Road costs vs tax take

steamengine

n97 mini wrote: »

While that's broadly true, IE does receive massive subsidies.

I wonder what the picture would be like if they didn't. I would think there would be very little rail other than commuter services.

Roads cost the Exchequer too - as indeed does the provision and maintenance of all infrastructure. If coach companies had to build and maintain the motorways they run on, their fares would be a lot higher.

n97 mini

Not really comparable as the roads are paid for out of motor tax, and are shared with all the other traffic. I don't know does the entire motor tax take cover the entire roads budget?

Cookie_Monster

n97 mini wrote: »

Not really comparable as the roads are paid for out of motor tax, and are shared with all the other traffic.

no, road are not paid out of the motor tax pot. all taxes are gathered centrally and amounts paid back out to either NRA or local authorities. There is no relation between motor tax income and road spend.

Victor

n97 mini wrote: »

Not really comparable as the roads are paid for out of motor tax, and are shared with all the other traffic. I don't know does the entire motor tax take cover the entire roads budget?

Cookie_Monster wrote: »

no, road are not paid out of the motor tax pot. all taxes are gathered centrally and amounts paid back out to either NRA or local authorities. There is no relation between motor tax income and road spend.

Motor tax goes to the Local Government Fund and is distributed to councils for general spending.

n97 mini

Victor wrote: »

Motor tax goes to the Local Government Fund and is distributed to councils for general spending.

What I should have said is how does the motor tax take compare to the spend on roads. I would think at the moment the take exceeds the spend.

dave_o_brien

n97 mini wrote: »

What I should have said is how does the motor tax take compare to the spend on roads. I would think at the moment the take exceeds the spend.

It's been a while since I last knew the numbers, but traditionally, the cost of roads in Ireland is multiples of the tax take on motor tax and registration fees, and is subsidised by European grants. If our roads were to be funded solely by our taxation, we'd be crippled with huge increases in taxation.

Regardless, motor tax isn't ring fenced, so it's kind of irrelevant. What we do spend on the roads, discounting European funding, is funded by motor tax, income tax, the tax we pay on cigarettes, and sweets, and vegetables, etc.

bk

dave_o_brien wrote: »

It's been a while since I last knew the numbers, but traditionally, the cost of roads in Ireland is multiples of the tax take on motor tax and registration fees, and is subsidised by European grants. If our roads were to be funded solely by our taxation, we'd be crippled with huge increases in taxation.

Actually quiet the opposite, unfortunately I can't find the post but a few months back someone did the maths and found that motor tax plus VRT more then covered the cost of building and maintaining the roads every year.

And that was before you even got into the duties on fuel, etc.

Was a great post, would love to read it again, anyone find it?

dave_o_brien wrote: »

Regardless, motor tax isn't ring fenced, so it's kind of irrelevant. What we do spend on the roads, discounting European funding, is funded by motor tax, income tax, the tax we pay on cigarettes, and sweets, and vegetables, etc.

Not quiet, while it isn't ring fenced, if we had no roads or tax take would be significantly lower. And that is ignoring the obvious point that if we had no roads, we would have no economy either.

This is why this whole argument is stupid. Every country needs roads, there isn't a single country in the world that doesn't have an extensive road and motorway network.

It isn't a question or roads or rail, you have to have roads. Then you build rail in addition to the roads if the roads are congested and aren't capable of carrying the passengers (e.g. London Underground, DART, Luas, etc).

Lets be honest, the only reason why we have an intercity rail network is because the rail network was built and used far before the automobile was invented. But times change and we have to decide if it makes sense to continue to invest in it.

foggy_lad wrote: »

We will never see this information!

Yup, we got a glimpse last year at the numbers via the report into intercity rail travel that IR had commissioned. Great report with many eye opening details, but we are unlikely to see such a report again unfortunately.

Jamie2k9

Actually quiet the opposite, unfortunately I can't find the post but a few months back someone did the maths and found that motor tax plus VRT more then covered the cost of building and maintaining the roads every year.

So if all these costs are covered by the motor tax etc why did the EU give us millions to build roads over the last few years? Every single motorway build after 2006 was part funded by the EU as well as many other road projects.

corktina

Jamie2k9 wrote: »

So if all these costs are covered by the motor tax etc why did the EU give us millions to build roads over the last few years? Every single motorway build after 2006 was part funded by the EU as well as many other road projects.

the obvious answer is that the take from Motor Tax isn't in fact used to build/maintain roads and the comparison of Motor Tax revenue and road costs is just that, a comparison.

Jamie2k9

the obvious answer is that the take from Motor Tax isn't in fact used to build/maintain roads and the comparison of Motor Tax revenue and road costs is just that, a comparison.

If it was taken and put into roads it would still only be a fraction of the money given by the EU. Simple fact is that motor tax and VRT is not enough to maintain and build roads and people who think it is needs a reality check.

corktina

Jamie2k9 wrote: »

If it was taken and put into roads it would still only be a fraction of the money given by the EU. Simple fact is that motor tax and VRT is not enough to maintain and build roads and people who think it is needs a reality check.

well i hope someone finds the post referred to earlier. It's my recollection that the tax take in Motor Tax and VRT far exceeds the cost of building and maintaining roads,,,it's just that this isn't what much of this money is actually used for... it goes into general pots which fund City and County Councils and towards education and Health etc. Whilst I agree that whilst the Motorway building programme was underway, it may not have been enough, the status quo now is entirely different

Jamie2k9

well i hope someone finds the post referred to earlier. It's my recollection that the tax take in Motor Tax and VRT far exceeds the cost of building and maintaining roads,,,it's just that this isn't what much of this money is actually used for... it goes into general pots which fund City and County Councils and towards education and Health etc. Whilst I agree that whilst the Motorway building programme was underway, it may not have been enough, the status quo now is entirely different

Still don't agree as over the last few years people were paying much less car tax because of better fuel efficent cars. Now that has being stopped so less people will be driving on the road and I'm open to correction but the number of cars on the road has being declining yearly. The cost of maintaing roads and opening new roads is far greather than motor tax and VRT will be low as much less people are buying cars at least over the last 2 years.

bk

Yes VRT has dropped significantly, but don't forget most of the road building has now stopped and it is just maintenance now.

VRT is still about 350 million last year (it was over 1 billion at the height of the good times) and VRT is over 1 billion last year.

With little or no road building going on now, 1.4 billion easily covers the maintenance costs. In the coming years VRT and Motor Tax will likely far exceed road building and maintenance.

And don't forget we haven't even factored in duty on fuel.

bk

I've dug up some figures for 2008 and 2009.

2008 construction + maintenance in millions
1361 + 56 = 1,417

VRT + Motor Tax
1121 + 853 = 1,974

2009 construction + maintenance in millions
1213 + 46 = 1,259

VRT + Motor Tax
375 + 835 = 1,210

Remember this doesn't include duty on fuel, VAT, etc.

Jamie2k9

2009 construction + maintenance in millions
1213 + 46 = 1,259

VRT + Motor Tax
375 + 835 = 1,210

You see the 2009 figure if we had the 2010 and 2011 and 2012 figures they would make the same reading as 2009. Maintance costs from 2010 onwords increased with the final phases of new roads opening in 2010 etc.

Duty on Fuel and VAT have nothing to do with maintance or roads etc so no point in adding that in.

monument

A point I've made before: Road costs are far greater than just maintenance and building costs.

Mod voice: Posts split and new thread created.

corktina

Jamie2k9 wrote: »

Duty on Fuel and VAT have nothing to do with maintance or roads etc so no point in adding that in.

why would that be? other than it might prove you wrong of course. VAT fuel duty VRT Motor Tax all are income streams from motoring, none of which directly fund road maintenance or building

L1011

Jamie2k9 wrote: »

So if all these costs are covered by the motor tax etc why did the EU give us millions to build roads over the last few years? Every single motorway build after 2006 was part funded by the EU as well as many other road projects.

Untrue. Most road schemes since 04 got not one cent from Europe. Ndp1 was 2% funded and ndp2 not at all.

Most eu funding was in the 90s and often for roads we've since replaced

Bruthal

Jamie2k9 wrote: »

If it was taken and put into roads it would still only be a fraction of the money given by the EU. Simple fact is that motor tax and VRT is not enough to maintain and build roads and people who think it is needs a reality check.

Well if you take all the taxes that are accumulated from driving on the roads, it adds up to a far higher amount than just the motor tax. One fill of 70 litres of petrol pays probably €50 or €60 tax alone, or more. Tax only paid due to driving on roads.

This stuff about motor tax not being used on roads, its like saying a neighbour smashed my living room window, but I "ringfenced" the actual money he gave me to repair it, towards a new tv. The neighbour still paid toward my window, which he damaged.

steamengine

I seem to recall many times on programmes such as 'Primetime' etc. politicians emphasising that road tax was fed into a central fund and bore no relation to road maintenance, except in name. It's probably fair then to look upon it as just another of the myriad of tax raising measures which pays for everything, including at present interest to service the massive national borrowings.

My main point as amply demonstrated by the 1 Billion approx., roads maintenance figure is that it simply puts the annual rail subsidy into perspective ie. - All infrastructure costs money to maintain - !!!

Usually then that is countered by - " Well I don't use the railway, why should I pay for it through my taxes " ?. Good point but then the millions of dedicated rail passengers can make the same point about the roads !!! They pay income tax, VAT, property tax etc. and are enabled to do so by using that mode to get to work.

Bruthal

Jamie2k9 wrote: »

Duty on Fuel and VAT have nothing to do with maintance or roads etc so no point in adding that in.

Of course it can be added in. It does not matter if our leaders use it to furnish their own homes or whatever they spend it on, fuel tax is paid by road users for driving on roads. Roads cost money to maintain.

If we did not drive on the road, we would not pay it, nor would roads need maintenance.

bk

steamengine wrote: »

]

Usually then that is countered by - " Well I don't use the railway, why should I pay for it through my taxes " ?. Good point but then the millions of dedicated rail passengers can make the same point about the roads !!! They pay income tax, VAT, property tax etc. and are enabled to do so by using that mode to get to work.

The difference is that 99% of freight is carried by road.

So even if you never leave your house, all the goods and groceries you buy are delivered by road and you receive a benefit of it.

The reality is absolutely everyone uses roads. I don't own a car, yet I get Dublin Bus and intercity buses, I get taxis from time to time, I walk on the footpath, I cycle on the road, my Superquinn deliveries come by lorry on the road, an post deliver post and packages by road.

99% of train users will use a road to get to and from it.

On the other hand many people might never use or benefit from rail even once during the year. Specially if you exclude DART/LUAS *

* Even if you don't use DART/LUAS you might still indirectly benefit from reduced congestion. No such argument exists for intercity rail, there is little congestion on the intercity motorways.

It is a silly argument. Roads are absolutely vital, you can't operate an economy without them. Rail on the other hand is optional. Rail maybe a very good idea in certain circumstances (e.g. mass transit in cities), but it is built as an add on to roads, not instead of.

Thus any talk of building roads versus rail is a silly argument.

steamengine

bk wrote: »

The difference is that 99% of freight is carried by road.

So even if you never leave your house, all the goods and groceries you buy are delivered by road and you receive a benefit of it.

The reality is absolutely everyone uses roads. I don't own a car, yet I get Dublin Bus and intercity buses, I get taxis from time to time, I walk on the footpath, I cycle on the road, my Superquinn deliveries come by lorry on the road, an post deliver post and packages by road.

99% of train users will use a road to get to and from it.

On the other hand many people might never use or benefit from rail even once during the year. Specially if you exclude DART/LUAS *

* Even if you don't use DART/LUAS you might still indirectly benefit from reduced congestion. No such argument exists for intercity rail, there is little congestion on the intercity motorways.

It is a silly argument. Roads are absolutely vital, you can't operate an economy without them. Rail on the other hand is optional. Rail maybe a very good idea in certain circumstances (e.g. mass transit in cities), but it is built as an add on to roads, not instead of.

Thus any talk of building roads versus rail is a silly argument.

Did you not notice in the recent budget that the taxpayer is now subsidising road freight via a diesel rebate? There is no need for an argument for Intercity rail - it's part of a modern first world country's infrastructure - simples.

As regards Road - Rail, to reiterate, this poster is advocating 'and' not 'versus' !!! Each has its place.

bk

steamengine wrote: »

As regards Road - Rail, to reiterate, this poster is advocating 'and' not 'versus' !!! Each has its place.

But that is the conversation here, road pays for itself (via motor tax, vrt, fuel duty, etc.), rail doesn't pay for itself, it requires a very large running subsidies plus large capital grants.

Road is a net benefit to the economy (they earn more then they cost to build and run), rail is a net deficit to the economy (they cost more to build and run then they make).

n97 mini

steamengine wrote: »

Did you not notice in the recent budget that the taxpayer is now subsidising road freight via a diesel rebate?

Collecting less tax does not amount to a subsidy.

Victor

bk wrote: »

And that was before you even got into the duties on fuel, etc.

I'm not sure if that is valid.

Duties on fuel don't exist to fund roads, but to discourage wasteful fuel usage and shocks to the economy by changes in the price of oil.

bk wrote: »

VRT is still about 350 million last year (it was over 1 billion at the height of the good times) and VRT is over 1 billion last year.

Is that a bit mixed up?

Bruthal

Victor wrote: »

I'm not sure if that is valid.

Duties on fuel don't exist to fund roads, but to discourage wasteful fuel usage and shocks to the economy by changes in the price of oil.

It really doesn`t matter what it is said the fuel duty is for. It is still revenue that is collected from using vehicles on the roads.

If roads cost money to maintain, and using them generates money, it is probably not too bad a thing to compare cost v revenue obtained, even if the money is not directly paid to the upkeep of roads.

Victor

Bruthal wrote: »

If roads cost money to maintain, and using them generates money, it is probably not too bad a thing to compare cost v revenue obtained, even if the money is not directly paid to the upkeep of roads.

To a large degree, it is an academic exercise of marginal merit. Importantly motorists also use other government services and transfer costs to other parts of society.

Counting only the costs of construction and maintenance is rather selective as it doesn't take into account costs in policing, health, education, environment, etc. that are related to roads.

Traffic collisions have cost in the order of 1% of GNP.

Bruthal

Victor wrote: »

Importantly motorists also use other government services and transfer costs to other parts of society.

All of society benefits from the roads though, not just people who drive on them.

But people who drive on them, pay a hefty enough chunk of tax for doing so. And fuel duty, no matter what its claimed its function is, is part of that tax paid for driving on the road.

CIE

Bruthal wrote: »

All of society benefits from the roads though, not just people who drive on them

Socialistic argument. I do not benefit directly or indirectly from roads I do not use (whether driving, biking or walking) or that does not host vehicles that carry goods directly to me or to local businesses that I frequent. Yet I am not exempt from funding these roads, and that is whether I drive or not. It's a good thing I don't have to fund the air that carries planes and helicopters, or water that carries cargo vessels, on a per-cubic-metre basis...

bk

CIE wrote: »

Socialistic argument. I do not benefit directly or indirectly from roads I do not use (whether driving, biking or walking) or that does not host vehicles that carry goods directly to me or to local businesses that I frequent. Yet I am not exempt from funding these roads, and that is whether I drive or not. It's a good thing I don't have to fund the air that carries planes and helicopters, or water that carries cargo vessels, on a per-cubic-metre basis...

Well you do indirectly, the entire economy only operates because of those roads. If other people can't get to their farm, school or jobs then the whole economy would collapse and you would starve.

Also you have no idea which roads the goods you buy used to get to your local shop. A weekly shop probably contains items that have used every major road in Ireland.

Lets be honest here, if there was a natural disaster tomorrow and all the intercity roads were closed, we would be in very serious trouble. On the other hand if the intercity rails closed, you would barely notice it.

I'm not saying rail doesn't have a value, but in a country of the size and demographics of Ireland, it is relatively small compared to road.