Melbourne could become the first Australian city to introduce a user-pays road pricing system, following in the footsteps of global capitals such as London, Stockholm and Singapore.
A discussion paper released by the City of Melbourne proposes road user pricing system as a way of cutting congestion and “boosting Melbourne’s liveability”.
Councillor Nicolas Frances Gilley, who chairs the council’s transport committee, said Productivity Commission and the ACCC had already flagged the idea as necessary and it will be impossible to “build our way out of congestion with new roads” if the city is going to have a population of 8 million by 2050.
“There are a few different options for introducing road pricing, it can be a sum charged per kilometre or per trip, or a charge within a particular zone and these can be altered based on peak traffic periods,” he said.
“Trials have shown that charging in this way, instead of a lump sum for vehicle registration once or twice a year, encourages people to avoid driving at certain times where possible or switching to another mode of transport instead.”
Frances Gilley points to Stockholm where people switched to public transport and car commuter trips fell by 24% as an example of the benefits on a congestion tax.
“A leading global example is Oregon, USA, where a pay-per-mile distance charge was introduced in a voluntary trial that saw participants driving 22% less during peak. After the trial 91% of the participants preferred the new system,” he said.
In London, motorists pay an £11.50 ($AU20.50) daily charge in a zone ringing the CBD if they enter between 7am and 6pm on a weekday.
The idea for a user-pays road system comes amid growing concerns about budget shortfalls for the federal and state governments due to declining fuel taxes as people switch to more fuel-efficient and electric cars, sparking a hunt for new revenue streams.
The council proposal would replace car registration fees with an e-tag charging drivers at varying rates, depending on the time of day and location, with surges during peak periods.
It would be opt-in system, beginning initially in the CBD. The council controls around 70% of 342 kilometres of roads in the local government area. And while it lacks the power to introduce road charges outright, it’s currently preparing a 30-year transport strategy looking at a range of issues, including parking.
While Sydney does not have a congestion tax, the city is increasingly covered in toll roads and the state Coalition government has begun offering registration refunds for motorists who spend more than $25 a week on Sydney’s toll roads on an annual basis.
However, the City of Melbourne proposal was quickly kyboshed by both sides of Victorian politics ahead of the November election.
Roads Minister Luke Donnellan said the Labor government had “no plans to introduce a congestion tax or to replace car registration with a road user charge”. Liberal roads spokesperson David Hodgett said he was more likely to play alongside Dustin Martin for Richmond.
In a speech earlier this year, Productivity Commission chairman Peter Harris, said “the current lack of effective pricing for roads can be explained by the lack of good crisis”, before warning “a crisis may be near to hand”.
“The revenue crisis means we will need another source of road charging in the 2020s, lest all the owners of fossil fuel guzzlers end up subsidising all the hybrid and fully electric drivers,” he said.
“Here in Melbourne, we have a natural experiment going on with free road transport. The trams are free in the CBD. Which means on wet week-nights, those wanting to go one or two stops and keep out of the rain pack in and prevent those who need the tram in order to get home from getting on. When road use is free, demand keeps piling in.
“Free is not all it’s cracked up to be.”
Cr Frances Gilley said the council was seeking feedback on the idea of a user-pays system for Melbourne’s streets.
Consultation closes on July 31, 2018.
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