As you read this, about 50 journalists are locked up with Victorian
Treasurer John Brumby getting the lowdown on the biggest tax and spend
budget in the state’s history, which is partly being funded by another
quite outrageous $600 million raid on the Transport Accident Commission.
The TAC is one of the greatest public policy outcomes you could ever
imagine. Created in 1987, it is Victoria’s state-owned compulsory
monopoly provider of third party insurance for people injured on
Victoria’s roads, irrespective of who is at fault. Even the Kennett
Government refused to flog it off, which was a good thing given that
NSW and Queensland taxpayers collectively dropped about $1 billion when
Despite never putting a dollar of capital into the TAC, this latest
raid will bring to almost $7 billion that has been milked from it by
both sides of politics since 1993. Only Telstra has delivered a
government more in dividends over the past 13 years.
However, Victorians aren’t exactly complaining because we have the
lowest road toll in the world, as measured by deaths per registered
vehicles, plus the lowest premiums in the country and the most generous
How does this magic pudding deliver to everyone? It’s the economic
wonders of huge public education campaigns about road safety plus the
world’s most officious traffic offence regime.
Investing about $500 million in road safety campaigns over 20 years has
now helped produce about $7 billion in dividends for a state budget
which is constrained by the constitutionally narrow revenue bases which
all state Treasurers battle.
However, Victorian motorists will pay a world-leading $800 million-plus
in traffic fines next year so they are being slugged every which way
when they should be getting rewarded for their safe driving records.
Sadly, the RACV is asleep at the wheel as both sides of politics have
conspired to raid the TAC when motorists should instead be enjoying
premiums of less than $200 a year – about 30% less than the monopoly
rent rate they are currently being charged.