From: ajw@squid.mel.dit.CSIRO.AU (Andrew Waugh)
Subject: Re: The Role of Government
Organization: CSIRO, Division of Information Technology, Melbourne
Date: Thu, 10 Sep 92 23:12:34 GMT

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.

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