Cyclists and public transport users should get tax concessions

28 October 2009

People who cycle or catch public transport to work should get tax concessions, says City of Sydney Council.

This could be done either through concessional salary sacrifice, or personal tax deductions of cycling equipment and monthly, quarterly and annual public transport tickets.

The recommendation is contained in the City's submission to the Sydney Morning Herald's Independent Transport Inquiry.

"Australia's current tax system actively encourages people to drive but does not reward those who make sustainable transport choices by cycling or catching public transport," Lord Mayor Clover Moore MP said.

"Traffic congestion costs Sydney close to $4 billion a year and The Bureau of Transport Economics expects that to rise to $8 billion by 2020 under a do-nothing scenario. The health and environmental costs of transport are $1.4 billion per year.

"People who contribute to reducing congestion and pollution and the burden on our health system should be rewarded."

Redesigning the tax system would also create incentives for drivers to make the switch to more sustainable transport options, says the City.

"Someone earning a taxable income of up to $80,000 could get up to $315 back on the $1000 they pay for a bike, helmet and lock," Ms Moore added.

"Equally a commuter from Parramatta earning the same amount would get up to $630 back on their $2000 annual yellow travel pass."

The City also wants a review of other incentives in the tax system, with Australia lagging behind other countries that have transformed their taxation system to actively promote public transport.  The United Kingdom's tax system calculates Fringe Benefits Tax based on the amount of carbon dioxide that a car emits.  In the United States, employers can provide their employees with tax free public transport vouchers, passes or fares.

"40% of peak hour traffic is corporately owned or subject to Fringe Benefits Tax concessions," Ms Moore added.

"People are getting rewarded for racking up kilometres on their car. If we are serious about addressing climate change and fixing the transport system these imbalances need to be addressed."

Please find the City's submission to the SMH Independent Transport Inquiry here: http://chilp.it/?5ee103

Media Contact: Kristie Down 0488 008 261