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Compilation of a Transport Revenue and Expenditure Model (TREM) for Australia

Estimating transport sector revenues and expenditures by mode and volume is essential for policy analysis by transport agencies as well as state and Commonwealth treasuries. This paper outlines the methodology used to compile a transport revenue and expenditure model (TREM) for Australia, focussing on a disaggregated road transport component. The paper first reviews current approaches to transport sector revenue and expenditure estimation within Australia. It then examines data sources used, namely the Survey of Motor Vehicle Use and its vehicle classifications by kilometres travelled and volumes used, i.e. litres of fuel. As a ‘bottom-up’ approach, the TREM estimates overall volumes and expenditures across each of the states within Australia for 2015/16 by vehicle type on fuel, oil, tyres, repairs and maintenance and new vehicles, and what portion of this is allocated to fuel excise, vehicle registration charges and GST. This is compared with available estimates of these revenues published by the ABS, BITRE and NTC. This provides transport agencies and treasuries with a basis for estimating the impacts of reduced fuel use on user charges and taxation revenues arising out of changes in engine technologies or mode switching, for example. Finally, directions for the future development of the model are provided.