Private Cars Cost Hungary a Truckload of Euros

By Alexandru R. Savulescu

SZENTENDRE, Hungary, June 24, 2004 (ENS) - Each private car travelling on Hungarian roads costs the government seven times more than the revenues it brings in, claims a Hungarian environmental group. Other Central and Eastern European countries also subsidize private transport, the Hungarian Clean Air Action Group said at a sustainable transport workshop timed to attract the attention of European environment and health officials meeting this week in Hungary.

Only one-third of the traveling in Hungary’s capital, Budapest, is done by private cars, but they account for 90 percent of the city's air pollution, 97 percent of the accidents, and they use 98 percent of the land.

The other two-thirds of the traveling is done by public transport, which is only responsible for 10 percent of the air pollution and three percent of the accidents. Public transport uses just two percent of the land.

Traffic jam in Budapest (Photo courtesy Science Serving Society)

His presentation was made at the Stationed for Sustainable Transport workshop, organized by the Regional Environmental Center for Central and Eastern Europe in Szentendre Monday and Tuesday, as a back-to-back meeting with the Fourth European Ministerial Conference on Environment and Health that opened Tuesday in Budapest.

“If public transport has so many advantages, why is it losing ground to the private car?” asks Lukacs.

He believes that the government expects higher revenues from private cars than from public transport. Government revenue from cars in Hungary in 2004 is estimated at €1.7 billion from excise duty on fuels, registration taxes, and annual vehicle taxes, Lukacs says.

Cars appear to bring in more than the entire revenue of the Hungarian Railways for the same period of time, estimated at €1 billion, together with the revenue of the Budapest Public Transport Company, estimated at only €320 million.

But figures can be treacherous, says Lukacs. In reality, the state loses more on private transport than it earns.

In vehicle tax evasion alone, the loss is estimated in the range of €2.4 to €4 billion per year. Losses due to free parking, the occupation of public space without paying, is estimated to be in the range of €800 million to €1.8 billion yearly.

Train yard serving the city of Budapest (Photo courtesy REC)

The environmental costs are also high. The unpaid cost of transport due to environmental pollution, and accidents with hazardous materials is around €5.6 billion per year, according to a study conducted last year by the Organization for Economic Cooperation and Development.

The other environmental losses from the use of private vehicles include climate warming, air, water and soil pollution, noise and other vibration, land use, land fragmentation, habitat destruction, congestion, accidents, reduced mobility for others, and psychological problems, Lukacs points out.

The bottom line, he says, is that the government obtains €1.7 billion in revenues from cars only after spending almost €13 billion, which leaves it with a net loss of more than €11 billion annually.

To solve this problem, the Clean Air Action Group proposes severe measures to combat tax evasion, fuel tourism and smuggling.

The group also proposes less funding for motorway construction, higher registration taxes, higher annual taxes, higher parking fees, higher road pricing, and also the reduction of government subsidies for car manufacturers and oil companies.

But these measures could prove largely unpopular, warns Lukacs, if introduced without proper public information and consultation.

Presently, he says, the total amount spent yearly in Hungary for advertising – mainly for products harmful to the environment – is €800,000 million, while only €0.8 million is spent for advertising promoting environmentally friendly behavior.