Planning Bureau: ‘road-pricing can save up to 2,3 billion a year’
The road-pricing discussion is here to stay. This time it’s the Belgian Federal Planning Bureau (Planbureau) publicizing a new study on Friday. If taxes on transport would better correlate with congestion and environmental costs, this could save up to 2,3 billion euros every year.
Road-pricing was in the planning of the Flemish government until recently. The biggest Flemish political party, N-VA, changed course abruptly after being attacked on these plans by other parties just before the elections. In the current negotiations for a new government, the topic is emerging again, but nobody wants to communicate about it.
The current taxes on transport have become completely irrealistic, says the Planbureau. So-called flat taxes on car use don’t reflect real usage costs. The government subsidizes public transport and company cars highly.
It’s a disruption of the market which costs 900 million euros a year, while the time lost due to congestion amounts to 1,3 billion euros. The remaining 100 million is the (underestimated?) price for the pollution caused.
The polluter pays
While all car users pay practically the same taxes, the cost differs sharply according to time and place. A car driving during peak hours in and around Brussels costs much more than, for example, one between Ieper and Diksmuide.
In cities, like Antwerp and Brussels, the costs caused by car users are exceeding by far the taxes they pay. In rural areas, it’s the opposite. That’s why the Planbureau proposes a tax shift. It suggests a fundamental change where all external costs are paid for by the user/polluter.
It’s an extreme scenario where all subsidies for public transport and company cars also disappear. This would save 8,7 billion euros to the treasury. One of the consequences would be that the use of public transport would decrease sharply (-48% in 2024).
At the moment the train commuter is subsidized on average for 65,7% on transportation costs — the driver of a company car for 55,1%, the average train passenger for 44,5%.
“A radical change like this is politically unrealistic,” says Alex Van Steenbergen, co-author of the study. The study wants to indicate a direction. In the short term, less radical changes are preferable. A smart city toll, for example, in and around Brussels or Antwerp. The toll would be compensated in the car taxes.
“But this requires good coordination between regional authorities,” Van Steenbergen continues. A modest tax-shift like this one would already give substantial savings, the Planbureau thinks. Because it spreads traffic, there wouldn’t be less traffic nevertheless, so the effects on the environment and climate would be small.