Re: Affect of GST on Rail.

[mauried@commslab.gov.au (Maurie Daly)]

In article <389f723f@news.iprolink.co.nz> David McLoughlin <davemcl@AXE*THISiprolink.co.nz> writes:
>Date: Tue, 08 Feb 2000 14:32:48 +1200
>From: David McLoughlin <davemcl@AXE*THISiprolink.co.nz>
>Subject: Re: Affect of GST on Rail.

>Maurie Daly wrote:
> 
>> Noticed recently whilst looking at ARTCs track access charges that all the
>> current charges dont include GST.
>> I presume that this means that after 1 July all track access charges will
>> include GST and therefore rise by 10%.
>> Given that Rails competitors , namely road dont pay an equivalant road usage
>> charge,this would surely mean that rails competetiveness will fall further
>> behind again.
>> Or am I missing something.?


>How does road transport pay its share of road costs in Australia?

Thats an easy one , it doesnt.

>Here in NZ, where GST was invented, road transport pays a
>weight-distance based "road user charge" which is calculated from a
>meter on the truck/bus axle (a hubodometer it is called).

Yes this is how some people would like to see trucks charged in Australia.
Sadly theres no likelyhood of this happening in the near future,unless we get
a totally new breed of politicians who arnt pro road.

>GST applies on top of the road user charge. It also applies on top of
>fuel costs.

>There is no track access charge here as the stupid government flogged
>our profitable rail system off train, track and carriage so Tranzrail
>has exclusive access to the track  (the track beds remain in state
>ownership but at a peppercorn rental of $1 a year in perpetuity).
>However Tranzrail has to pay the full cost of track upkeep itself.
>Trucks here still do not pay anything like the full cost of the damage
>they do to the roads. That is born by private motorists (whose cars do
>little damage to the roads) who pay a hefty excise tax on petrol (about
>half the cost of petrol here of 97c a litre for unleaded 91).

Here Railways have to pay quite steep track access charges which will
presumably subject to the GST when its introduced,which means that rails costs
go up dramatically,but the cost for road users changes very little,(since the 
major cost for road users is fuel,which wont change.)

Theoretically the Railways could try to pass the increased costs onto their 
customers,but one wonders how long they would then have any customers
given that the customers could switch to road where the costs wont change.

>GST is a value-added tax 
where each link in the sale chain deducts the>value of GST on its purchases 
and pays it on its sales, with the full>tax in effect being only paid by the 
(retail) end user.



>David McLoughlin
>Auckland New Zealand


MD