Mythbusting: Cyclists don’t Pay

Cycling has been in the media a bit lately and once again a familiar chorus has sprung up. It doesn’t matter whether you are talking funding for cycleways, whether to wear hi-vis clothing, or a high-profile cycle crash, inevitably someone in the blogosphere, Facebook, or letters to the editor pipes up and claims that “cyclists don’t pay”. More specifically, the complaints usually boil down to two things:

  1. Cyclists don’t pay petrol taxes, registration, or road user charges; therefore they have no legitimate right to use the road, nor to claim any special provision for cycling (in fact they should be grateful for what they do get given gratis)
  2. Cyclists also don’t pay ACC levies like motorists; thus they get free medical treatment too when they crash (and if they dare to do something like choose not to wear a helmet they shouldn’t even get that)

Freeloader

The reality is in fact far different. Yet despite pointing the facts out left, right, centre to anyone who’ll listen, it still keeps cropping up. So, if you get involved in a “robust” discussion about the contribution of cyclists to the upkeep of our transport and health systems, here are a few handy points to throw back.

Note: as many of you know, I don’t like the terminology “cyclist”; I’d rather think of “a person who happens to be cycling right now”. It’s potentially another argument against dividing people into those who pay and those who don’t. So, where possible, I have avoided talk about “cyclists” here.

First it’s useful to know what transport dollars are actually spent on. If we ignore public transport services and facilities, the majority (~52%) of road construction costs are actually spent on maintenance and renewals to repair worn out roads (although RoNS are trying to do their darndest to steal from this bucket of money too). The damage to roads from vehicles is roughly proportional to the weight on each wheel to the fourth power (it’s complicated by axle configuration, but let’s not go there). In other words, a 2 tonne 4-wheel car typically causes about 10,000 times more damage to a road than a 100kg bike and rider on two wheels, while a 30 tonne 18-wheeler truck might do more than 1 million times the damage. So basically a fair proportion of transport costs are simply covering the ongoing effects of cars and trucks on the roads; any damage to roads by bikes is negligible.

The balance is then spent (in theory) on the best solutions to resolve the various transport problems of congestion, safety, environmental impacts, etc. However, no-one said that the best solution was necessarily one based on who contributed the most for it. For example, the most cost-effective solution to dealing with congestion somewhere may be to provide good cycling alternatives, rather than increase road capacity for motor vehicles.

OK, where does the money come from? A large chunk of the transport money comes from petrol taxes, road user charges (what truckies pay), and motor vehicle registration fees. There’s also a small but growing amount coming from general taxation (e.g. anything you buy with GST on it) – update: and the new $100 million Urban Cycleways Fund is completely funded by general taxes, not road revenue. However, when it comes to local roads (where most people cycle) about 50% is paid for by local Council rates (in larger places like Christchurch, the proportion is typically a bit higher). In other words, anyone who owns or rents a home (i.e. most adults and by implication their dependants) is contributing to the transport provision in their area. Most cycling infrastructure costs considerably less than half the cost/km of equivalent motor vehicle infrastructure, so I think that even those who don’t cycle are getting a pretty good deal out of that.

I’ve heard a number of people use this argument: “as well as a bike I also own a car, therefore I do contribute to transport costs for cycling.” Well, it’s partly correct… remember that a large chunk of your petrol dollars are simply going towards fixing the roads that you damage by driving around. However, probably like me (also a car owner), you feel that a greater proportion of the balance should be spent on non-motor vehicle solutions to congestion, safety, etc, and that’s a perfectly valid viewpoint.

Now, what about ACC? Well, cycling injuries are covered by either Earner Levies (paid for by everyone who works) or the Govt’s Non-Earner Account (paid for by general taxation). So if you are working or paying GST, you are already contributing to the treatment costs for you and your dependants. So why do motorists have to pay an additional levy? Because they cost a lot more – on-road cycling accidents cost ACC ~ $10 million/year compared with >$350 million/year for motorists.

Sometimes someone will also demand that cyclists should also be licensed or pay a registration fee (should help track down all those law-breaking riders too…). But invariably, any places that have looked into such schemes have found that the costs of running them would pretty much outweigh the likely revenue or benefits. And if someone believes that licensing all cyclists will eliminate bad riding behaviour, they clearly haven’t been paying attention to the antics of all the licensed and registered drivers out there…

A more fruitful idea could be to simply add a levy onto each new bicycle imported and sold in the country. With over 200,000 bikes arriving each year, a (say) $20 levy would raise an extra $4 million a year. That’s not actually a lot, considering we already spend about $15-20 million/year (c.2013) nationally on walking/cycling facilities and that hardly goes anywhere near what is needed (certainly wouldn’t pay for $69m of Chch cycleways in a hurry…). But maybe if it was ring-fenced for cycling and driver education and training initiatives (like these), it might be quite a useful outcome (motorcyclists have done something similar with an annual safety levy). And it would have the distinct advantage of demonstrating a direct payment link for the “cyclists don’t pay” hardliners.

I haven’t even started to get on to how people who cycle also typically save the country in so many other ways economically, be it health, environment, oil imports, etc (and to be honest, those points can be a tough sell to the die-hard car-lover). But even with the above points, hopefully you can nullify the “cyclists don’t pay” side-tracking and get back to the real debate about how to provide for a better cycling environment.

CyclistsPayTaxes

15 comments

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15 Comments

  • Frances
    19 February 2013, 8:07 am

    Fantastic points, thank you!

    REPLY
  • Dirk
    19 February 2013, 9:02 am

    You do all of us people who sometimes cycle a real favour by providing the facts to gently persuade those with an open mind. Thank you.

    REPLY
  • Simon Connell
    20 February 2013, 12:10 pm

    “Now, what about ACC? Well, cycling injuries are covered by either Earner Levies (paid for by everyone who works) or the Govt’s Non-Earner Account (paid for by general taxation). So if you are working or paying GST, you are already contributing to the treatment costs for you and your dependants. So why do motorists have to pay an additional levy? Because they cost a lot more – on-road cycling accidents cost ACC $350 million/year for motorists.”

    Not quite. Cycling injuries that involve motor vehicles on public roads (including when a cyclist crashes into a stationary motor vehicle) are motor vehicle injuries, which are funded by the motor vehicle account. The motor vehicle account is funded by petrol levies and vehicle registrations.

    So, in one sense, you have car/cycle accidents being funded by car users but not necessarily cycle users. I’m not sure if this is a big deal, and I think it’s arguable that cost of car/cycle accidents are probably more expensive because a car was involved.

    Some cycling injuries will count as work-related injuries, though this is probably rare and also quite reasonable those injuries are paid for by the work account.

    REPLY
    • Lennyboy@Simon Connell
      20 February 2013, 12:31 pm

      Fair comment Simon, I glossed over that distinction. My own (Transfund) research on cycle-only crashes, using ACC data about 12 yrs ago, found that cycle-only on-road crashes outnumbered those involving a motor-veh by about 3:1 or 4:1 – a lot of gravel, poles and other cyclists/pedn’s/animals we have managed to hit over the years! When we factor in that the fault in ~2/3 of cycle vs motor vehicle crashes are attributed to the motorist, then that suggests perhaps ~10% of cycle crashes are funded from the motor veh account through no fault of the motorist.

      REPLY
      • michelle@Lennyboy
        28 November 2014, 7:33 pm

        I would be interested in a further brake down of the motor vehicle accidents with same analysis done for motorbikes. As a rider the ACC levy feels extremely unjust and I am reluctant to take a politicians word that it isn’t. some facts and figures would be interesting to quite a few of my 2 wheeled (motorised) colleagues.

        REPLY
  • Marky
    23 February 2013, 10:51 pm

    However when a bicycle hits a stationary car (parked) – the car was probably parked in a space funded by council rates (i.e the car parking space was subsidised by those who chose to ride rather than drive).

    Also, it could be claimed that those who choose to drive their cars without helmets are costing us a fortune in ACC claims 🙂

    REPLY
  • Robbie
    25 February 2013, 12:14 pm

    Three other arguments:
    1) Cyclists use Fuel and Coolant. We pay GST on both of these items. Work out the GST paid on various types of fuel and coolant for cyclists and it turns out we pay about the same tax per Joule as the motorist when we fuel and cool using milk. Ride down to the local cafe and the coffee turns out to be extremely expensive fuel tax wise…
    2) The relative cost to the Health Care system cyclists to non cyclists is statistically significant. Each cycle commuter saves the tax payer about $10 per km traveled per week.
    3) The total cost of road transport including construction, maintenance, accident related, and support services exceeds the total revenue collected. Most “motorists only” when shown all the facts and figures just refuse to accept that this is true. They believe…

    REPLY

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