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Drivers could cop $12 return fee for peak hour commutes through the CBD

(Source: Getty)

The government has long been searching for a solution to the congestion in Australia’s CBD, and now a public policy think tank has proposed the following solution: pay for it.

In a report released today, Grattan Institute transport and cities program director Marion Terrill proposed a three-stage reform across five years where drivers would pay a charge to cross a certain boundary into the CBD at morning and afternoon peak.

“Within the following five years, people should pay to drive along the busiest urban freeways and arterial roads at peak periods; and eventually people should be charged on a per-kilometre basis for driving across the city’s entire road network at the busiest times,” she said.

The charge would reduce traffic by 40 per cent at morning peak, speed up roads by 16 per cent in the CBD and up to 20 per cent in major roads leading into the CBD.

“Everyone wants less congestion: it would make life easier for individual drivers and make our cities work better, too,” she said.

“This plan tackles congestion without asking communities to pay billions of dollars for major new roads.”

If Australia’s capital cities took up this plan, we would join other global cities in doing so, Terrill said.

“New York, London, Beijing, Singapore, Stockholm, Milan, and Jakarta all have congestion charging or are heading that way. It’s time for Australian cities to embrace the idea.”

Australia currently has a large pipeline of infrastructure projects underway: in the April 2019-20 federal budget, the Morrison government promised to set aside $100 billion over 10 years on infrastructure.

(Source: Grattan Institute; budget papers)

Why is congestion charges a good idea?

According to the Grattan Institute, there are several reasons why congestion charging is a good idea to manage congestion:

  • Pricing an in-demand service (i.e. roads) the same way other goods and services are priced, such as electricity, mail delivery, and visits to the doctor, would help manage the volume of drivers;

  • Congestion charging would directly target excessive traffic;

  • Congestion charging has been proven to work in cities around the world;

  • Modelling suggests congestion charging would work in Sydney and Melbourne, Australia’s two biggest cities;

  • Congestion charging would be the least painful way to manage congestion;

  • Congestion charging leads to a better allocation of scare space; and

  • Congestion charging is cheaper than other methods (and can even raise money); and

  • In the long term, congestion charging would help Aussies make more sensible decisions about where to live.

How much would this ‘congestion charge’ cost me?

Grattan Institute senior associate Greg Moran told Yahoo Finance the cost would be similar to those travelling on public transport.

“The charge might be similar to what people currently pay to access the CBD by public transport, so around $3 to $6,” he said.

“The charge would apply for entering the CBD in the morning peak and leaving the CBD in the afternoon peak.”

Concerns ‘overblown’

According to the report, it’s those banking more that will be hit by this, not low-income earners.

Terrill said concerns that it would hit those who would least be able to afford it were “overblown”.

“In fact the charges would mainly be paid by higher-income drivers, because people who drive to the city each day for work are more than twice as likely to earn a six-figure salary as other workers,” she said.

It’s also typically higher-income workers who drive further for work, not lower-income earners, Terrill added.

“Nor is it true that people have no choice but to drive; CBDs are well-serviced by public transport, and most people already get to the city by train, tram, or bus.

“In the end, if particular roads are in high demand, it’s fairer that people who use them a lot pay more than those who rarely or never use them.”

Congestion charges should not be without safety nets, either: discounts should be afforded to low-income earners with impaired mobility that need to get into the CBD during peak hours.

The Grattan Institute will release another report next week detailing how congestion charges might look like in Sydney and Melbourne.

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