When tolls are legitimately charged,
they are traditionally seen as user-pays fees intended to recover the
cost of building and maintaining infrastructure. This is a form of cost
recovery, not strictly a "tax" in the conventional sense, though it
functions similarly. Although the States have some power to levy fees to
pay for public services and infrastructure. Section 90 of the
Constitution limits States from imposing duties of excise (a type of
tax) on goods or commerce that power belongs exclusively to the
Commonwealth. Section 92 guarantees free trade and movement, which tolls
arguably restrict if they become a permanent economic barrier.
Federation in 1901 did not create an
explicit, written “right to freedom of movement” in the style of a bill
of rights. However, it established a unified legal and political
framework particularly through Section 92 of the Constitution that the
High Court has interpreted to imply a constitutional guarantee of
freedom of interstate movement (as part of “intercourse among the
States”).
This freedom is generally protected,
but it is not absolute. In rare circumstances, such as during a
pandemic, reasonable and proportionate restrictions may be upheld
provided they serve a legitimate, non-protectionist purpose, such as
public health.
There is no clear constitutional power that allows private,
especially foreign-owned, companies to charge tolls purely for profit on
public roads in Australia. The original purpose of tolls was to recover
the cost of building and maintaining infrastructure not to generate
ongoing profit. While governments can fund roads through user charges,
once tolling becomes a tool for private profit rather than public
service, it risks straying beyond the intended scope of constitutional
powers. The Constitution gives the Commonwealth and States power over
trade, commerce, and roads, but it does not explicitly authorise the
outsourcing of essential public infrastructure to private entities for
commercial exploitation.
Not even under State constitutions,
is there express or inherent power for this that clearly allows private
or foreign owned companies to charge tolls purely for profit on public
roads. State governments may authorise toll roads, but the power to do
so is meant to serve a public purpose usually to recover the cost of
construction, maintenance, or operation of the road. Turning tolls into a
permanent profit making scheme for private companies, especially
foreign-owned ones, raises legal and constitutional concerns, including
Accountability and Sovereign control of public infrastructure.
In Vanderstock v Victoria,
the High Court ruled that a State-imposed charge on electric vehicle
use (the ZLEV road-user charge) was an excise, and therefore
unconstitutional under section 90 of the Australian Constitution.
Section 90 gives the Commonwealth exclusive power to impose duties of
excise, meaning the States cannot impose taxes on goods including
charges imposed for their use or consumption. The Court took a broad
view of what counts as an excise, holding that it can include charges on
the use of goods, not just their sale or production. This decision
widened the scope of what is considered an excise beyond traditional
manufacturing taxes. A charge imposed by a State on the use of a good
(like a car on a public road) may now be unconstitutional if it’s
effectively a tax, even if it's not called one.
So if a toll is charged by a
private company under State legislation, and the toll: Applies to the
use of vehicles (goods), and is not directly tied to the cost of
providing infrastructure, and, Generates ongoing profit, especially for
foreign-owned entities, then that toll could be constitutionally invalid
under the logic of Vanderstock, because it may function as an excise duty, which States are not permitted to impose.
In Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263
In this case, Latham CJ gave a widely accepted definition of a tax:
“A tax is a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered.”
One needs to ask the
question is a toll charged by a public authority for a public purpose
and not a payment for services rendered? Essentially a charge imposed by
a State on the use of a good (like a car on a public road) may now be
unconstitutional if it’s effectively a tax, even if it's not called one.
Below is a draft letter to send to your representitives raising the
above concerns, get behind this and soon we could see this
unconstitutional charge removed giving relief to all Australians.
Victoria
To:
The Hon. xxxxxxx xxxxxxxx
Minister for Infrastructure / Member for xxxxxxxxxxx
Parliament of the State of xxxxxxxxxxx
[Address]
Reclaiming the Constitutional and Public Principle of Absolutely Free Movement on Australian Roads
Dear xxxxxx xxxxxxxxxx,
I am writing to express my deep
concern regarding the continued tolling of Australian roads particularly
those that were built or co-funded using public money and the
constitutional and public policy implications this practice raises.
Historically, tolls were imposed to recover the cost of building
essential public infrastructure, such as the Sydney Harbour and West
Gate Bridges. These tolls were removed once construction debts were
repaid. This approach reflected the public interest and aligned with the
intent of the framers of the Constitution that travel and commerce
within our federated nation should be “absolutely free,” as enshrined in
Section 92 of the Commonwealth Constitution, which states:
“Trade, commerce, and
intercourse among the States, whether by means of internal carriage or
ocean navigation, shall be absolutely free.”
However, the current model whereby
roads originally funded with taxpayer money have been handed over to
private and, in some cases, foreign-owned corporations under long-term
tolling contracts is a serious deviation from that principle. For
instance, Transurban collected over $3.2 billion in toll revenue during
the 2023–24 financial year. These revenues are not merely paying off
infrastructure; they are enriching shareholders and, in many cases,
leaving Australians with no real alternative routes.
Despite this, I am more than willing to pay future tolls, on the following strict conditions:
-
The toll is used solely to repay the cost of building and maintaining the road, as the framers of the Constitution intended.
-
The toll is not for the profit of any private or foreign corporation.
-
All toll revenue forms part of the
State’s Consolidated Revenue, as a legal required under Section 89 of
the Constitution Act 1975 (Vic), which states:
“All taxes imposts rates and duties and all territorial casual
and other revenues of the Crown in right of the State of Victoria
(including royalties) which the Parliament has power to appropriate
shall form one Consolidated Revenue to be appropriated for the public
service of Victoria…”
-
That satisfactory and lawful response is provided in relation to the following key legal and constitutional matters:
With respect to Legal and
Constitutional Concerns Regarding Toll Revenues Used for Private or
Foreign Profit: While tolls have traditionally been justified as
user-pays mechanisms to recover the cost of building and maintaining
public roads, serious constitutional and legal concerns arise when tolls
are imposed indefinitely and used to generate profit for private
particularly foreign-owned corporations.
Under the Commonwealth of Australia Constitution, the following key provisions are relevant:
COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT - SECT 90
Exclusive power over customs, excise, and bounties.
“The power of the Parliament to impose duties of customs and of excise… shall become exclusive.”
This provision prohibits States
from imposing duties of excise, which are broadly interpreted to include
any tax on goods or services prior to consumption, including charges on
the use of infrastructure related to commercial activity.
In Vanderstock v Victoria (2023),
the High Court ruled that a state-imposed electric vehicle levy was an
unconstitutional excise, reinforcing the principle that States may not
impose such charges outside Commonwealth authority. By extension, it is
arguable that tolls functioning as revenue-raising measures, especially
when paid into private profit streams, may also constitute an invalid
excise.
COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT - SECT 92
Trade within the Commonwealth to be free.
“Trade, commerce, and intercourse among the States… shall be absolutely free.”
Toll roads, especially when no
viable free alternative exists, create economic and physical barriers to
movement. When these barriers are imposed perpetually, and not for
infrastructure cost recovery, they arguably breach the constitutional
guarantee of absolutely free intercourse among the States, particularly
if they apply to essential routes of trade or migration.
A clear Violation of Public Revenue
Principles: According to Section 89 of the Constitution Act 1975 (Vic),
all revenue raised by the State must form part of the Consolidated
Revenue, and be appropriated for the public service unless it is
specifically provided for.
“All taxes imposts rates and duties… shall form one Consolidated Revenue to be appropriated for the public service of Victoria…”
Toll revenue that is directed to
private or foreign-owned corporations instead of the State's
Consolidated Revenueviolates this principle. Such arrangements bypass
parliamentary accountability and the public interest, creating a
two-tiered system where movement is monetised for profit rather than
governed as a public service.
In light of the above, I respectfully request that your office:
-
Review the legality and fairness of long-term tolling arrangements in light of Sections 90 and 92 of the Constitution.
-
Ensure that all toll revenue is
publicly accounted for and forms part of the State's Consolidated
Revenue, in accordance with Section 89 of the Constitution Act 1975 (Vic).
-
Propose legislative and
constitutional reform, where necessary, to restore the principle that
movement on publicly funded infrastructure should be absolutely free.
-
Consider initiating or supporting a
broader constitutional inquiry into the modern meaning of “absolutely
free” movement, particularly as it relates to public-private
partnerships and the monopolisation of essential roadways.
This is more than a legal issue it
goes to the heart of our shared national identity. Roads are not a
luxury service; they are a fundamental element of public infrastructure.
If everyday Australians cannot move freely without paying for the
privilege, we have strayed far from the original vision of a fair and
united federation.
Thank you for your time and consideration. I look forward to your response.
Yours sincerely,
PLEASE NOTE:
The consolidated fund argument does not apply in NSW or Queensland.
_______________________
Source:supplied
