07 August 2013

Tolls...will they drop them?

Tolls...when to drop them by bobmendo
Tolls...when to drop them, a photo by bobmendo on Flickr.
Every three or six months all around Sydney, the government allows the roads and maritime authority to raise the rates and tolls for using the roads. They claim it's all about the rising costs of living. They say it's commensurate with other expenses. I say, it's time to stop the madness.

It's not only that I'm a user of the roads and the tolls. Down in Melbourne they have a prix fixe system, if I understand it right, but their websites are terribly confusing. Still they charge a maximum each day, for cars on all their roads. It's almost an incentive to use the toll roads.

Here in NSW, each time you use a toll road, you pay the toll. There is a discount if you don't use certain roads during peak hours, but no maximum will ever be reached.

I've spoken to transport minister Gladys Berejiklian, and I know she would like to adjust the situation here in NSW, and I hope that this will happen.

I guess today I was encouraged to remind her, and to write this, when I heard the Liberal candidate, Tony Abbott, mention that he intends to lower business taxation from 30% to 28.5% in July 2015. I got excited because it's one of those concepts I'm afraid many in Australia don't understand.

Let me explain, using the toll roads as a prime example.

When the government noticed that not enough people were using the Cross City Tunnel a couple years back, they did what is typical: they raised the prices to gain more revenue. Of course, from whom were they going to receive the increased revenue? From the already-burdened users of the toll road. My suggestion at the time, and it's consistent with Abbott's announcement today, was to lower the toll, not to raise it. As a result, more people would use the toll road; more revenue would be gained and more loyalty would be accrued. In the long run, more money would come to the state's coffers. But it takes patience, doesn't it?

In the same way, when businesses have more capital, given a 1.5% discount on requisite taxes, they will hire more people, funnel more cash into overhead or into inventory, and as a result the state will gain more cash through everyone's taxes.

So I'm taking a lesson from myself. As of 1 September, all prices on our CDs at the Jews for Jesus shop will be lowered, significantly. $30 CDs will now be $25. $25 CDs will be $20. And we will adjust other products in due course. But we have to start somewhere. And help our customers. And help the economy. Seems right, doesn't it?

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