But earlier this month, a leading Australian economic bureaucrat – Australian Competition and Consumer Commission chairman Rod Sims – said he thought it could be a very good idea for road funding.

Indeed, a good example of hypothecation is the now-expired "3x3" road tax, where an extra 3c a litre on fuel was raised for three years and all the money was earmarked for roads. Another example is the Medicare levy.

When they think about it, taxpayers often like the idea of hypothecation, even if they are not familiar with the term. They think governments shouldn't siphon off all that fuel tax to spend on wasteful administration and other government spending. They should be made to spend it on roads.

However, treasuries usually do not like hypothecation because they like the flexibility of extracting the big easy taxes (fuel, alcohol and tobacco) to spend in areas that have no hope of raising tax (education, administration and so on).

As it happens, both the fuel tax and the Medicare levy are in a state of flux. For some years, the Medicare levy has not even come close to paying for universal healthcare.

But guess what? Neither are road taxes enough to pay for roads. I was surprised when Sims told the Australian Logistics Council's annual forum this month that road spending was greater than road taxes. I scrambled through the data and, sure enough, the $20 billion or so annual road spend had an average shortfall in road taxes of about $1 billion a year for the past four years.

The reason is that vehicles are getting more fuel-efficient and, with an ageing population, we are not travelling as much as predicted. So fuel taxes are not keeping up with the insatiable demand for more and better roads. And much of the blame for that goes to John Howard's removal of indexation of the tax in 2001. It was restored, but not retrospectively, in 2015.

Sims would like a radical change to fuel tax. He would like to see every vehicle fitted with GPS-driven telematics and charged according to road use: where, when and for how many kilometres they travelled and be charged accordingly. Hear, hear.

He warned that, in this debate, we should not to mention congestion taxes or we would frighten the horses. It would be portrayed politically as a "great big new tax". But for every politically unacceptable "great big new tax" that is not imposed, we have an insidiously growing tax burden through existing taxes that do not require legislative change to be raised.

Income tax is the prime example. Inflation and wage growth automatically allow the tax grim reaper to silently scythe an extra share of income tax without a pencil being marked on the legislative drawing board.

It would take courage, but a new regime of GPS telematics-charging for road use would be the best way to prevent the looming road tax unfairness, if only we could convince people it would not be seen as a great big new tax – with the emphasis on "new". In the tax field, people who benefit from existing tax regimes that have become inequitable over time play on the fear of "new". They should be called out. We should be constantly tweaking tax regimes to make sure circumstances do not render them unfair – as the fuel tax surely is.

You see, all those wealthy, trendy, latte and chardonnay-sipping greenies with their electric cars powered from batteries charged by rooftop solar on their owner-occupied homes will pay virtually no fuel tax in the future, yet they will use the roads like everyone else. Meanwhile, people renting in Struggletown with the six-cylinder gas-guzzling banger will be paying (pardon the pun) through the roof.

There is a looming equity issue here. Circumstances change. Politicians are too timid and weak to address it because they are accused of raising taxes so the existing tax regimes – with their creeping inequality, and which are so easy for politicians not to change – reap the whirlwind on those who can least afford it.

I am sure our agile, innovative Prime Minister will quickly see the point, but will not redress it.

Now to Medicare. Like roads, it, too, is not raising enough to cover the cost. The 1.5 per cent income levy goes nowhere near the $22 billion cost of Medicare and the extra 0.5 per cent levied for the national disability insurance scheme will equally fall short.

The Coalition likes this. It can resist raising taxes and convert a universal health and disability scheme into a "safety-net" system under which the aristocrats give the "deserving poor" a few morsels at their discretion, undermining the fundamental principles of universal health and disability care.

On health and roads, we are working the wrong way around. We should not set a levy (38.5 cents a litre or 2 per cent of income) and then apply it to whatever might be spent.

We should work the other way around. We should calculate how much we spent last year on Medicare and disability and next year apply a levy to meet that plus CPI or whatever growth measure you would like to apply, and legislate the formula.

We should work out how much we spent on roads last year and gather the necessary tax next year on the crude fuel tax now, but on the more refined telematics system in the future.

Hypothecation on a grand scale.

And when doing the Medicare levy, it should be based on income before negative gearing and superannuation deductions and after fringe benefits have been added. That's what happens with higher education and child support. And the high-income-earner surcharge should apply irrespective of private insurance.

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Former prime minister Paul Keating is spot on for opposing the move to allow first-home buyers to apply their superannuation balances to a deposit.

If you arm first-home buyers with an extra, say, $40,000 when they go to an auction, they will still be outbid by an investor. The net result will be just an increase in house prices by $40,000.

It would also drag money from worthwhile super investments in the share market and infrastructure, and put it precisely where it is not needed.

If you really want to address housing affordability (that is, cut house prices), you need to reduce demand. To do that, you must cut immigration. The big political donors will not like it, but there would also be a welcome reduction in congestion and infrastructure pressure that would help lots of Australians.

crispinhull.com.au