Economist: Monitoring good but will not generate revenue

Alt hough the proposed centralized information technology system will improve the overall database of road users, it would not provide much revenue to the state, an economist says.
The Institute of National Affairs, Executive Director, Paul Barker, said the administration of licensing would be valuable and should improve road usage management, verification of qualifications, licensing and standards, and provide some improvement in revenue.
He said this should be as long as the contracting of the system was undertaken through a transparent and competitive process.
“It should be thought out well and not become as the Lands database, which was never properly tendered and then the cost blew out severely, with the facility seemingly never being fully operationalised.”
Barker said the centralised information technology system would see some increased revenue to consolidated revenue, through the new requirement that 90 per cent of revenue collected by regulatory authorities
was transferred to the consolidated revenue fund, rather than retained by respective authorities.
He said the more substantial revenue came in from the fuel excise and that should increase considerably as a result of the raising of the diesel excise from 10 toea to 23 toea to progressively bring it on a par with petroleum (raising it to 36 toea in 2019).
“There are significant concerns over the inflationary effect of this, especially on the cost of living for poorer households, who are especially dependent upon transported staple foods and public transport.
“Fuel excise was to have been allocated substantially to provide a more consistent funding contribution for highway maintenance through the National Road Authority (NRA).
“But the portion going to NRA was kept down and now, with the general revenue squeeze, the government is seeking to drain much of the funding back from the statutory authorities into consolidated revenue to cater for general expenditure.
“And the NRA’s portion of the excise is still retained at 4 toea out of the 23 toea,” Barker said.
“A few authorities certainly have accumulated substantial nest eggs, in excess of what was needed for their regulatory or operational purposes.
“This is notably the National Fisheries Authority, which was accumulating a large portion of the proceeds of licensing fees which should largely have been transmitted to State revenue, rather than being invested by NFA in urban real estate.
“However in most cases the authorities’ fees and levies barely cover their operational costs, and the transfer of proceeds back to the State will risk severely undermining their operational capacity,” he said.
Barker said it may be noted that generally, though not always, the statutory authorities were more functional than many of the department.
“So the process may undermine rather than enhance government’s overall weak capacity, albeit perhaps provide some overall improved oversight of public finance, and enhance the executive’s control over public funds.”
The centralized information technology system which will be used by the Road Traffic Authority to monitor vehicle registration and driver licensing with other integrated services is still pending approval by the Central Supply and Tenders Board.