Melbourne city could opt for user-pays road pricing instead of rego

The City of Melbourne could replace its fuel tax and vehicle registration with a user-pays road pricing system to cut congestion, according to a new discussion paper.

The Reducing Traffic for Better Streets paper, using research from the University of New South Wales and Monash University, reveals a well-designed road user pricing system could deliver benefits to all transport users.

Chair of the Transport portfolio Councillor Nicolas Frances Gilley said that road user pricing has already been flagged as necessary by the Productivity Commission and the ACCC and a national direct user charging system trial involving trucks will shortly begin.

“As Melbourne’s population grows towards 8 million people in 2050 our road network will be subject to intense pressure, we can’t build our way out of congestion with new roads that will simply fill up with more cars. We need to come up with innovative solutions to ensure access to our road network is equitable,” Cr Frances Gilley said.

“There are a few different options for introducing road pricing, it can be a sum charged per kilometre or per trip, or a charge within a particular zone and these can be altered based on peak traffic periods.

“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.

London introduced zone charging and found its congestion stabilised for 10 years, despite the population of the city growing by 1.3 million people. The introduction of road pricing in Singapore similarly saw a 20 per cent reduction in delays with the cordoned zones. A cordon change in Stockholm, Sweden, led to 24 per cent fewer commute trips by car, with most swapping to public transport.

“A leading global example is Oregon, USA, where a pay-per-mile distance charge was introduced in a voluntary trial that saw participants driving 22 per cent less during peak. After the trial 91 per cent of the participants preferred the new system,” Cr Frances Gilley said.

“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.”

The paper argues that newer fuel efficient and electric cars have seen a decline in revenue from fuel tax collected by the Federal and Victorian Governments, meaning a new system will need to be introduced to make up the shortfall.

“We know we don’t control pricing policy, but as we manage 68 per cent of roads within the municipality we have a vested interest in advocating for a system that works best for our community,” Cr Frances Gilley said.

“We are seeking feedback on this idea and people’s experience of pricing systems in other parts of the world and how they worked.”

Feedback received on the report along with seven recently released transport discussion papers will inform a new draft Transport Strategy later this year.