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VEHICLE REGISTRATION INITIATIVES Discussion Paper Proposals for light vehicle registration reform in NSW
VEHICLE REGISTRATION INITIATIVES
Vehicle Registration Initiatives
Discussion Paper
Proposals for light vehicle registration reform in NSW
Disclaimer
ISBN: 978-1-922030-70-2
While every reasonable effort has been made to
Copyright notice
ensure that this document is correct at the time of
© State of New South Wales through the Director printing, the State of NSW, its agents and employees,
General of Transport for NSW, 2014. disclaim any and all liability to any person in respect
Transport for NSW of anything or the consequences of anything done or
18 Lee Street omitted to be done in reliance upon the whole or any
Chippendale NSW 2008 part of this document.
2
VEHICLE REGISTRATION INITIATIVES
CONTENTS
FOREWORD 2
THE PURPOSE OF THIS DISCUSSION PAPER 3
1. EXECUTIVE SUMMARY 4
2. THE CURRENT NSW VEHICLE REGISTRATION SYSTEM 10
3. THE NEED FOR REFORM 19
4. REFORMS TO PASSENGER VEHICLE REGISTRATION CHARGES 23
5. STAMP DUTY FOR PASSENGER VEHICLES 36
6. COMPULSORY THIRD PARTY (CTP) INSURANCE
FOR PASSENGER VEHICLES 37
7. REFORMS TO MOTORCYCLE REGISTRATION CHARGES 39
8. REFORMS TO LIGHT TRAILER AND CARAVAN
REGISTRATION CHARGES 46
9. PROVIDING A CONTINUOUS REGISTRATION OPTION 50
10. OPTIONS TO IMPROVE OTHER REGISTRATION PROCESSES 54
11. RELATED REFORMS AND PRELIMINARY CONSULTATION 58
12. HAVE YOUR SAY 61
13. APPENDICES 62
14. ENDNOTES 67
1
VEHICLE REGISTRATION INITIATIVES
FOREWORD
This Vehicle Registration Initiatives Discussion
Paper has been developed to enable you
to have your say on the future of vehicle
registration in NSW.
The Discussion Paper outlines proposals and
options to: improve light vehicle registration
and management in NSW; improve vehicle and
road safety; promote positive environmental
outcomes; and enhance customer service
through more equitable and flexible
registration arrangements.
The NSW Government is committed to
promoting safer vehicles and environmentally These reforms build on the NSW Government’s
responsible behaviours. The risk of death or decision to abolish registration labels for light
serious injury in a crash is much higher in older vehicles from 1 January 2013. Removing labels
vehicles, which generally have fewer safety simplified the registration process, reduced red
features. Vehicle safety technologies are tape and saves the community, businesses and
continually improving and being incorporated the government time and money.
by manufacturers to create safer vehicles, with
a positive effect on road safety. It is important The decision to abolish labels was made
to continue this momentum by promoting the after a rigorous review process that included
uptake of safer new vehicles and motorcycles community and stakeholder consultation; this
through registration incentives. Discussion Paper is part of a similar process
for proposed vehicle registration changes. The
A further aim of changing the structure of NSW Government is committed to consultation
registration charges is to help consumers about proposals that will improve government
understand the impact of their vehicle choice services and customer interactions. It is
on the environment and encourage the important for the government to seek and
purchase of greener vehicles. Environmental understand the views of stakeholders and
damage is a pressing NSW and global issue and the community to ensure that the proposed
everyone needs to play their part in reducing changes are practical and workable.
our vehicle emissions. This is why we are
encouraging people to choose environmentally I encourage you to provide feedback on the
sound vehicles that will deliver longer term proposals in this Discussion Paper to assist the
environmental benefits to the community. NSW Government in shaping a positive future
for vehicle registration policies in NSW.
Changes are also proposed to improve the
equity of caravan and light trailer charges.
The proposed changes to registration charges
are combined with improvements to the way Duncan Gay
vehicle owners can pay for vehicle registration. Minister for Roads and Freight
Offering continuous pay by the month
registration will increase the convenience and
affordability of registration and the range of
services available to customers.
2
VEHICLE REGISTRATION INITIATIVES
THE PURPOSE OF THIS DISCUSSION PAPER
Transport for NSW (TfNSW) invites members of How to provide your feedback
the public and other stakeholders to comment
Throughout this Discussion Paper you will see
on a range of options to improve light vehicle
a number of questions that highlight key areas
registration and management in NSW. Light
where TfNSW is seeking feedback. You may also
vehicles have a gross vehicle mass (GVM) up
want to submit other questions or comments
to 4500 kilograms (4.5 tonnes). They include
that come to mind as you read the paper.
passenger vehicles, motorcycles, caravans, light
trailers and some light trucks and buses. Copies of the Discussion Paper are available
online at the Transport for NSW Community
The primary aim of the proposed reforms is
Engagement website (transport.nsw.gov.au/
to improve road safety and environmental
engagement). If you do not have access to the
outcomes by raising awareness and
internet, and would like a printed copy mailed to
encouraging the uptake of safer and
you, please call 13 22 13.
greener vehicles.
You can submit your feedback by:
The reforms also aim to:
•• Email: VRI@transport.nsw.gov.au
•• Improve registration charging equity across
the vehicle fleet •• Mail:
Registration Policy
•• Provide customers with more flexible
Transport for New South Wales
registration payment arrangements, and
PO Box K659
•• Provide a flexible registration framework Haymarket NSW 1240
to accommodate rapidly changing vehicle
•• Online: transport.nsw.gov.au/engagement
technologies and transport needs.
TfNSW welcomes all comments, whether they
The reforms do not apply to:
are a brief email or a substantial submission.
•• Heavy vehicles and trailers with a GVM of
All or part of your submission may be quoted or
more than 4.5 tonnes. These vehicles are
made publicly available. If you do not want your
covered by current and proposed national
personal details or any part of your submission
model law and the National Heavy Vehicle
to be released, please indicate this clearly in
Regulator, or
your submission.
•• Conditionally registered vehicles.
The closing date for submissions is 24 July 2014.
3
VEHICLE REGISTRATION INITIATIVES
1. EXECUTIVE SUMMARY
TfNSW considers that there are a number of There will be no net reduction in all light
opportunities to modernise and improve the vehicle revenues, including revenue allocated
registration system and is proposing a range of to the Roads Program, as a result of these
Vehicle Registration Initiatives (VRI). The VRI reforms. Roads Program revenue is used to
reforms propose to utilise registration fees as a fund and maintain road infrastructure and road
proactive policy tool to improve vehicle and road safety initiatives.
safety, and environmental outcomes. Current
vehicle registration policy in NSW includes several
long-held criteria. It is based on the principles that 1.1 The purpose of vehicle
vehicle registration charges must be determined by registration charges
a vehicle’s weight; that registration periods must be Originating in 19141, vehicle registration charges
for specific, set periods of time; and that registration were designed to pay for the damage vehicles
must be actively renewed if it is to continue. made to roads. NSW light vehicle weight tax
These principles have provided a dependable is currently charged according to the tare
registration system but in the modern transport weight of a vehicle. Charges are determined
environment they are increasingly outmoded. by irregular weight bands for light passenger
vehicles, caravans and some trailers. An
Charging registration on the basis of vehicle
identical flat fee applies for all motorcycles and
weight dates back to 1924. In recent years
scooters.
particularly there has been increasing community
concern about environmental outcomes and Under NSW legislation, all revenue from
increases in fuel costs as well as the introduction motor vehicle weight tax is directed to the
of modern safety technologies and alternative Roads Program. Approximately 5.5 million
fuels. Currently, any consideration of registration light vehicles are registered in NSW2 and light
charges when purchasing a vehicle is limited to a vehicle weight tax contributes approximately
price comparison based on weight. Registration $1.66 billion3 in revenue a year.
charges do not offer a direct incentive to choose
In addition to registration charges, NSW vehicle
a safe and environmentally sound vehicle.
registration requirements include:
Similarly, the policy of specific registration
•• Regular safety inspections for most vehicles
terms and over-the-counter registration
over five years of age
renewals pre-dates the internet and automated
payment options. •• Compulsory Third Party (CTP) bodily injury
insurance, and
The primary aim of the proposed VRI reforms
is to improve road safety and environmental •• Payment of stamp duty, where applicable,
outcomes by raising awareness and when registrations are established
encouraging the uptake of safer and greener or transferred.
vehicles. The reforms also aim to:
While the primary purpose of this Discussion
•• Improve registration charging equity across Paper is to describe proposals to improve
the vehicle fleet vehicle registration policy, it also briefly outlines
additional options to reform related registration
•• Provide customers with more flexible
costs such as stamp duty and CTP insurance.
registration payment arrangements, and
•• Provide a flexible registration framework
to accommodate rapidly changing vehicle
technologies and transport needs.
4
VEHICLE REGISTRATION INITIATIVES
1.2 Passenger vehicles 1.3 Stamp duty and
TfNSW proposes to reconfigure the current Compulsory Third Party
light passenger vehicle registration charge (CTP) insurance
from one that is based solely on weight to a Stamp duty is collected on behalf of the Office
charging framework that incorporates and of State Revenue (OSR) by Roads and Maritime
provides incentives for higher vehicle safety and Services (RMS). In most cases, it must be paid
environmental criteria. Initiatives to improve when a vehicle is registered for the first time or
road safety and environmental outcomes align registration is transferred. It is proposed that
directly with key NSW Government, Federal the stamp duty charge, which is currently based
Government and international priorities in solely on the value of a vehicle, be reconfigured
these areas. to also take into account vehicle safety and
environmental criteria.
Vehicle safety may be determined via the
Australasian New Car Assessment Program CTP insurance (a ‘green slip’) is required for all
(ANCAP) safety ratings system. A vehicle’s NSW vehicles before they can be registered.
environmental credentials may be determined CTP insurance provides medical and other
using CO2 emissions and air pollution data financial assistance for people injured in a
sourced from the Federal Government motor vehicle accident in NSW. CTP insurers
administered Green Vehicle Guide (GVG). are regulated by the Motor Accidents Authority
(MAA), which licenses insurers to provide NSW
The vehicle weight component of the
CTP insurance.
registration charge is proposed to be a
combination of a base fee and a cost per The MAA is responsible for the development
kilogram weight charge. The cost per kilogram of CTP insurance premium guidelines and
calculation would be based on the standard has indicated that it will consider the inclusion
tare weight of the vehicle as reported by the of vehicle safety criteria within these guidelines,
vehicle manufacturer. This would ensure precise which may enable insurers to take into
charging for all new vehicles. account a vehicle’s safety rating as a factor
in premium pricing.
Under the proposed registration charging
framework, a new light passenger vehicle with The inclusion of safety and environmental
higher safety and environmental credentials criteria within stamp duty and CTP insurance
would cost less to register than another new charges would provide additional financial
vehicle of similar weight that has lower safety incentives for the purchase of safer vehicles.
and environmental credentials.
The following diagram provides an overview
These reforms to light passenger vehicle of the current and proposed registration costs
registration are initially being proposed for for passenger vehicles.
all new passenger vehicles, with reforms to
second-hand vehicles proposed a number of
years later to enable customers to plan ahead
and be aware of any potential upcoming
changes to second-hand vehicle registration
charges. The reforms will not be retrospective.
5
VEHICLE REGISTRATION INITIATIVES
Figure 1 – Current and proposed vehicle charges
6
VEHICLE REGISTRATION INITIATIVES
1.4 Motorcycles In addition, it is proposed that motorcycle
registration charges also include a weight
All motorcycles are currently charged the same
component made up of a base fee and a cost
flat fee (weight tax) of $58. While this charging
per kilogram weight charge. The cost per
framework provides a simple registration
kilogram calculation would be based on the
system, there are no direct pricing incentives to
standard tare weight of the motorcycle as
choose safer motorcycles and the same charge
reported by the motorcycle manufacturer.
applies to small scooters and to larger touring
motorcycles and superbikes. These reforms would initially apply to new
motorcycles only with reforms to second-hand
While there are currently no ANCAP ratings
motorcycles proposed a number of years later
available for motorcycles, the NSW Centre for
to enable customers to plan ahead and be
Road Safety has advised that Anti-lock Braking
aware of any potential upcoming changes to
Systems (ABS) can significantly improve
second-hand motorcycle registration charges.
motorcycle and rider safety. Australian and
The reforms will not be retrospective.
international research concludes that the risk
of being involved in a fatal motorcycle crash Australian regulations do not require emissions
is related to increasing power to weight ratios, testing for motorcycles to demonstrate their
regardless of rider age or experience. compliance with Australian Design Rules (ADRs).
In the absence of reliable emissions information,
To encourage the purchase of safer
TfNSW has not proposed an environmental
motorcycles, TfNSW proposes that ABS and
component within motorcycle registration charges.
power to weight ratios be considered as options
for registration charging criteria. The following diagram provides an overview
of the current and proposed registration costs
for motorcycles.
Figure 2 – Current and proposed motorcycle charges
7
VEHICLE REGISTRATION INITIATIVES
1.5 Caravans and light trailers This new charging method would reduce the
charges that many light trailers and caravans
Caravans and light trailers weighing 255kg and
currently pay by a range of approximately 5%
above currently pay approximately the same
to 45% (private usage, depending on the weight
weight tax rates as light passenger vehicles but
of the light trailer or caravan) to reflect the less
they are often used on the road less frequently.
frequent use of these vehicles.
The 536,000 light trailers weighing less than
255kg currently pay no weight tax. These are It is proposed that the changes to light trailer
the only registrable vehicles in NSW that are not and caravan registration charges be applied
subject to weight tax. By comparison, a scooter to the entire fleet to improve registration
weighing 100kg (such as the Honda NSC110) charging equity.
currently pays $58 in weight tax.
The following diagram provides an overview
In line with the proposal for passenger vehicles, of the current and proposed registration costs
it is proposed that light trailer and caravan for light trailers and caravans.
registration weight charges be made up of a
base fee and a cost per kilogram weight charge.
The cost per kilogram calculation would be
based on the tare weight of the light trailer
or caravan as reported by the manufacturer.
These charges would also apply to light
trailers weighing less than 255kg which are not
currently subject to weight charges.
Figure 3 – Current and proposed caravan and light trailer charges
8VEHICLE REGISTRATION INITIATIVES
1.6 Continuous registration TfNSW considers that effective ELV policies
have the potential to provide a range of vehicle
To improve the convenience and affordability
safety, environmental and consumer protection
of registration and provide additional choice
benefits. TfNSW has therefore provided initial
to customers, TfNSW proposes an automated,
options for future ELV policy including the
continuous registration option via a secure
provision of incentives to vehicle owners and
online monthly direct debit or credit facility.
recyclers who responsibly dispose of ELVs.
This would effectively provide vehicle
registration with no expiry date, provided that
ongoing payments were received. 1.8 Discussion Paper format
The Discussion Paper provides an explanation
1.7 Options to improve other of the current registration system and then
registration processes highlights the proposed reforms for each
vehicle type and areas where specific feedback
Through this Discussion Paper, TfNSW also
is sought. The Discussion Paper also highlights
seeks feedback on vehicle inspections and the
key areas of feedback received so far. Ideally,
management of end of life vehicles (ELVs).
the Discussion Paper should be read in whole
Vehicle inspections are a key component of but readers who may only be interested in a
the registration system as they ensure the specific vehicle type (e.g. passenger vehicles)
roadworthiness of vehicles. However, vehicle may not find the chapters on other vehicle
safety and environmental technologies have types as relevant.
advanced, with increasing numbers of vehicles
incorporating features that may warrant
additional or unique testing and inspection.
Inspection intervals for particular vehicle types
may need to be assessed within this context.
9VEHICLE REGISTRATION INITIATIVES
2. THE CURRENT NSW VEHICLE REGISTRATION SYSTEM
2.1 An overview of NSW 2.4 How is vehicle
vehicle registration registration governed?
This section is an overview of the current The registration of vehicles in NSW is governed
NSW vehicle registration system, including by the Road Transport Act 2013 and the Road
information about the current light vehicle fleet, Transport (Vehicle Registration) Regulation
registration requirements and registration costs. 2007. The Motor Vehicles Taxation Act 1988
It provides the background for the proposals in sets out the tax payable for the registration
this Discussion Paper. of motor vehicles and provides for annual
Consumer Price Index (CPI) indexation of motor
vehicle taxation.
2.2 Why are vehicles
registered? The Minister for Roads and Freight has
oversight and responsibility for this legislation
Registering vehicles enables the NSW
and for the vehicle registration system.
Government to:
TfNSW is the lead agency responsible for
•• Identify the registered operator of each
developing strategic road transport policy
vehicle using road or road related areas
and legislative initiatives, including strategic
•• Enforce traffic and other laws registration policy.
•• Collect funds to sustain the road system RMS is responsible for administering the
registration system and maintaining a register
•• Contribute to road safety by ensuring
of registrable vehicles in accordance with the
vehicles on the roads meet safety standards,
above Acts and Regulations.
and
•• Insure against third party injury or loss due
to motor accidents.
2.5 Key characteristics of
the current NSW light
vehicle fleet
2.3 When did vehicle There are approximately 5.5 million light
registration begin? vehicles (including passenger vehicles,
NSW Governor Macquarie introduced motorcycles, caravans and trailers) registered
registration for carts and wagons in 1813. The in NSW.
Motor Traffic Act 1909 introduced “licensing”
Within this fleet there are approximately
requirements for motor vehicles.
4.5 million passenger vehicles, 184,000
Vehicle registration charges (based on vehicle motorcycles (including scooters and mopeds)
horsepower) were introduced in 1914 to offset and 815,000 caravans and light trailers.
the costs of road deterioration and the Motor
The average age of the passenger vehicle fleet
Vehicles (Taxation) Act was introduced in 1916.
is approximately 10 years and new passenger
Charging registration on the basis of a vehicle’s
vehicle registrations account for approximately
weight commenced in 1924.
6.5% of the total passenger vehicle fleet
The annual registration label scheme began in each year.
1932. In 1937, vehicle number plates with letters
The following graph details key features of the
and numbers replaced the earlier numerical
NSW light vehicle fleet.
sequences. In 1939, the Commissioner for Motor
Transport introduced compulsory mechanical
inspections before registration.
10VEHICLE REGISTRATION INITIATIVES
Figure 4 – NSW light vehicle fleet as at December 2011
2.6 Funding the road network: The major component of light vehicle
NSW light vehicle registration costs is motor vehicle weight
tax which is based on the tare weight of a
weight tax vehicle. A registration administration fee is
Road funding is directed to ensure safe also charged. The weight tax component and
access to roads, minimise road deterioration the administration fee are adjusted annually
and rebuild damaged roads. Road funding based on the CPI. An average sized vehicle
is also used for maintaining and operating (e.g. Toyota Corolla) is currently charged $277
traffic signals, street lights, bridges, tunnels, weight tax, while a larger family sedan (e.g.
line markings, pavement markers, guide and Holden Commodore) is charged $422. The
regulatory signs, electronic variable message administration fee is currently $60.
and speed signs and CCTV cameras to monitor
traffic conditions. All vehicle operators should Under NSW legislation, all revenue from motor
contribute to the availability of the road network vehicle weight tax in NSW is directed to the
for vehicle use and for preventative treatments Roads Program. It is used to fund road safety
and repairs related to wear and tear. initiatives, improve traffic management and
fund development and maintenance of the
road network. This is not the case in other
jurisdictions. Therefore, there can be differences
11VEHICLE REGISTRATION INITIATIVES
in light vehicle registration charges between 2.8 Current registration
states as a result of their different fiscal policies
requirements
and funding arrangements.
Notification of registration renewal is posted
Light vehicle weight tax contributes to the vehicle’s registered operator six weeks
approximately $1.66 billion each year to the prior to the registration expiry date. A reminder
Roads Program and plays a crucial role in notice is sent two weeks after the registration
maintaining the NSW road network. The NSW expiry if registration has not been paid. In
Government also contributes more than $1 addition to paper based renewal and reminder
billion each year through consolidated funds notices, in May 2013 RMS introduced an email
and the Australian Government contributes and SMS registration notification and reminder
approximately $1.5 billion. More than 75% of service, for customers who have an online
the roads budget is allocated to rural and RMS account, to act as a further reminder that
regional roads. registration is due.
The management of the road network in NSW CTP bodily injury insurance (a green slip)
is shared between the State Government is required for most light vehicles before
(through RMS) who manage state roads and registration can be established or renewed.
Local Government (through local councils)
Most light vehicles over five years of age also
who manage regional and local roads.
require an annual Safety Check inspection.
RMS expenditure for 2012-13 consisted of
Current fees for these inspections range from
approximately $2.2 billion for infrastructure
$21.60 to $36.40.
growth and improvement, $1.5 billion for
asset maintenance and $1.4 billion for services RMS acts as an agent for the OSR to collect
and operations.4 stamp duty, where applicable, when light
vehicle registrations are established or
transferred. The registration charges can be
2.7 Registration paid to RMS:
administration fees
The current registration administration fee •• Online using credit card or BPAY via
is $60. This fee is applied to all registration myRTA.com
transactions, including registration •• By cash, credit card or EFTPOS in person
establishment and RMS registry or Service at an RMS registry or Service NSW Centre
NSW Centre and online registration renewals.
Eligible customers are exempt from paying •• By post to RMS, or
the administration fee. A pro-rata rate of the •• Through the Rego App for iPhone
administration fee is applicable for short term (see below).
registration renewals. A transfer fee of $30 is
payable when a vehicle registration is being To increase the availability and accessibility of
transferred to a different person or corporation. registration information to businesses and the
general public, RMS has released a Rego App
Registration administration fees contribute for the iPhone. The app has the same features
approximately $350 million a year to as the free registration check service currently
Consolidated Revenue. 5 This fund collects available on the RMS website and customers
the public revenue that is used to fund core can also renew their vehicle registration through
government services, including RMS services. the app.
12VEHICLE REGISTRATION INITIATIVES
Both services provide the public with access to 2.9 Statutory charges for
the following information about a vehicle:
new vehicles
•• Whether the registration is current, There are a number of costs involved when
suspended or cancelled purchasing a new vehicle. The main cost is
the vehicle itself. Then there are the costs of
•• The registration expiry date
getting the vehicle registered and insured,
•• Whether there are registration restrictions on which include registration, stamp duty and CTP
the vehicle (for example registration renewal, insurance. These are known as ‘statutory’ or
transfer or establishment restrictions) ‘government’ charges.
•• Whether there are registration concessions
New registration
on the vehicle, and
The Minister for Roads and Freight has
•• The CTP insurance expiry date. responsibility for the registration scheme.
Vehicles registered for business purposes pay If a person buys a vehicle that has never been
60% higher registration charges than those registered in NSW, they need to apply for a
registered for private use. new registration with RMS. The current cost
of registration is based on the tare weight of
Concessions on registration charges apply
the vehicle, how it is used (private or business
for eligible pensioners who have a concession
use) and a registration administration fee. Total
card issued by Centrelink or the Department
light vehicle weight tax revenue for the 2012/13
of Veterans’ Affairs (DVA) that shows a NSW
financial year was approximately $1.66 billion.6
address. The pensioner concession scheme
applies to one vehicle per eligible pensioner.
Stamp duty
Registration concessions and rebates are The Treasurer is responsible for tax policy
available to other eligible customers, including: and the Minister for Finance and Services has
responsibility for the stamp duty scheme.
•• Primary producers
Stamp duty is a once-only cost paid when a
•• First and second year apprentices registered
vehicle is registered in NSW for the first time
with the NSW Department of Education
or if registration is transferred to a different
and Communities
person or corporation. It is collected by RMS on
•• Charitable organisations, and behalf of the OSR. Stamp duty is based on the
market value of the vehicle or the price paid for
•• Emergency and rescue services.
the vehicle, whichever is greater. Stamp duty is
Registration can only be renewed up to three currently calculated at:
months after the expiry date. If registration is
•• 3% of the market value up to $45,000, and
not renewed during this time, it is cancelled and
the vehicle must be re-registered. •• 5% on the value over $45,000.
The standard initial registration period is 12 From 1 July 2009, caravans and camper trailers
months. When registration is renewed, short have been exempt from stamp duty.
term registration for six months is available
Total motor vehicle stamp duty revenue for
for all light vehicles, while three or six-month
the 2012/13 financial year was approximately
registration periods are available for light
$630 million.7
trailers and caravans.
Stamp duty revenue goes into consolidated
revenue which is used to fund core government
services, including RMS services.
13VEHICLE REGISTRATION INITIATIVES
CTP insurance The cost of CTP insurance currently comprises
a base premium (based on vehicle class and
The Minister for Finance and Services has
geographic region), bonus and malus risk
responsibility for the CTP insurance scheme.
factors (for example, age, vehicle type and
CTP insurance (a green slip) must be taken accident history), a Medical Care and Injury
out when establishing or renewing the Services (MCIS) levy and GST.
registration of a motor vehicle. CTP insurance
Owners of caravans and light trailers do not
currently provides third party personal injury
need to take out CTP insurance as they are
compensation to people injured in motor
covered under their towing vehicle’s CTP
vehicle accidents. This includes the ‘at-fault’
insurance policy.
vehicle’s passengers and other road users such
as drivers, passengers, pedestrians, cyclists, The average cost of CTP insurance in NSW is
motorcyclists and pillion passengers. CTP $542 (exc. GST). 8
insurance also provides limited coverage to the
at-fault driver. CTP insurance does not cover Total CTP insurance premium revenue for the
damage to property or other vehicles. 2012/13 financial year was approximately $1.9
billion and approximately $157 million in revenue
CTP insurance is provided by a number of was generated from the MCIS levy.9
licensed insurance companies which set
premium prices in a competitive market. The following diagram provides a graphical
The MAA of NSW is the government body overview of statutory charges for passenger
responsible for regulating the CTP insurance vehicles under the current registration system.
scheme, including premium pricing, for motor
vehicles in NSW.
Figure 5 – Current passenger vehicle costs
14VEHICLE REGISTRATION INITIATIVES
The following diagram illustrates that under the current weight tax charging framework there are
considerable variations in the size of the weight bands for passenger vehicles and the amount of tax
applying to each band.
Figure 6 – Passenger vehicle weight bands and examples
15VEHICLE REGISTRATION INITIATIVES
The following diagram provides a graphical overview of statutory charges for caravans and
light trailers under the current registration system. Note that under the current system privately
registered light trailers weighing less than 255 kilograms pay only the administration fee; they do
not pay any weight tax.
Figure 7 – Current caravan and light trailer costs
16VEHICLE REGISTRATION INITIATIVES
The following diagram illustrates that, consistent with passenger vehicles, under the current weight
tax charging framework for caravans and light trailers there are considerable variations in the size
of the weight band and the amount of tax applying to each band.
Figure 8 – Caravan and light trailer weight bands and examples
17VEHICLE REGISTRATION INITIATIVES
The following diagram provides a graphical overview of statutory charges for motorcycles under
the current registration system.
Figure 9 – Current motorcycle costs
The following diagram illustrates that all motorcycles, regardless of type, weight or power to weight
ratio, currently pay the same flat fee weight tax.
Figure 10 – Motorcycle examples
18VEHICLE REGISTRATION INITIATIVES
3. THE NEED FOR REFORM
3.1 Why are we suggesting and short term registration options, registration
reforms to NSW light remains periodic, with a specific end-date, and
requires a conscious effort by customers to
vehicle registration? renew registration before expiry. The current
Current vehicle registration policy in NSW system does not offer a convenient ‘set-and-
includes a number of long-held criteria that have forget’ continuous registration option.
provided a dependable registration system.
However, in the modern transport environment, In the modern transport environment, therefore,
this system has become increasingly outmoded. current registration criteria and principles
TfNSW therefore considers it imperative to have become increasingly outdated. TfNSW’s
propose a modern, integrated registration proposals intend to utilise registration fees
system that proactively encourages the purchase and terms as proactive policy tools to improve
of safer and greener vehicles; provides vehicle safety and environmental outcomes, and to
owners with greater flexibility and convenience; provide a more seamless and customer-friendly
and is more equitable. registration system.
For many years NSW registration policy has
been based on three principles: 3.2 What are the aims of
•• Registration charges should be determined
the reforms?
predominately by a vehicle’s weight The VRI reform proposals described in this
Discussion Paper provide options for the
•• Registration terms must be for specific, set use of registration charges and terms as
periods of time, and incentives to positively influence the choice
•• Registration renewal must be intentional and of vehicles. The proposals are intended to
active if it is to continue. provide the basis for an integrated, flexible, and
sustainable registration system that will cater
Charging registration on the basis of a for future changes to the NSW fleet and vehicle
vehicle’s weight pre-dates strong community management requirements.
awareness and concern about vehicle and
occupant safety and the environment. It also The primary aim of the proposed VRI reforms
does not consider increases in fossil fuel is to improve road safety and environmental
costs, and the introduction of advanced safety outcomes by raising awareness and encouraging
technologies and alternative fuels. Currently, the uptake of safer and greener vehicles.
if registration charges are considered at all VRI reforms also aim to:
when purchasing a vehicle, they are limited
to comparing prices based on the weight of a •• Improve registration charging equity across
vehicle. Weight tax alone is not an incentive the vehicle fleet
for consumers to choose a safer or more •• Provide customers with more flexible
environmentally sound vehicle. A stronger registration payment arrangements, and
incentive can be provided by financially rewarding
the choice of a safer and greener vehicle. •• Provide a flexible registration framework
to accommodate rapidly changing vehicle
Similarly, the policy of specific registration technologies and transport needs.
terms and over-the-counter registration
renewals pre-dates the internet and automated These registration initiatives are part of an
funds transfer to a time when face-to-face integrated strategy to improve road safety
customer transactions were the only option outcomes and complement existing and
for vehicle registration (and other) payments. planned driver and rider training, education, and
Despite significant recent customer service licensing programs.
improvements via online registration renewal
19VEHICLE REGISTRATION INITIATIVES 20
VEHICLE REGISTRATION INITIATIVES
3.3 Inclusion of safety and 3.5 Have the impacts of the
environmental criteria reforms been assessed?
in stamp duty and CTP In addition to improving road safety and
insurance charges environmental outcomes, a key consideration
While the primary purpose of this Discussion for TfNSW in developing the options is the
Paper is to outline options to reform and improve impact of the proposals on the community.
the current vehicle registration system in NSW, TfNSW has carried out an initial analysis to
the paper also briefly outlines additional options assess the possible impact of the reforms on
to reform costs related to registration such as vehicle operators across NSW.
stamp duty and CTP insurance.
There will be no net reduction in all light vehicle
Incorporating factors such as vehicle safety and revenues, including revenue allocated to the
environmental ratings across registration, stamp Roads Program, as a result of these reforms.
duty and CTP insurance charging frameworks Roads Program revenue is used to fund
enables the government to provide larger essential road infrastructure for the benefit of all
financial incentives and disincentives on the road users.
statutory charges for new vehicle purchases.
Until recent years, virtually all new vehicles
Initial customer feedback has suggested that with high safety and environmental credentials
changes to annual registration charges alone have been in the higher price brackets and
based on safety and environmental ratings may therefore generally available only to higher
not influence their vehicle choice. However if income earners. This is no longer the case,
these changes were coupled with changes to with an increasing number of safe, green new
the upfront stamp duty payment and/or annual vehicles available in the lower and mid price
CTP insurance charges, this would increase brackets. For example, there are approximately
the likelihood of positively influencing them to 260 vehicles that have been tested by ANCAP
purchase a safer and greener vehicle. and listed on their website at www.ancap.com.
au as having a five-star safety rating. Similarly,
there are a number of popular and affordable
3.4 Preliminary consultation vehicles in a range of sizes currently on the
on these reforms market that have CO2 emissions which would fall
A range of preliminary stakeholder and into the lowest emissions bands proposed by
community consultation has helped to shape TfNSW (i.e. Bands A and B). Vehicle emissions
the reform proposals in this Discussion information is available on the GVG website at
Paper. TfNSW consulted with a number www.greenvehicleguide.gov.au.
of key government agencies and industry
The proposed reforms would initially apply only
stakeholders, who provided important input and
to new vehicles as not all vehicle purchasers
expertise in the development of the reforms.
wish to, or are able to afford, a new vehicle. This
TfNSW also convened community focus groups will avoid disadvantaging current owners of less
in metropolitan and regional NSW. These focus safe and less green vehicles.
groups were invaluable both for receiving direct
Additionally, incentives to purchase new safer
customer feedback on TfNSW’s reform options
and greener vehicles will inevitably have a
and proposals, and for generating additional
flow-on effect and increase the number and
ideas and perspectives from members of
percentage of safer and greener second-hand
the community.
vehicles on the used car market. Second-hand
Further information on preliminary consultation safer and greener vehicles would retain a
is provided in section 11.2. lower registration charge, so that the ongoing
registration costs and affordability of these
vehicles would also be improved. Conversely,
vehicles with lower safety and environmental
21VEHICLE REGISTRATION INITIATIVES
ratings would become less attractive to It is proposed that changes to caravan and
purchase as second hand vehicles as they light trailer registration charges be applied
would be subject to the higher registration to the entire fleet to improve registration
charge that they received when first registered charging equity.
as new vehicles.
The option of continuous, pay by the month
Although the proposed increases and decreases registration would be available to the entire
in charges may not be seen as significant in NSW light vehicle fleet.
comparison with the total purchase price of a
Implementation of the reforms will be subject
new vehicle, the changes to registration charges
to the options being refined following the
would apply each year, and would accumulate
consultation process and government
over time. If safety and/or environmental criteria
endorsement. This will involve considerable
was also taken into account in CTP insurance
legislative, system and administrative changes.
and stamp duty charges, the financial incentives
An implementation date will be announced at
and disincentives would be further increased.
least one year prior to the reforms commencing,
and would be supported by an extensive public
3.6 How will the reforms communication program to ensure awareness
be implemented? and understanding.
The proposal is to initially apply the new All changes to vehicle charging frameworks
charging framework only to the registration of would be clearly explained and transparent.
new light passenger vehicles and motorcycles Thorough communication of the new vehicle
from a prescribed implementation date. charges could include, for example, an
The reforms will not be retrospective. easy to use free online registration charges
There are approximately 296,000 new comparison tool.
vehicle registrations annually, representing
This service may be particularly useful for new
approximately 6.5% of the total passenger
vehicle purchasers who have found a number
vehicle fleet. There are approximately 18,000
of potential vehicles, or have ‘narrowed down’
new motorcycle registrations annually,
their choices to a few vehicles, each of which
representing approximately 10% of the
meet their needs for size, comfort, purpose
motorcycle fleet.
and style. These customers could then enter
Following implementation of the reforms for the make, model and variant of each vehicle
new vehicles, the remainder of the NSW light to check and assess these vehicles’ safety and
vehicle and motorcycle fleet would then be environmental ratings, and use the comparison
gradually transitioned over to the new charging tool to immediately compare registration and
framework. This would encourage the renewal stamp duty costs between vehicles. This service
of the NSW fleet. is likely to be conceptually similar to the Motor
Accidents Authority’s online CTP insurance
An adequate lead time is important to allow
comparison and calculator facility. Information
owners of second-hand vehicles that do not
on registration and stamp duty charges would
meet modern safety and environmental criteria
also be available via the RMS Contact Centre,
time for transition to new charging criteria.
RMS Motor Registries and Service NSW centres.
TfNSW will thoroughly assess further practical
Consumer information on vehicle weight,
considerations before applying safety and
ANCAP safety ratings and emissions is also
environmental criteria to the entire light vehicle
readily available online or through motor
fleet. These will include the availability and
vehicle dealerships.
application of safety and environmental ratings
for older vehicles. The following sections of this Discussion Paper
outline the reform proposals in more detail.
22VEHICLE REGISTRATION INITIATIVES
4. REFORMS TO PASSENGER VEHICLE
REGISTRATION CHARGES
4.1 Options for proposed new Figure 11 – Passenger vehicles registration
charging framework for
passenger vehicles
Registration charges for light passenger
vehicles are currently based on the tare
weight of the vehicle, plus an administration
fee. While vehicle weight contributes to road
degradation, charges based solely on weight
fail to recognise other essential criteria such as
vehicle safety and vehicle emissions. TfNSW
has considered a range of charging frameworks
to effectively improve road safety and
environmental outcomes by raising awareness
and encouraging the uptake of safer and
greener vehicles.
The proposed new registration charging
framework incorporates vehicle safety and
environmental criteria, as well as vehicle weight.
TfNSW proposes that within the reconfigured
registration charges, the average proportion of
these three components will be:
•• Weight: 50%,
•• Vehicle safety: 35%, and
•• Environmental credentials: 15%.
These proportions will vary for individual
vehicle makes and models, depending on each
vehicle’s combination of weight, safety and
environmental criteria.
Under the new system, a new vehicle with
higher safety and environmental credentials
would cost less to register than a new vehicle
of similar weight with lower safety and
environmental credentials. This framework is
designed to be transparent, easily understood
by customers, and easily adaptable to any
changes to future priorities, requirements or
vehicle technologies.
The registration administration fee, which is
currently $60 for all registration establishment
and renewal transactions, would be
incorporated into the total registration charge.
The proposed new charging framework
would initially apply only to new passenger
vehicles registered after a prescribed
implementation date.
23VEHICLE REGISTRATION INITIATIVES
4.2 Weight charges To improve charging equity, TfNSW proposes
that the vehicle weight component of the
Current annual light motor vehicle registration
new registration charging framework be a
charges are based on an irregular weight
combination of a base fee and a cost per
band charging framework so the charges can
kilogram weight charge. The base fee would
increase considerably with minimal increases in
be the same for all vehicles, acknowledging
vehicle weight.
that all vehicle operators should contribute
For example, a vehicle weighing 1500 kilograms to the availability of the road network for
pays $277 in weight tax whereas a vehicle vehicle use, regardless of size, weight or
weighing only 20 kilograms more (i.e. 1520 other characteristics. The cost per kilogram
kilograms) pays $422 which is a $145 (52%) calculation would be based on the standard
increase. Common passenger vehicles can tare weight of the vehicle as reported by the
incur this substantial increase in weight tax vehicle manufacturer.
for a small difference in tare weight between
Moving from the current weight band
model variants (for example, a base model
framework, where there are considerable
compared to a luxury model, or the addition of
variations in the size of the weight bands and
safety features).
the charges applying to each band, to a cost per
Despite the fact they may be greener vehicles, kilogram framework would ensure transparent
hybrid and electric vehicles can also be and precise charging for all vehicles.
disadvantaged under the current weight band
An example (based on vehicles registered for
charging framework due to the added weight of
private use) has been developed to illustrate
their batteries and associated systems.
how the new charging framework may function
in practice. In this example, the cost per
kilogram charge has been set at 14 cents per
kilogram, which equals $14 per 100 kilograms
or $140 per tonne. The base fee has been set at
$50. These are example price settings only and
are not intended to provide specific or definite
future charges.
The following diagram illustrates the current
irregular weight bands and how a precise
cost per kilogram charging method would
create a median line of pricing throughout
the fleet for the weight component of the
registration charge.
A cost per kilogram charging method would
move all charges to the blue median line
shown in the diagram. This would result in a
decreased charge for vehicles currently to the
left of the median line and an increased charge
for vehicles to the right of the line. This is a
more equitable method for calculating weight
charges than the current system.
Under the proposed reforms, safety and
environmental charges would then be applied
to the weight charge as described in the
following sections.
24VEHICLE REGISTRATION INITIATIVES
Figure 12 – Current light motor vehicle weight tax categories and charges (private rate)
Questions
?
1. What are your views on the proposal to 2. Do you agree that administrative fees
calculate the vehicle weight component should be incorporated into the total
of the registration charge as a registration charge?
combination of a base fee and a cost per
kilogram of the vehicle’s tare weight?
25VEHICLE REGISTRATION INITIATIVES
4.3 Safer vehicles For each of these reasons, TfNSW considers
it essential to include vehicle safety as a
TfNSW considers that providing registration
registration charging criteria to promote the
incentives based on vehicle safety criteria
uptake of newer and safer vehicles, and to
would assist in the uptake of safer new vehicles.
assist in the incorporation of advanced safety
Research has shown that without government
technology as standard features in vehicles.
incentives or regulation, new vehicle safety
features – such as seat belts and airbags – can
Australasian New Car Assessment
take approximately 15 years to be incorporated
Program (ANCAP) safety ratings
into 50% of a vehicle fleet and approximately
30 years to be incorporated into 90% of the TfNSW proposes that the ANCAP safety ratings
fleet. Additionally, the occupant of a 10-year-old system be used for calculating the safety
vehicle has nearly twice the risk of being killed component of the new registration charging
in a crash than the occupant of a new vehicle.10 framework. ANCAP provides consumers with
independent and transparent information on
Initiatives to encourage the purchase of the level of occupant and pedestrian protection
safer vehicles also directly support the NSW provided by different vehicle models in the most
Government’s goal to improve road safety and common types of crashes through its safety
reduce fatalities and injuries on NSW roads as star rating program. ANCAP safety ratings are
part of the NSW 2021 strategic plan. Improved determined based on a series of internationally
road safety is also a core principle of the NSW recognised crash tests and safety ratings are
Long Term Transport Master Plan and the NSW available for approximately 500 vehicles.
Road Safety and Motorcycle Safety Strategies
2012-2021. TfNSW’s registration initiatives have ANCAP assesses vehicles up to 3.5 tonnes GVM.
also been designed to complement existing Therefore it is proposed that new passenger
and planned NSW driver and rider training, vehicles weighing up to 3.5 tonnes GVM are
education, and licensing programs. included in the new registration charging
framework.
Key national and international programs are
currently focussed on vehicle and road safety. A full list of ANCAP safety ratings and model
The United Nations has declared 2011-2020 as specifications, as well as vehicle safety
the ‘Decade of Action’ for road safety, and the information and crash test images and videos,
Australian Transport Council has released the are available on the ANCAP website at
National Road Safety Strategy 2011-2020 which www.ancap.com.au.
sets out options and initiatives in the four key Under the ANCAP safety rating system of 1 to
areas of safe vehicles, safe roads, safe people, 5 stars, a higher number of stars indicates a
and safe speeds. Further information on the higher level of safety in a crash and the ability,
alignment of TfNSW’s current proposals with through technology, to avoid a crash. ANCAP has
state, national and international road safety advised TfNSW that there is a large difference
initiatives is provided in Section 11. between the safety credentials of vehicles with
At a personal level, when purchasing a new high ANCAP safety ratings and those with lower
vehicle, individuals and families who choose a ratings. A range of research shows a strong
safer vehicle make a direct investment in their link between a vehicle’s ANCAP safety rating
own safety, and the safety of their passengers and injury and fatality rates in a crash. ANCAP
and other road users. Road crashes are a advises that vehicle occupants have twice the
leading cause of death for people aged one to chance of being killed or seriously injured in a 3
44 years in NSW and they cost the community star ANCAP safety rated vehicle compared to a 5
approximately $5.37 billion in 2011.11 Road safety star ANCAP safety rated vehicle.
initiatives that reduce the number of injuries The following diagram illustrates the crash test
and fatalities on NSW roads have a positive results of a 1 star ANCAP safety rated vehicle
and important flow-on effect in reducing the and a 5 star ANCAP safety rated vehicle in a
broader social costs of hospital and medical frontal offset test at 64km/h.
treatment. This benefits the whole community.
26VEHICLE REGISTRATION INITIATIVES
Figure 13 – Crash test results of a 1 star and a 5 star ANCAP safety rated vehicle
To achieve the maximum 5 star ANCAP safety ANCAP safety ratings cover approximately
rating, a vehicle must perform well in all safety 94% of new vehicle sales. ANCAP usually tests
test categories and must have a minimum and rates only one variant of a vehicle model
range of safety equipment and safety assist but operates under a variant policy which can
technologies (SAT) as standard. The rating allow for the extension of the ANCAP crash test
system is regularly reviewed to accommodate result from a tested model variant to similar
and encourage improved safety technologies variants across the model range, subject to
introduced by car manufacturers, with stringent conditions.
requirements for each star rating increasing year
Some vehicles are never ANCAP tested, such
on year.
as some high value, limited production vehicles.
ANCAP is supported by the Australian Federal, Some are not tested in Australia; in these cases,
State and Territory Governments, the New the results of testing by other NCAP organisations
Zealand Government, the Victorian Transport (such as EuroNCAP) are assessed using the
Accident Commission, NRMA Insurance, Australasian protocols and an ANCAP safety
Australian and New Zealand motoring rating is then determined. Once a particular vehicle
organisations and the FIA Foundation (UK). receives an ANCAP safety rating, it retains that
safety rating for the life of the vehicle (i.e. vehicles
In early 2013, the NSW Government
are not re-rated as they get older). It is proposed
strengthened its fleet purchasing guidelines
that vehicles with no ANCAP safety rating at the
to require all new passenger vehicles to have
time of registration be charged at the higher rate.
a 5 star ANCAP safety rating and all new light
commercial vehicles to have a minimum 4 star As the following diagram shows, the purchase
safety rating, plus specified safety features. of higher safety rated vehicles in NSW increased
significantly between 2006 and 2012.
27VEHICLE REGISTRATION INITIATIVES
Charging structure for safety component
The new charging framework being proposed by TfNSW provides incentives for the uptake of
Figure 14 – 2006 - 2012 ANCAP stars % of total vehicles sold
vehicles with high ANCAP safety ratings. The Figure 15 – Example safety charges
following table shows example charges (based
ANCAP
on vehicles registered for private use) for the
safety component of the registration charge, Example fee
Safety rating
using the ANCAP safety rating system. The (private use)
safety charge would be in addition to the weight 5 stars $25
charge described in the previous section and 4 stars $65
the environmental charge described in the next
3 stars $150
section.
2 stars $150
1 star $150
Questions
?
3. Do you support the proposal
to incorporate safety criteria into
vehicle registration charges?
Why or why not?
4. Do you think the ANCAP safety rating
system should be used as the basis
for determining the safety component
of the registration charge?
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