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Is it time to get serious about road pricing?

By Alan Davies - posted Friday, 23 September 2016

Recent positive comments by urban Infrastructure Minister Paul Fletcher indicate it's time for governments to actively pursue implementing road pricing in Australia

Motoring taxes and charges currently paid ($2012) by three hypothetical households compared to what they'd pay under a model user pricing scheme, assuming no change in travel behaviour (source: Infrastructure partnerships Australia)


The federal Minister for Urban Infrastructure, Paul Fletcher, gave a very important speech last month embracing the need for governments to investigate the costs and benefits of road pricing for cars. That's a few steps short of advocacy but it's a welcome development in my view; I've discussed the case for congestion pricing a number of times before e.g. see here, here and here.

Not everyone's convinced though. Phillip O'Neill from Western Sydney University reckons residents of western Sydney should be wary of claims congestion charging would make them better off (see So what's the cost to avoid congestion?):

Western Sydney households are heavily reliant on cars. Our spread-out suburbs are difficult to link by public transport and in some new areas the infrastructure for such things is non-existent. The lack of jobs density in western Sydney's major centres pushes all of us into our cars.

About three-quarters of resident workers in western Sydney use cars to get to work every day. Very few have public transport options. There will be no choice for western Sydney workers except to cop the road user charge, drive in peak periods, and put up with congested traffic conditions.

The revenue targets will be met. But we will be no better off.

Professor O'Neill is right to say that residents of western Sydney wouldn't have a realistic public transport alternative in the event user charges were introduced. The problem here is motorists don't regard public transport as a real alternative unless it offers a similar overall journey time to driving.


 The only situation where that holds is in concentrations of activity that are very well-served by public transport. In Australian cities that's usually the CBD because it's extraordinarily dense and blessed with a legacy of fast radial train lines inherited from the nineteenth century. There's no realistic chance a large dispersed area like western Sydney could be retro-fitted with public transport infrastructure that's so good it's more attractive for the great bulk of the population than driving.

Nor can it be assumed road charges would be so high they'd undermine the competitiveness of driving relative to public transport. The federal Minister is very precise in arguing that the revenue from road pricing should not exceed existing federal and state revenue from motorists; principally fuel excise, stamp duty, and registration charges.

Mr Fletcher contends the political reality is it won't be acceptable unless it's presented as an alternative collection mechanism rather than as a new tax. That also means it won't generate any extra revenue that could be applied to public transport infrastructure. It might also hobble the extent to which pricing can be used as a tool to manage traffic.

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This article was first published in Crikey.

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About the Author

Dr Alan Davies is a principal of Melbourne-based economic and planning consultancy, Pollard Davies Pty Ltd ( and is the editor of the The Urbanist blog.

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