Driving crazy2

Mingguan Malaysia on 20 June reported the total number of motor vehicle registered in Malaysia is 14.3 million units. Forty percent of the vehicles are motorcyles and the balance of about 8 million are cars. With growth of new vehicle registered at about 6 percent per year we will soon be running out of roads and space. The demand for roads according to economist is an inverse function: it grows even though the average cost of using the road is higher. It will reach equilibrium when the demand intersect with the average cost of road usage. To discourage this unhealthy growth the economist will say price the road usage at marginal social costs, which is much higher than the average cost. The concept of externality take into account the external costs such as pollution and congestion into account, whose costs are external to that of the car owner.

Even at the current average cost of using a car in Malaysia, already quite high relative to the services offered in return, the govt has collected substantial sum without putting it back to the motorist. Just assume that the average road tax per vehicle is RM200 per annum and multiply it say with 10 million vehicles, the road tax revenue per annum will amount to about RM 2 billion. This exclude the other charges that the car owner must bear: with excise duty on petrol your total cost grow with the mileage you travel. There are also duty on parts and tyres and also the progressive rate of excise duty on vehicles at time of purchase. If the govt collect say RM 10 billion in revenue from car owners per year and put it back in expenditure of only RM 2 billion, and the bulk of it goes to toll highway concessionaires, then the govt has robbed the poor to give it to the rich. On the average motorist also incur additional charges of, on the average, RM 200 toll per month. Imagine how much car owners has to pay year in year out to the rich concessionaire holder, usually described as cronies,who cheated consumer by building highway at inflated costs.