Article: City congestion tax to ease gridlock

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City congestion tax to ease gridlock

City congestion tax to ease gridlock

    Peter Rolfe
    From: Sunday Herald Sun
    June 19, 2011 12:00AM

MOTORISTS should be slugged with a city congestion tax to unlock Melbourne's gridlock, according to a report being considered by the Baillieu Government.

The plan - which could see cars and trucks charged up to $10 each time they enter the CBD and inner suburbs - is part of a state-wide infrastructure inquiry ordered by Treasurer Kim Wells.

"The economic case for congestion charging is strong, and the political challenge becomes easier if some or all of the revenue is channelled into road and public transport improvements," the report finds.

Economic consulting firm Acil Tasman presented the submission to Mr Wells as part of the Government's Victorian Competition and Efficiency Commission investigation.

The car-tax call, contained in the 188-page report released on Friday, highlighted Melbourne and Sydney as cities that would benefit from a congestion tax.

Acil Tasman infrastructure director David Greig said the cost would depend on the time of day or night a driver used the tollway and the roads they used.

He said the introduction of a congestion charge in Melbourne was no longer in the "too-hard basket".

"It's now on the radar screen," he said.

"Many ministers have started mentioning it as a long-term possibility and put it on the horizon. It's not a radical idea anymore, it's a major thing."

The report concludes that a steady increase in traffic congestion in Melbourne means there is a "strong case" for the State Government to start charging motorists for the right to enter the city.

The report states: "Congestion charging, combined with public transport improvements ...would improve travellers' well-being and improve the efficiency with which Melbourne operates."

According to the report, congestion has slowed average traffic speeds in Melbourne by 5km/h since 1998.

Urban congestion taxes already operate in Singapore, Stockholm and London, with other international cities also considering introducing the charge.

The report has not set out a price guide or nominated streets where the tax would apply.

But in 2005, the Business Council of Australia estimated a $10 tax on each car entering the city would allow peak morning travel speeds to double to 26.5km/h by 2021.

London's congestion charge is $15 a day if purchased on the day of travel. Congestion has fallen by 20 per cent since London introduced its tax in 2003.

The report notes that the introduction of time-varying, one-way tolls on the Sydney Harbour Bridge and Tunnel has increased off-peak traffic and reduced rush-hour traffic.

It sheds some doubt, however, on whether a similar toll would work on the Westgate Bridge.

"The Westgate Bridge is heavily used all day and congestion charging there, while justifiable, would not provide a solution," it says.

Government spokeswoman Kate Walsh said the issue would be considered as part of the overall report.

"The Government encourages all community members and businesses to make submissions to the VCEC inquiry on measures that could improve Victoria's productivity and competitiveness," she said.

"The inquiry is due to report to the Government in January 2012 and the Government will consider recommendations when it receives the full report."

Former Federal Treasury secretary Ken Henry last year estimated congestion charges on Melbourne's roads would cost the average Melbourne resident $1290 a year by 2020.

He said the social costs of congestion would amount to almost $6 billion a year by the same stage.