Motorists should pay to drive in the CBD, new report says

Wide shot of the Melbourne CBD looking down from the sky.

Sue Hewitt

Posted October 21, 2019

Grattan Institute says motorists should pay $10 congestion tax to drive into CBD.

The Grattan Institute wants drivers to be charged $10 to drive in and out of the city during the morning and afternoon peaks to reduce congestion and fund upgrading streets for pedestrian safety.

Under its plan a $5 fee would be charged from 8am to 9.30am and from 4pm to 6pm, with a $3 charge in the 30 minutes before and after the morning peak and one hour before and 30 minutes after the afternoon peak.

The report estimates such a charge would reduce the number of cars entering the city in the morning peak by 40 per cent and increase city road speeds by up to 16 per cent.

RACV's Bryce Prosser, general manager public policy, believes the introduction of a congestion charge in the CBD alone will not solve Melbourne’s transport problems.

He says although modelling undertaken by the Grattan Institute identifies some potential benefits of a peak period congestion charge in the CBD, a number of issues – such as the capacity of the public transport network and management of alternative routes – need to be addressed.

“RACV supports a road pricing system across the transport network, in which drivers would be charged according to the weight of their vehicle, time, location and distance travelled,” he says.

“We believe the introduction of this system is inevitable as it helps manage demand across the network, not just in the CBD. We would like to see a clear link between road taxes paid and government investment in transport infrastructure.”

The institute recommends new road charges be introduced in three stages: first a CBD congestion charge then, within five years, a fee for using urban freeways and arterial roads, and eventually expanding the system to include a kilometre-based charge for motorists driving in designated areas. 

It proposes using automatic number-plate recognition technology to charge motorists travelling in designated areas during peak times. 

The Andrews government reacted swiftly to the report’s recommendations, ruling out a congestion charge.

But the Grattan Institute’s transport and cities program director, Marion Terrill, says it’s time for governments to rethink their position and follow the lead of cities such as London, Stockholm and Singapore which have introduced congestion charges.

She says no feasible amount of road building or increasing public transport capacity can really remove excessive congestion. “Those major roads cost billions of dollars whereas a congestion charge, as well as making the road network more efficient, can make a positive contribution to the [state government] budget,” she says.

The Grattan Institute’s modelling shows that a CBD congestion charge would improve driving times across the road network by about one per cent, equal to the travel-time savings expected from the $6.7 billion West Gate Tunnel and the scrapped $5.3 billion East West Link. Average speeds would increase up to 16 per cent across CBD roads and by up to 20 per cent on sections of major arterial roads leading to the CBD, according to the modelling.

Marion says it is a myth that most workers converge on the CBD to work. “In Sydney and Melbourne, only about 15 per cent of jobs are located in the CBD,” she says.

A recent Melbourne City Council transport report found that 200,000 cars travel in the Hoddle Grid daily, and 43 per cent of it is through traffic.

Marion says a congestion charge would “ration” scarce road space during peak periods, so that motorists who want to use high-demand roads at high-demand times would be prepared to pay while others would seek charge-free alternatives.

“Congestion charging is an effective way of rationing scarce road space, just as we ration other in-demand goods. [It’s] the least painful way to manage congestion. It changes which drivers are on the road in peak periods and encourages those who can be flexible to take their trip at another time. It’s much cheaper than road construction and even raises some money.”

She says in the long term, congestion charges would influence people’s decisions about where to live and where to locate commercial premises “that work better for individuals and the community”.