Road pricing critical for Melbourne as population booms

Public transport experts are urging the City of Melbourne to adopt road pricing as a more equitable and efficient policy but say it’s crucial that revenue is invested in public transport.     

Replacing a fuel tax and vehicle registrations with a user-pays road pricing system could curb Melbourne’s congestion and unlock more efficient public transport networks and gridlocked roads, according to a City of Melbourne discussion paper, released on Wednesday.

The paper, Reducing Traffic for Better Streets, informed by research by the University of New South Wales and Monash University, is one of a series exploring options to inform the city’s 10-year public transport strategy, with a draft set for release later this year.

Despite being forecast to have a population matching that of London by 2050, Melbourne is a global outlier having not yet followed other mega cities in introducing road pricing, experts say. They point to London, which reduced congestion by 30 per cent since introducing road pricing 15 years ago.

Road user pricing has already been proposed by the Productivity Commission and the ACCC and a national “direct user charging system” trial involving trucks will shortly begin, according to Nicolas Gilley, chair of Melbourne’s transport portfolio.

“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,” he said.

The introduction of road pricing in Singapore saw a 20 per cent reduction in delays, Clr Gilley told Government News. 

“We’re far more likely to get an outcome if we use all the levers and road pricing is one of those really important levers that give a clear price message to people when they’re making their decisions,” he said.

Professor Graham Currie

Professor Graham Currie, director of the public transport research group at Monash University, told Government News that road pricing is “very important” to manage congestion, particularly given Melbourne has the lowest levels of car occupancy in the nation.

The adoption of road pricing is “inevitable,” Professor Currie said, pointing to the revenue gap that will be created as cars are electrified and the fuel excise tax is made redundant.

“As a result we won’t have any money to maintain our roads and will have to find money somewhere else and the answer is this. We have no real choice,” he said.

Revenue to invest in public transport

Professor Currie says road pricing needs to be part of a “bigger package” of solutions, including more public transport, which could be achieved if the revenue from the scheme was invested wisely in public transport.

He said the government is currently “not very good at hypothecation,” with revenue from the existing Melbourne CBD parking levy going to general funds and only a small share going to public transport.

Ian Woodcock

Dr Ian Woodcock, convener of the planning and city transport program at RMIT University told Government News that using revenue from road pricing to invest in public transport is crucial to the scheme.

“You would hope something in the legislation would mean the funds that were raised through a road pricing scheme were tied to other forms of transport improvements rather than going into general revenue,” Dr Woodcock said.

An equitable alternative

The experts argue that road pricing is more equitable than current state-led registration and federal fuel excise tax, and as a means of increasing revenue to fund public transport.

Clr Gilley agrees that the current system, in which everyone is charged despite differential car usage, is inequitable.

“We don’t want to see anyone disadvantaged by a road user pricing scheme, but the reality is the current system already disadvantages people who have to drive a long way into the city. They pay more of the hidden fuel tax, especially if they have older, less fuel efficient cars,” he said.

Dr Woodcock said it was important that the new initiative is touted as a more equitable system rather than as being “a new tax.”

Similarly, Professor Currie noted that while the introduction of road pricing is “politically hard” it was important to highlight the associated removal of registration fees.

He also said governments “need to join together” on the issue.

The community can submit feedback via City of Melbourne’s Transport Strategy Refresh Participate website until 31 July.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at  

Sign up to the Government News newsletter.

Leave a comment:

Your email address will not be published. All fields are required