Over recent years, including at the time of the BITRE 2009 report, different methods of evaluation have been utilised in the absence of a nationally agreed methodology for valuing road trauma. ECON finds that for the 2015 calendar year the total cost of road trauma was $29.7 billion (using the “willingness to pay for road safety” methodology included in the BITRE 2009 report). This is an increase (in nominal terms) from the $27 billion per annum derived in 2006 prices.

The Australian Government Office of Best Practice Regulation (OBPR) has published its own methodology and ECON utilises this method to derive the base case estimates for the report. Based on the OBPR methodology, ECON finds that for the 2015 calendar year:

  • the total cost of road trauma is estimated at $22.2 billion
  • the economic cost of each road fatality was $4.34 million
  • the cost per hospitalisation caused by road injury was $239,000

The ECON report also estimates that the direct cost to government for only one year’s worth of trauma – as distinct from the total economic cost – was more than $3.7 billion.

Of the $3.17 billion cost to government of:

  • Immediate responses to road trauma in health, emergency services and other areas incur $945 million of this cost in the first year after a crash.
  • More than three quarters of this cost comprises the present value of future years of forgone taxation revenue and additional income support payments arising directly from road crash deaths and disabilities.
  • The need to provide additional health services represents 11.8 per cent of this cost.

The ECON report suggests that there were several factors that contributed to the change in the cost of road trauma from 2006 to 2015. The change in total cost can largely be explained by a decrease in fatalities and disabled persons as well as casualty aging which all put downward pressure on total costs. Factors that contributed to an increase included an increase in hospitalised and non-hospitalised injuries as well as total road crashes and increases in health costs.