For decades, Victoria has maintained a system of vehicle registration and compulsory insurance (TAC) that, on the surface, appears straightforward: every car owner pays a fixed registration fee and a flat TAC levy. In practice, however, the system is anything but fair. It treats all passenger vehicles nearly the same, regardless of their size, weight, or potential to inflict damage — whether on other people or on public infrastructure. This approach not only burdens owners of smaller, lighter vehicles, but also ignores basic economic and social logic about shared risk, equity, and sustainability.
The time has come for a more equitable, practical, and efficient system, one that is grounded in fairness rather than ideology, and designed to reflect the real costs that different vehicles impose on society.
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1. The Flaw in a Flat TAC Levy
Currently, the TAC charge in Victoria is a flat-rate premium added to registration. A Toyota Yaris pays nearly the same as a LandCruiser, a Hilux, or even a commercial van. The rationale given is simplicity and pooled risk: the no-fault scheme ensures every accident victim is treated, regardless of fault. Yet simplicity does not equal fairness.
Small, light vehicles: Low mass, smaller engines, lower speeds, reduced crash impact. They inflict minimal road damage and present far lower risk in collisions.
Large SUVs, utes, vans, and trucks: High mass, stronger engines, and heavier loads make them more likely to cause serious injury in accidents and accelerate wear and tear on roads and bridges.
By applying the same levy to these radically different vehicles, the system penalizes low-risk drivers and subsidizes the risks created by heavier vehicles. It is, in effect, a hidden wealth transfer from safe, light-vehicle owners to those driving higher-risk vehicles — a transfer that makes no sense, economically or ethically.
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2. Shifting Medical Costs to Medicare
A core part of the current TAC model is duplicating medical coverage already provided through Medicare. Every motorist pays for hospital treatment and rehabilitation that could already be covered by universal healthcare. By moving the medical component of TAC into Medicare, Victoria could:
1. Reduce redundancy in public spending
2. Focus TAC funds on rehabilitation, income support, and accident-related social care that truly fall outside Medicare’s remit
3. Lower the visible cost burden on motorists, particularly those with smaller vehicles who are currently subsidizing the larger ones
This simple shift would cut TAC costs roughly in half, making registration far more affordable while maintaining no-fault coverage for accident victims.
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3. Introducing a Risk-Weighted TAC System
Fairness does not mean equal payments; it means payments proportionate to the risk and potential damage caused by the vehicle. A practical model could look like this:
Vehicle Type TAC Multiplier Rationale
Micro / Light Small (Yaris, Mazda 2) 0.7 Minimal risk, low road impact
Small (Mazda 3, Ford Focus) 1 Standard baseline risk
Medium (Large sedans, mid-sized SUVs) 1.4 Increased mass and potential injury
Large SUVs / Sedans 1.7 High mass, higher crash impact
Vans < 6T 2.2 Commercial use, heavier road wear
Heavy trucks / Semi-Trailers 3.5 Max road damage, highest accident severity potential
Under this system, a Yaris pays substantially less than a Hilux, a van, or a semi-trailer, reflecting the real-world burden each vehicle imposes. Road trauma, infrastructure damage, and accident risk become the key determinants of cost — not arbitrary flat fees.
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4. Equilibrium, Not Equality
It is crucial to understand that this system is not communist. Equity does not require that everyone pay the same or share every cost equally. People eat, work, and live with different needs and resources. Fairness in registration and TAC should mean:
Drivers of smaller, safer cars are not subsidizing those who choose heavier, more dangerous vehicles
Heavier vehicle owners contribute proportionally to the social and infrastructural costs they create
Medical costs are efficiently funded through existing systems (Medicare) rather than duplicating charges on car owners
This is economic equilibrium, not ideological redistribution. The goal is to balance contributions with societal risk, creating a system that is livable, rational, and sustainable.
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5. The Role of Administration and Technology
Recent administrative reforms, such as removing physical registration stickers and digitizing records, should reduce operational costs. Yet, fees continue to rise despite these efficiencies — a classic case of profit creep. A modern, AI-assisted administration system should pass these savings back to motorists, further reducing rego costs and TAC burdens.
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6. Why This Matters to Everyone
Fair roads benefit everyone. Consider:
Lower-income drivers with small cars: Currently overpay relative to risk; a fairer system would relieve them of an unfair financial burden.
Large-vehicle owners: Still pay a fair share of road and accident costs; incentives exist to consider safer or lighter vehicles.
Society as a whole: Less duplication, more efficient public spending, better alignment between cost and risk, and a rational framework for future transport policy
Ultimately, fairness drives efficiency, reduces hidden subsidies, and ensures the social contract aligns with reality.
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7. Conclusion
Victoria’s vehicle registration and TAC system can be transformed from a blunt, inequitable flat-fee model into a risk-weighted, equity-based, efficient framework:
1. Medical care shifted to Medicare
2. TAC limited to income support, short-term rehabilitation, and accident-related social support
3. Risk-weighted contributions by vehicle size and road impact
4. Administrative efficiencies passed through to motorists
5. Equilibrium over equality: fairness reflects real-world burden, not ideological uniformity
This is a system where fairness, common sense, and sustainability intersect. Drivers of small, safe vehicles are rewarded with lower costs. Heavier, riskier vehicles contribute proportionally to the social and infrastructural burden they create. Taxpayers see less duplication. Roads are safer. Injured Victorians continue to receive support.
In short, this model works for people, not for revenue extraction. It’s practical, not ideological, and it’s long overdue.
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Epilogue — Risk-Weighted TAC and Registration
Vehicle Type TAC Multiplier TAC (post-medical shift, $286 base) Admin Fee ($343) Total Rego (no concession) Total Rego (LIHCC)
Micro / Light Small (Yaris, Mazda 2) 0.7 $200.20 $343 $543.20 $371.50
Small (Mazda 3, Ford Focus) 1 $286 $343 $629 $457.50
Medium (Mondeo, mid-sized SUV) 1.4 $400.40 $343 $743.40 $571.90
Large SUV / Sedan (Prado, Explorer) 1.7 $486.20 $343 $829.20 $657.70
Commercial Van < 6T 2.2 $629.20 $343 $972.20 $800.70
Heavy Truck / Semi-Trailer 3.5 $1,001 $343 $1,344 $1,172.50
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Key Takeaways from the Table
1. Fairness for small vehicles: Micro/light cars pay substantially less, reflecting low risk and minimal road damage.
2. Proportional responsibility: Larger vehicles, commercial vans, and semi-trailers contribute more to the TAC pool, in proportion to potential damage and accident severity.
3. Equity over equality: Payments align with risk, not ideological “everyone pays the same” principles.
4. LIHCC support: Low-income drivers still benefit from reduced admin fees, enhancing accessibility.
5. Revenue-neutral potential: System maintains TAC revenue while creating a fairer, more transparent distribution of costs.
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Extended Epilogue — Before vs After: TAC & Registration (Postcode 3012)
Vehicle Type Current TAC ($573) Admin Fee ($343) Total Rego (Current) TAC Multiplier (Proposed) TAC (Proposed) Total Rego (Proposed, no concession) Total Rego (Proposed, LIHCC)
Micro / Light Small (Yaris, Mazda 2) $573 $343 $916 0.7 $200.20 $543.20 $371.50
Small (Mazda 3, Ford Focus) $573 $343 $916 1 $286 $629 $457.50
Medium (Mondeo, mid-sized SUV) $573 $343 $916 1.4 $400.40 $743.40 $571.90
Large SUV / Sedan (Prado, Explorer) $573 $343 $916 1.7 $486.20 $829.20 $657.70
Commercial Van < 6T $573 $343 $916 2.2 $629.20 $972.20 $800.70
Heavy Truck / Semi-Trailer $573 $343 $916 3.5 $1,001 $1,344 $1,172.50
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Observations: Before vs After
1. Micro/Light Small Cars
Current: $916 rego
Proposed: $543 rego (↓$373), LIHCC = $371 (↓$374)
Benefit: Small, low-risk drivers pay far less; subsidy from heavy vehicles removed.
2. Small Cars
Current: $916
Proposed: $629 (↓$287), LIHCC = $457 (↓$259)
Benefit: Fair cost reflective of moderate risk.
3. Medium & Large SUVs
Current flat fee masked risk
Proposed: $743–$829 (medium increase for heavier vehicles)
Rationale: Larger mass → higher crash impact, more road wear.
4. Commercial Vans & Heavy Trucks
TAC multiplier aligns with road damage, payload, and accident severity
Proposed: $972–$1,344 total rego reflects proportional contribution
Rationale: Ensures those who impose the greatest social and infrastructure costs pay their fair share.
5. Overall Fairness
Small, efficient cars rewarded with lower costs
Heavier, riskier vehicles contribute proportionally
System is equity-driven, revenue-neutral, and more transparent
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Key Takeaways
The flat TAC model currently creates hidden subsidies and penalizes responsible low-risk drivers.
The risk-weighted TAC approach redistributes cost fairly without reducing total revenue.
Medical coverage is efficiently handled by Medicare, avoiding duplication.
Administrative savings (AI, digitization, removal of physical stickers) could further reduce fees for everyone.
The system balances practical fairness, economic efficiency, and social responsibility — not ideological equality.
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