An anomaly in Australia's tariff regime means that four-wheel-drive buyers also benefit from a tariff rate 10 per cent lower than the import duty on passenger cars - effectively a tax break for those who buy more dangerous vehicles.
One solution would be, until all vehicle tariffs are reduced to zero, for new four-wheel-drives to bear a tax equal to the difference between the tariffs on cars and four-wheel-drives.
And state governments should adjust registration charges so that four-wheel-drive owners pay the full cost that their vehicles impose upon others. If it can be shown that four-wheel-drives cost fewer lives in sparsely populated rural areas, the impost should be lower in these places.
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One of the great successes in Australian public policy has been our ability to bring down the road toll.
Thanks to random breath-testing, seat-belt laws, airbags, and tough enforcement of speed limits, the fraction of the population killed on our roads each year is half of what it was in 1985.
By stemming the four-wheel-drive arms race, we can keep this deathly figure from rising again.
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About the Author
Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).