Would get money back If it was a distance-based charging So potentially 60% of the people Would participate in this experiment So how would this evolve over time Well, the total revenues are exactly the same This is the situation where we want to go towards So the area under the curve Indicates the amount of revenue Collected by the government And I have now replaced The number of kilometers driven With a dollar Because there's a one-on-one relationship Between kilometers and dollar This area underneath Is exactly the same as this area If there's a fixed registration fee So there's completely revenue-neutral So let's try to introduce it Let's see how the transition goes We start here This is the current status quo It's a fixed registration fee And now we introduce discounts For driving less So if you drive less kilometers You pay less So if you drive zero kilometers You pay zero If you drive this amount of kilometers You pay this fee So let's suppose only a few people Will participate and it's likely going to be The people who can benefit the most So these people would pay That amount of money And the green part is The amount of discount they would collect But that means that the government Gets less money So to compensate for that They will have to increase The registration fee over time So if nobody participates The registration fee will not change But if people do like it And participate Slowly the registration fee will go up So to compensate for the discount given Means the registration fee has to go up To here But because now the registration fee is higher More people would like to participate So now maybe this many people Want to participate That means more discount given More that the registration fee has to go up And up Until you reach a complete Fully distance based scheme If people don't want it Nothing will happen So then we stay in this state So if nobody likes it We stay here But if people do like it They will go here by themselves The government doesn't do anything They just set the rules They just want to have the same amount of revenue And you tell me if this is going to happen or not So if you think that people act rationally And are willing to save money This is where it could go But then the equity problem comes in In western Sydney it's further away from the city The jobs are in the city centre The people with low income Live further away from the jobs So the problem is always that A high income driver from the east And suburbs near the city in Sydney Therefore pay less Then the low income drivers That have to come from the western suburbs Working in the Sydney CBD So this is not Good for the government Because it's harder to sell the message They are really charging The low income people harder Could we come go around this This is a quite difficult problem to solve One of the ideas I have I borrowed from public transport services in Sydney If you live close to the city centre You pay a lot for your public transport ticket So maybe three or four dollars For just one train stop But if you want to drive for two hours On the train It's ten dollars So the further away you go The less you pay per kilometer And this is specifically done For the people who live far away from the city To give them at least opportunity To drive further So that means that also the price difference Between high income and low income people Diminishes somewhat You can also argue That people with a higher income Have a heavier vehicle And also a Tesla is a heavy vehicle Like two thousand kilos So these people would pay more But if you want to avoid paying more You can opt for purchasing a lighter car A cheaper and lighter car So in this case I can have that a high income driver Pays more even for a shorter distance Than a low income person Driving a longer distance So I think there are ways around the equity problem We just have to be creative A practical example For the first 5000 kilometers You pay four cents per kilometer Than three and a half Than three and two and a half cents per kilometer For all the kilometers exceeding 15,000 Just an example And this is on an annual basis You can also do this on a monthly basis You can translate the scheme In such a way as well So the technology you need Is only an odometer So no need for technology But some people may find it a hassle To every year show evidence Of the monthly Or of the yearly kilometers driven And for those people there is the option To purchase or maybe get one Free by the government Whatever policy is in place To have a very simple GPS device That can just store kilometers And those should not be more than 100 dollars You buy them one time For the rest of For the rest of the years coming Should be government approved Maybe there is an app in the apple car play Or the android auto store There is no privacy issues For GPS devices Because these GPS devices are so simple They cannot store Spatial temporal data They only store Amount of kilometers driven Only one number There is no more memory in that GPS device Than to store one number You can automatically Then calculate monthly discounts So these people don't have to show evidence Every year, every month They can already collect discounts And that provides some kind of saving mechanism People can log into websites See how much they have saved They can also have a more game So how do I compare with other people That turned out to be very successful in the Netherlands So that's a saving and gaming element again But you don't need to do this This is still optional If you don't want to do it every year Phase two, optional Is replace the road tolls With a shadow toll In this case the government pays Or partially pays for the road toll So the car driver doesn't even know He's driving on a toll road All the toll roads are then paid for by the government One by one they're being counted And the government just pays But of course then the government If the government pays Then the government wants to again charge it back To the car drivers As a whole network And I did it for the calculation for Sydney It's around one billion In revenue in New South Wales of toll roads It's a very high number And if you divide it by the number of kilometers driven Is 1.8 cents per kilometer So now in this case Not specific people living around the toll roads Have to pay But everybody else is contributing To these roads Phase three Is replace the fuel excise tax In Australia this is a federal tax And this is not voluntary anymore So if you have phase three Everybody has to participate Hopefully in phase one and phase two A lot of people are participating Trailing and people see the benefits And are accepting For the registration fees And now when you're at phase three Then the government has to impose Now we go national Now everybody has to participate That does not mean that everybody has to put in a GPS device We can still do a lot of the readings So it's still an easy transition From the current status quo If you convert the fuel excise tax To a distance-based charge It's about 4 cents per kilometer The heavier the more polluting the vehicles are The more that you'll have to pay So it's vehicle specific So if you then look how we have translated this The $1,200 per year Is now translated With registration fee toll roads And fuel excise tax into 9 cents per kilometer So in New Zealand dollars About 10 cents per kilometer And remember that New Zealand Is more or less the same on an annual basis As Australia, so this is quite similar To what you would pay them in New Zealand So that's phase three Phase four is And this is now where finally We can attack the congestion much more Is introduced Time-varying allocation fees And if you do not do this You'll miss out on most Of the congestion-busting systems Because the best choice that people Have to avoid congestion Is to depart earlier or later to work There's more choice There's route choice but often There's no route alternative or not very attractive And often maybe there's no public transport alternative But many people Have the option to depart earlier If you do not have that option Well other people will So then you are faster at work Because other people will go out the peak period And you are faster So everybody can benefit from that So here this is A voluntary system Because this is again a Discounting system If you do not participate In the time-varying but just in the national Scheme of distance based You just pay per kilometer the nine cents But if you do participate In the time and location Based system you can get discounts For traveling off-peak And discounts For traveling in quiet locations Voluntary So nobody is forced to Put anything in their car If you want to get the Discount you need to provide evidence And the evidence is provided Again by the optional GPS device You put in your car What does that look like This is what you now have in your car You have an odometer which tells you exactly How many kilometers you drive And if you show this evidence You pay the nine cents per kilometer But if you choose to invest In maybe the hundred dollar device You get One that gives you two rates A standard kilometer And a discounted kilometer rate Or numbers And then you can get a discount For the amount of kilometers you have driven In low cost areas or times So this is off-peak periods As quiet in quiet areas It's very similar to day and night Terrorist electricity And if you don't show the evidence You assume that everything Is a standard kilometer So then you go here This is again similar To public transport in New South Wales Because public transport in New South Wales Is more expensive during the peak periods Both morning and evening And also is different Across different parts of the city So the morning peak is defined differently In certain areas of the city Sometimes it starts earlier Sometimes it starts later So it all depends on where does it get busy In a network at what time This is the standard Distance-based system No time variations No discount for Quiet areas So you pay the same standard kilometer rate Across the whole city And in a peak and off-peak period But if you have a time-based system Then you pay the high rate In the peak and you pay the low rate In the off-peak And if you have the most sophisticated System it's exactly the same GPS device in your car It's still very very simple Then you pay the high rate In certain areas of the city that are busy And you pay the low rate In other times and elsewhere And all your device Is doing in your car is I have so many kilometers Driven in the dark gray How many kilometers in the light gray And that's all that device is doing Just storing two numbers Again it's not tracking where you are It is not storing where you're being It only calculates two numbers So there's no privacy issues So we've gone now From the $1,200 per year To About nine cents And if you have the standard kilometers That need to be higher than nine cents per kilometer And the low peak and discount rate Is then less than nine cents per kilometer The exact numbers depend On how many people get discount If no one participates Then you have the same revenue So then there's not much difference Between the two maybe But if a lot of people participate You don't have the same amount of Revenue to keep the revenue neutral So if the government gives a lot Of discounted kilometers it means That the standard kilometer rate Will slowly go up again As the registration fee went up Just to keep it revenue neutral And if that happens more people Are happy to Try to avoid And go in the discounted kilometer And maybe participate So it's exactly the same gaming element In there So the technology if you want to participate Well you cannot go again Outside the GPS device But again it's a very simple GPS device That can only store two rates of kilometers Standard and discounted It can be an integrated system And exactly the same things as before And you have again The saving element and the gaming element You can check online how well you've done And how much you have been driven Been driving in all the months So some other considerations I've not talked about paying more I've only talked about Paying differently Which is a very different message Which makes it much more acceptable It sounds Much fairer if you say If you drive little you pay very little If you drive more you pay more The advantage is That it offers genuine possibilities To avoid paying the money So you can change By driving less You can change to Drive at a different period And save money Now currently there's no way you can save that By changing your departure time Or by driving much less Only you fuel excise tax But not the registration fees The transition is always much easier Because it's a voluntary participation system You can start at any time you want You can start small So start me with a trial of a few hundred people Or a few thousand Why not give it a go And see how that would work Other ones Hypothecation I mentioned it in the beginning The more revenues you collect You preferably want to Save and allocate To spending in transport So road transport Road infrastructure And public transport services Which are by the way also good for car drivers Because the more people take public transport The more empty roads will be This is already in place in New Zealand We don't have this yet in Australia I hope we will get this as well The marketing of this If you talk to the media They will say pricing, congestion, charging All sound very very negative But what I'm offering here Is discounts Saving on the money A much fairer system The support of motorist associations Could be quite important If the government conveys this message People may not believe it Or trust it But if a motorist association is on board They may be able to sell this message much better At least what happened in the Netherlands And the motorist association was on board And they told their members That it was a good idea And everybody was on board at that time We also get what we pay for So if you want more Improvements in the system Because this is just saying You have the same amount of revenues You can only spend a dollar one time If you really want to make changes To the transport system And Australia is not paying a lot If you want to get more European-style investments Then you have to pay more as well So I'm not saying we should not pay more But that's not what the system should be about initially We just want to pay differently But we have to think about what do we want The city to look like in the future And maybe we should try to get more investments Here in Australia And in New Zealand maybe as well Just a few slides to finish People will always have oppositions to change And there will always be winners and losers So for example Picture in Amsterdam on the left This was the shopping streets On the left-hand side in the early days Was quite congested A lot of traffic, very unpleasant to walk around And in Australia they would say Well, we don't have space to make bicycling And in Amsterdam they say Well, we have very narrow roads Because we are a historic city But we can still make bicyclings We just make it one way And this has been done throughout the city They're making it more bicycle-friendly And less car-friendly Yes, there are winners and losers But overall this was really supported By a lot of people after it was put in place If you would reverse the argument And would say we have this now And let's go back to this situation A lot of people would oppose It's the same with pricing If you come with a distance-based charging scheme Currently You propose Let's charge a fixed fee for everyone A lot of people would oppose So it's your reference point The same here, a nice picture from 1910 On the left-hand side Another shopping street in Amsterdam Only pedestrians, the rental cars yet And a tram Then progress They got rid of the pedestrian area Making it for cars and the tram Then More progress They said we cannot have cars in the city We move it back to pedestrian only And tram The shops here could argue Well, there's no parking space In front of our Shop Where would there be more people Here or here Is that really an argument So finally Who will introduce The distance-based pricing scheme first And My bet is on New Zealand Thank you very much