Activity 11.1: Guided practice
Read the following text. After each paragraph you will be given a choice of two headings,
one of which is the main idea and one of which is a detail. Choose the main idea.
A
As WA tries to keep pace with a growing population and a resources boom, the
strain on road infrastructure is clear. But anew independent report commissioned
by the RAC to assess how much road-related tax is collected in WA, and how
much is reinvested, has found a gaping hole in the budget. Only a fraction of the
money collected in taxes related to road use and sent to the Federal Government
is returned in the form of better roads and bridges, despite millions heading into
Commonwealth coffers.
Heading 1: A report reveals an inequity
Heading 2: WA's growing population
B
Economics group ACIL Tasman looked at the amount sent east in the excise
duty charged on petrol and diesel, the cost of luxury car tax on vehicles worth
more than $57,100, and customs duties paid on motor vehicles for the State.
It also calculated the amount of GST paid on petrol, and GST for new cars and
fleet vehicles. In total the revenue heading from those sources to the Federal
Government works out at approximately $2 billion a year. But when the amount
transferred back to WA for road funding is considered, the gap is substantial.
ACIL Tasman estimated that only 33 cents in every dollar raised in federal
road-related taxes from WA is returned to the state for road projects, mostly
in grants to local governments or in specific funding, like that for Black Spot
projects. This leaves the state and local governments picking up the rest of the
tab to build, maintain and repair the 175,000 km of roads in WA.
Heading 1: Only a third of revenue returned
Heading 2: A breakdown of the numbers
C
RAC Head of Member Advocacy Matt Brown said the report found that an additional
billion dollars that was collected from road users by the State Government
was reinvested in the network. But this only looked at direct charges, such as
registration fees, and didn't reflect the real economic gain to the government
from an effective road system.
'There is enormous additional economic benefit from the road network,' he said.
'Governments in general aren't investing enough in the road network, and that is
particularly emphasised with Canberra getting the better part of $2 billion directly
from WA motorists and only returning 33 cents in the dollar. When you look at
the challenges of our road network compared to other states, and you look at the
size of our state, it is simply unsustainable for Canberra to refuse to increase the
proportion of motoring taxes they actually return to WA in road funding.'
Heading 1: Why the government should invest more
Heading 2: How much Canberra receives in taxes and fees
D
The funding collected from Western Australia out of road-related taxes will hit
an estimated $3 billion this year, the ACIL Tasman report says, and by 2014-
15, it will be close to $3.5 billion. Over that time expenditure on roads in WA is
projected to fall, not rise.
The picture worsens when you consider that a major source of federal funding
for the 126,000 km of local roads could vanish within two years. About 80 per cent of Australia's roads are owned and maintained by local governments, paid for in
part by property taxes raised by councils, but also through federal grants.
WA Local Government Association President Mayor Troy Pickard estimated
about 27 per cent of the funding for local government roads comes from the
Federal Government, through the Roads to Recovery program and other grants.
But the Roads to Recovery money is due to run out when the program ends in
2014, leaving many routes that are already under-funded in a worse state.
'There are situations across Western Australia where local roads need to be
upgraded and incur higher maintenance costs in order to support the development
of industries, including a range of mining and agricultural activities,' Mr Pickard
said.
'Local governments believe that there is an additional role for the Federal
Government to financially support the upgrade of regionally important local
roads to enable this economic development to occur.'
Heading 1: Projected changes in funding and expenditure
Heading 2: The end of a key program
E
Mr Pickard said this funding should be continued and indexed, so the funds reflect
the real cost of building and maintaining the road network. 'Local governments
recognise that in many areas there is a gap between expenditure on local roads
and the lifecycle cost of maintaining those roads,· he said. 'Unless this gap is
addressed, the quality of local government roads will decline.'
While the Federal Government promises it will put more money into WA
infrastructure in the next few years, this will not come from the $2 billion of
road-related taxes identified in the ACIL report.
Instead, the Commonwealth contribution to projects such as Gateway WA -
the upgrade to the area around the airports, including Tonkin Highway - will be
paid for out of a separate pool of money, called the Regional Infrastructure Fund,
which the Federal Government plans to build with revenue from the proposed
Minerals Resource Rent Tax.
The mining tax, which has not yet been voted on in Federal Parliament, is due
to start 1 July next year. But even this promised pool of cash has been clouded by
tense political relations.
The Federal Government has said that while the money for Gateway WA will
be there regardless of recent moves by WA to increase its royalty taxes, other
infrastructure funding may be in doubt as the state jostles for a better slice of
revenue.
Heading 1: Funding affected by political relations
Heading 2: Sources of funding
F
Mr Brown said that Canberra's failure to invest more in WA roads would ultimately
hurt both the state and national economy. 'Canberra always says that in WA you
have roughly 10 per cent of the population, therefore you get roughly 10 per cent
of the land transport funding,· Mr Brown said. 'That simply ignores the fact that
WA is the growth state for population and economic development and that we are
driving the country's economy.
'If they don't invest in the network, they are cutting their own throats because
it is our state that has helped push Australia through the global financial crisis,
and it is our state that will keep the country growing in the future.'
Heading 1: The proportion of funding WA receives
Heading 2: An engine of economic growth now and in the future
Source: Ruth Callaghan, RAC Horizons Magazine
|
Bình luận