The Federal Government's Extra Tax On Fuel May Reduce The Road Death Toll In Australia

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Australian scientists have come up with a counter-intuitive plan — make petrol more expensive by removing any subsidies.

About 35,000 road deaths could be avoided each year by the removal of global fuel subsidies, according to a study from the Australian National University (ANU) has found.

The researchers say fuel subsidies in countries such as Venezuela and Indonesia are fuelling high road death rates.

The study, co-authored by ANU Crawford School’s Dr Paul Burke and Dr Shuhei Nishitateno, used data for 144 countries from 1991-2010 to examine how fuel price changes affect road safety.

The researchers found that increases in fuel prices result in fewer deaths on the road.

“Higher fuel prices see people drive less, which flows on to a reduction in road deaths. Our study is the first to show this for a large international sample of countries,” Dr Burke says.

The study has implications for fuel pricing policies.

Australia’s annual road death toll has fallen by almost 70% from its peak in 1970, but per-capita road death rate remains higher than those of some other developed countries.

Australia also has among the lowest petrol taxes in the OECD. The Federal Government has recently re-indexed Australia’s fuel excise to the rate of inflation.

“In time, we should expect fuel excise indexation to result in slightly fewer deaths on Australia’s roads,” Dr Burke says.

Globally, around 1.3 million lives are lost in road crashes each year.

Road crashes are the number one cause of death for people between 15 and 29 years of age.

The world oil price has fallen by more than 20% since June, which will place upward pressure on road death numbers.

The research is published in the journal Economic Inquiry.

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