Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

Should the user pay?

Lessons from Anglo-Australian history


The paper puts the case that historical analysis helps to understand current discussions on user-pays principles and practice. In particular, (a) it is demonstrated that the nature of funding systems is dominated by political considerations, and (b) user-pays systems lead to inadequate funding of infrastructure when politically controlled, but provide funds for expansion when “market-driven” (in pursuit of profit maximisation). The case is illustrated by reference to the experience of interregional transport infrastructure in 19th century in England and 20th century Australia.

Revenue deficiencies arising from government-controlled rates can lead to the demise of private transport infrastructure. The problem is considered in the context of the history of interregional roads and railways in England between the 15th and 19th century in England and in Australia in the 19th and 20th century. The current embrace by government of the user-pays system in transport services arises from fiscal deficiencies, as much from economic philosophy. User-pays policies are part of the global re-emergence of economic rationalism since the 1970s.

The lesson for other nations from Australia's experience is twofold. First, in a federal system of government, despite the efficiency benefits of user-pays in interregional land transport, fiscal and political objectives will prevail. Second, in sparsely populated and/or developing countries, deregulation of long distance road transport will make funding a national highway system a critical concern.

This is a preview of subscription content, log in to check access.


  1. Abelson PW (1979) Property prices and the value of amenities.Journal of Environmental Economics 6 (March): 11–28.

  2. Anon (1991) Motorway takes its toll.Road Ahead (February): 18–19.

  3. Bita N (1993) Push for councils to levy user pays road tolls.Australian 8 (April): 6.

  4. Brimson S (1983)Tramways of Australia. Sydney: Dreamweaver Books.

  5. Brown W (1993) Big budget backdown.Courier Mail 30 (August): 1.

  6. Budget Statements (1993)Budget Paper No. 1. Canberra: A.G.P.S.

  7. Bureau of Transport & Communications Economics (1988)Review of Road Cost Recovery. Occasional Paper 90, Canberra: A.G.P.S.

  8. Bureau of Transport & Communications Economics (1993)Road Freight Industry. Information Paper 28, Canberra: A.G.P.S.

  9. Butcher EWA (1990)Inter-State Commission Proposed National Road Funding Scheme: A Review. July, Canberra: A.G.P.S.

  10. Butterworth AK (1889)Treatise on the Law Relating to Rates and Traffic on Railways and Canals, 2nd edn. London: Butterworths.

  11. Charlton P (1993) Greens stall the budget.Courier Mail 1 (September): 1.

  12. Clapham JH (1930)Economic History of Modern Britain, 2nd edn. Cambridge: at the University Press.

  13. Commonwealth Bureau of Roads (1973)Report on Roads in Australia. Melbourne.

  14. Commonwealth Bureau of Roads (1975)Report on Roads in Australia: Appendixes. Melbourne.

  15. Commonwealth-State Overarching Group on Land Transport (1991)Final Report. The Department of The Prime Minister and Cabinet, Canberra.

  16. Coomber J (1990) Pacific Hwy to get $300 m NSW facelift.Courier Mail 13 (October): 3.

  17. Docwra G (1991)Some aspects of transport regulation, deregulation and regulatory reform in Australia. Discussion Paper in Economics, No. 51, January, Department of Economics, University of Queensland, Brisbane.

  18. Docwra, G (1993)Roads Policy and Australian Federalism. Occasional Paper 106, Bureau of Transport & Communications, Canberra: AGPS.

  19. Duncan I & Bollard A (1992)Corporatization & Privatization. Oxford: Oxford University Press.

  20. Forsyth P (1993) A Perspective on Microeconomic Reform. In: Forsyth P (ed)Microeconomic Reform in Australia. St Leonards, NSW: Allen & Unwin.

  21. Harrison DF (1992) Bridges and economic development 1300–1800.Economic History Review 45(2): 240–261.

  22. Hart I (1987) Cost recovery in road transport — does it exist?Twelfth Australian Road Transport Forum (1): 1–15, 8–10 July, Brisbane.

  23. Historical Records of New South Wales (1893) I: Part 1. Cook 1762–1780. Government Printer, Sydney.

  24. Historical Records of New South Wales (1889) I: Part 2. Phillip 1783–1789. Britton A (ed). Government Printer, Sydney.

  25. Historical Records of New South Wales (1893) II — Grose and Paterson 1793–1795. Bladen FM (ed). Government Printer, Sydney.

  26. Historical Records of New South Wales (1895) III — Hunter. 1796–1799. Bladen FM (ed). Government Printer, Sydney.

  27. Historical Records of New South Wales (1896) IV — Hunter and King. 1800, 1801, 1802. Bladen FM (ed). Government Printer, Sydney.

  28. Historical Records of New South Wales (1897) V — King. 1803, 1804, 1805. Bladen FM (ed). Government Printer, Sydney.

  29. Historical Records of New South Wales (1898) VI — King and Bligh. 1806, 1807, 1808. Bladen FM (ed). Government Printer, Sydney.

  30. Historical Records of New South Wales (1901) VII — Bligh and Macquarie. 1809, 1810, 1811. Bladen FM (ed). Government Printer, Sydney.

  31. Hovenden L (1983) The impact of the motor vehicle, 1900–39. In: Wotherspoon G (ed)Sydney's Transport: Studies in Urban History. Sydney: Hale & Ironmonger.

  32. Inter-State Commission (1986)Investigation of Cost Recovery Arrangements for Interstate Land Transport. Canberra: A.P.G.S.

  33. Jackman WT (1916)Development of Transportation in Modern England. Volume 2, Cambridge: Cambridge University Press.

  34. Jansson JO & Cardebring (1989) A comparative study of road user taxation in different countries.International Journal of Transport Economics 26(1): 79–89.

  35. Kolsen HM (1968)Economics and Control of Road-Rail Competition. Sydney: Sydney University Press.

  36. Kolsen HM (1993)Personal Communication. 16 (March).

  37. Lay MG (1984)History of Australian Roads. Australian Road Research Board Special Report No. 29, Melbourne: Australian Road Research Board, Vermont South, Victoria.

  38. Lay MG (1993)Ways of the World. Sydney: Primervera Press.

  39. Lee R (1988)Greatest Public Work. Sydney: Hale & Ironmonger.

  40. Masschaele J (1993) Transport costs in medieval England.Economic History Review 46(2): 266–279.

  41. Mogridge M (1990)Travel in Towns. London: Macmillan Press Ltd.

  42. National Australian Association of States Roads Authorities (1981)Toll Roads and Bridges. NAS 36, Sydney.

  43. National Road Transport Commission (1992a)Economic Benefits of Improved Pricing. Working Paper 2, January, prepared by Meyrick & Associates, Melbourne: National Road Transport Commission.

  44. National Road Transport Commission (1992b)Discussion Paper on Heavy Vehicle Charges. April, Melbourne: National Road Transport Commission.

  45. National Road Transport Commission (1992c)Heavy Vehicle Charges Determination. 10 June, Melbourne: National Road Transport Commission.

  46. National Road Transport Commission (1993)Cost Allocation and Charging. September, Working Paper 10, Melbourne: National Road Transport Commission.

  47. Olsen M, Jr (1969) The principle of ‘fiscal equivalence’: the division of responsibilities among different levels of government.American Economic Review 59(2): 479–487.

  48. Priestley J (1967)Historical Account of the Navigable Rivers, Canals and Railways throughout Britain, 2nd edn. London: Frank Cass & Co. Ltd. (1st edition, 1831).

  49. Rudd C (1991) The changing structure of government expenditure. In: Boston, Martin, Pallot, Walsh (eds),Reshaping the State. Auckland: Oxford University Press.

  50. Sherrington CER (1969)Hundred Years of Inland Transport 1839–1933. London: Frank Cass & Co. Ltd.

  51. Tingle L (1993) Greens Hold Out Against the Budget.Australian 1 (September): 1.

  52. Turnbull GL (1969) The railway revolution and the carriers response: Messrs Pickford & Company 1830–50.Journal of Transport History 2: 48–71.

  53. Webb S & Webb B (1913)English Local Government: The Story of the King's Highway. London: Longman, Green & Co.

  54. Wotherspoon G (1983) Introduction: the development of Sydney's transport. In: Wotherspoon G (ed)Sydney's Transport: Studies in Urban History. Sydney: Hale & Ironmonger.

  55. William AW (1991) A guide to valuing transport externalities by hedonic means.Transport Reviews 11(4): 311–324.

  56. Williams AW & Kolsen HM (1993) Federalism and transport policy: the Australian experience.Atlantic Economic Society Conference, 7–14 April, Brussels.

Download references

Author information

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Williams, A.W. Should the user pay?. Transportation 22, 115–134 (1995).

Download citation

Key words

  • funding
  • interregional roads and railways
  • taxes
  • tolls
  • user-pays