From: suter@fawlty8.eng.monash.edu.au (Mr D. Suter)
Subject: Re: The Role of Government
Organization: Monash University
Date: Thu, 10 Sep 1992 23:58:12 GMT

In article <1992Sep10.231234.4713@mel.dit.csiro.au> ajw@squid.mel.dit.CSIRO.AU (Andrew Waugh) writes:
>In article <1992Sep9.210144.1@cc.curtin.edu.au> zrepachol@cc.curtin.edu.au (Paul Repacholi) writes:
>>In article <1992Aug29.085234.15292@metapro.DIALix.oz.au>, bernie@metapro.DIALix.oz.au (Bernd Felsche) writes:
>>> Actually, the road users subsidise other expenditure. Only
>>> about 20% of what's collected in fuel taxes and excise is
>>> used for roads.
>>> 
>>Ah, facts...
>
>It is not a fact; it is a statistic. Like most statistics you see floating
>around it is totally without context. Consequently it is valueless. It
>may support Bernd's contention (that road users subsidise other expenditure);
>or it may be proof of the exact opposite. It all depends on the assumptions
>and decisions of the organisation or person who compiled the statistic.
Rather good list of problems with just quoting a figure deleted.
Reminds me of the recent hoo-ha about the Vic govt ``double-dipping''
into the Pyramid petrol tax: they took a rather large sum out
of the fund (supposedly for re-paying Pyramid investors) as tax
(Stamp Duty). Like many others I was incensed when I first heard this
(particluarly so since I don't think we should be bailing out those
silly/greedy enough to have invested). However, it's rather like
a charity taking a cut to cover costs in collecting and administering
money (with the current state of our finances I think the charity
analogy {_is very apt:-) ). It may seem immoral from the point of
view of the person coffing up thinking ALL the money goes to
a ``good cause'', but such simple minded (emotional) ``thinking''
is clearly wrong since it is impossible to do anything without
meeting other costs. Similar situations occur with research grants
where a significant portion ``evaporates'' in ``on costs''
and infrastructure ``taxes'' including portions that return directly
to the govt. through income tax etc. With all of these factors,
you can chase your tail around producing ``statistics''
that ``show'' how s}iector XXX is being ripped off or how the governments
much touted ``big spending'' to support YYY is really {_an oversell.
d.s.
>
>As an example, let us look at one side of the coin: the fuel taxes and excise.
>
>What excises and taxes does the statistic include? For example, does it
>include the company tax on oil refiners? Is it reasonable to consider
>that all taxes and excise on 'fuel' should be spent on roads? For example,
>royalties paid by the oil producers are effectively the cost of purchasing
>their raw materials (crude oil) from the owners of the resource (the people
>of Australia).
>
>Road vehicles are not the only users of hydrocarbon fuel in Australia.
>Other users are farm and mining machinery, non road transport (such as the
>railways, airplanes, and shipping), and the chemical industry. Does the
>statistic only include the excise and taxes on 'fuel' that road vehicles
>use, or does it include all excise and taxes on 'fuel'?
>
>We do not expect the excise on alcohol to be used to support Elders Brewing,
>nor to support the users of alcohol. Many taxes/excise are simply ways
>of raising consolodated revenue. Should we consider taxes/excise on fuel
>in a different way?
>
>Turning now to the other side of the coin: government spending on roads. It is
>equally unclear what is included in this statistic.
>
>Does it include the spending by all levels of government; federal, state, and
>local? It is limited to the cost of new road works; or does it include
>the cost of maintenance? Does it include all of the anciliary activities
>performed such as the installation, maintenance, and operation of the
>traffic signals? Perhaps most importantly, if Governments have ever had to
>borrow to fund roads, does it include the interest on this debt?
>
>These are all activities which everyone (probably) would agree should be
>included in the 'road cost'. But roads cost the community much more than
>this. How much of this other cost is included in the statistic?
>For example. What about the cost of accidents; both the short term costs
>(police, fire brigade, ambulance, SES) in dealing with the immediate accident,
>the medium term costs (such as health care) and long term costs (such
>as looking after orphans)? What about the cost of traffic police?
>This is even before looking at the more contentious area of costing the
>effects of the pollution caused by cars.
>
>Some or all of these areas may have been included in the magical '20%'
>originally quoted. I am not even suggesting that they all be should.
>But the things included -- and those left out -- must be clearly identified.
>In order to debate the issue rationally the assuptions and decisions used
>to produce a statistic need to be clearly identified so that people can agree
>or disagree with them.
>
>Some years ago, the motoring organisations in Australia ran an advertising
>campaign around a slogan which was something like "The Federal government
>only spends 62% of the money it collects in fuel taxes on new road works." 
>I trust you can see why I found this statistic amusing. But at least,
>by the qualifications, you can make some guesses as to what the motoring
>organisations were leaving out. In that sense it was more honest than the
>"20%".
>
>andrew waugh


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