Cost of Living: Car Registration Fees

In Queensland, motor vehicle registration fees consist of three components:

(a) a base registration fee;

(b) a traffic improvement fee; and

(c) a compulsory third party (CTP) insurance charge. 

The Queensland Government receives the revenue generated by the base registration fee and the traffic improvement fee.  It does not receive the revenue from the third component as the CTP insurance premiums go directly to the nominated insurance provider.

Freeze on Car Registration Fees

During its 2012 election campaign, the LNP made a commitment to freeze family car registration for three years.  The LNP said that this proposal is intended to ease the cost of living for Queensland families by saving them $15 to $20 a year. 

In line with this commitment, on 12 May 2012, the new Minister for Transport and Main Roads, the Hon Scott Emerson MP, released a media statement confirming that the new LNP State Government, in its first Cabinet meeting, had agreed to freeze base registration fees for family motor vehicles for three years from 1 July 2012.  The Minister also announced that the traffic improvement fee component of the registration fees would be frozen for this period.  However, Mr Emerson MP said that because the third component, the CTP insurance premium, is set and received by insurers within a range determined by the Motor Accident Insurance Commission (MAIC), it cannot be frozen by the Government. 

The MAIC recently announced an increase in CTP insurance premiums, effective 1 July 2012.  This increase (from $318 to $318.80) is reported to be the first since 2009.  The Motor Trades Association of Queensland is calling on the Government to absorb any increase in CTP premiums so there is a “true freeze on registration fees”.  The Transport Minister has, however, indicated that “government revenue [would not be used] to fund insurance companies”.

On 18 May 2012, an amending Regulation setting out the vehicle registration fees for the next 12 months was notified in the Queensland Government Gazette.  Under the new Regulation, the base vehicle registration fees for prescribed private use vehicles (i.e., family cars) for the 12 month period from 1 July 2012 remain the same as the current registration fees for such vehicles.  For instance, the base fee for a 4 cylinder family car remains at $280.05.  The traffic improvement fee component for a prescribed private use vehicle for this period is also the same as the current fee, being $48.85.  As anticipated, these regulations provide for an increase in the base registration and traffic improvement fees for vehicles other than family cars.

Australian Motor Vehicle Registration Costs by Jurisdiction

Recently, the RACQ, Queensland’s peak motoring body, described Queensland as the most expensive state to own and run a vehicle in Australia.  The table below, prepared as part of a RACQ fact sheet, compares the annual car registration and related fees (excluding CTP insurance) for small, medium and large cars, by jurisdiction throughout Australia. 

Annual Vehicle Registration Fees by State and Territory as at May 2012 (Excluding CTP)

Car Sizes	QLD	NSW	VIC	WA	SA	TAS	NT	ACT	Average (excl. Qld)
Small	$328.90	$272.00	$226.60	$205.88	$137.00	$202.40	$80.00	$269.90	$199.11
Med.	$492.30	$321.00	$226.60	$276.00	$248.00	$227.40	$164.00	$303.30	$252.33
Large	$669.80	$459.00	$226.60	$328.59	$345.00	$272.40	$244.00	$432.80	$329.77

Notes:  These figures include the base registration and related annual fees but not the CTP fee.  They represent the full prices for private use, not including any concessions that may be available to some motorists.  Please see the RACQ fact sheet for additional qualifications and information.

National Injury Insurance Scheme

A possible impact on the total cost of motor vehicle registration is the Federal Government’s proposal that the National Injury Insurance Scheme (NIIS) component of the proposed National Disability Insurance Scheme (NDIS) be funded from various sources, primarily state-based insurance premium sources (such as CTP fees).  The NIIS, a federation of state/territory schemes, seeks to provide long-term care and support on a no-fault basis for anyone who suffers a catastrophic injury (e.g. in a motor vehicle collision).  It would replace existing state/territory based schemes.  The 2011 Productivity Commission Inquiry Report on Disability Care and Support (PC Disability Report) indicates that Queensland is one of the few jurisdictions without a no-fault scheme built into car insurance (PC Disability Care Report, Vol 2, p 790).

The PC Disability Care Report estimates (Vol 2, p 908) that a $30 to $40 increase in the annual cost of vehicle registration would be necessary to cover for catastrophic motor vehicle injuries.  However, the Queensland Treasurer, the Hon Tim Nicholls MP, anticipates the price rise resulting from the Federal Government funding proposals for its NIIS would be approximately $100 per year.  Mr Nicholls MP has stated that while Queensland supports an NDIS, Queensland was reluctant to commit to the Scheme unless the Federal Government proposed a better funding model.  At the most recent Council of Australian Governments (COAG) meeting on 13 April 2012, CAOG “recognised that the level and share of Commonwealth funding will need to increase” to develop the NDIS.  Currently, as noted by COAG “[a]pproximately 70% of disability care and support services are funded by State and Territory Governments”.  

Key documents

·    Transport Operations (Road Use Management – Vehicle Registration) Amendment Regulation (No. 1) 2012 (Qld), notified in the Queensland Government Gazette on 18 May 2012, amending the Transport Operations (Road Use Management – Vehicle Registration) Regulation 2010 (Qld)

·    RACQ Fact Sheet: Motor Vehicle Registration Fees in Queensland, 22 May, 2012

·    “Cost of Living – Freezing car rego”, LNP Policy, November, 2011

·     Council of Australian Governments Meeting Communiqué, 13 April 2012

·    Productivity Commission, Disability Care and Support, Productivity Commission Inquiry Report (2011); Fact Sheet

·    ‘The NDIS and the NIIS; what’s the difference?’, Ramp Up – ABC, 19 May 2011

Ministerial Media Statements

·    The Hon Campbell Newman MP, Queensland Premier, Cost of Living cut under LNP Govt, 15 May 2012

·   The Hon Scott Emerson MP, Minister for Transport and Main Roads, LNP will deliver registration savings for families, 12 May 2012

·    The Hon Tracy David MP, Minister for Communities, Child Safety and Disability Services, Newman Government reaffirms commitment to Commonwealth-funded NDIS, 30 April 2012

Selected newspaper reports

·    Stamp duty, car registration to top Parliament debate, Brisbane Times, 14 May, 2012

·    LNP can’t head off car premium, says minister, Sydney Morning Herald, 13 May 2012

·    Queensland motorists to pay more to register cars in 2013 despite State Government’s promise to freeze registration fees for family vehicles, Courier-Mail, 12 May 2012

·    Howard backs disability boost, Brisbane Times, 9 May 2012

·    Safety net you cannot put price on, Courier Mail, 12 April 2012

·    Hurdle for LNP car rego freeze, Sunshine Coast Daily, 7 April 2012

·    Qld to oppose disability insurance scheme, Nine News Online, 5 April 2012

·   Threat of $100 car registration rise under national disability scheme, warns state Treasurer Tim Nicholls, Courier Mail, 5 April 2012

Kelli Longworth

General Distribution Research Team, Research and Information Service