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Opposition to congestion pricing

March 23, 2011

I was interested that economists at the forum seemed overwhelmingly to oppose the notion of congestion pricing as practiced in London and Singapore.

Congestion pricing was recommended by the Henry Tax Review which said, “Congestion charges should apply to all registered vehicles using congested roads.” The Review added, ”Current road tax arrangements will not meet Australia’s future transport challenges.”

The Henry Review went on to argue:

      • Congestion pricing recommendations are well based in long standing economic theory.

      • Introducing congestion pricing does not negate the need for expanded supply of roads in many cases, or other non-price measures. However, pricing is needed to leverage the value of urban road space, to ensure that investment in road capacity is put to its highest value use.

      • In the first instance congestion pricing would put most pressure on existing public transport services, and that its introduction would need to be co-ordinated with additional investment in public transport. The Review observed that congestion charges would help finance this extra investment.

    But one economist addressing the Parliament House conference said two-thirds of the growth in traffic is freight not private motor traffic. Another said that a congestion charge is effectively a tax on labor.

    There seemed a strong preference for variable tolling rather than a congestion tax.

  1. Robert Doherty permalink
    March 24, 2011 8:45 am

    A Congestion Tax just further marginalises the less fortunate in our society. The more fortunate will still drive their cars whenever they want.

  2. March 25, 2011 11:39 am

    If you start from the premise that CBDs are too valuable to give over to roads, traffic congestion and car parks, then a congestion charge makes sense.

    It works in London and (I assume) Singapore because public transport is a viable option to driving into the city. Bascially, you shouldn’t be clogging up the roads and polluting the streetscape unless its really, really necessary. And you pay the privelege for it.

    That’s obviously not the case in Sydney where it sounds like PT is atrocious.

    But could the revenue from a congestion charge speed up improvements in PT infrastructure? Would the people of Sydney accept the delay between being charged and finally getting good PT?

    • Bob Carr permalink
      March 25, 2011 12:50 pm

      Public transport in Sydney is not atrocious compared with cities that are like it in density and spread. About 27 percent of the population travel by pt, compared with around 15 percent in Melbourne. No other Australian city comes close. Travel on the bus freeway, Liverpool to Parramatta, and alight in the new bus-rail interchange ; or use the Sutherland-Illawarra line to get to the CBD ; or travel by air-conditioned bus on the multitude of Eastern suburbs routes, or use the ferries… And say this system is atrocious ?

      It is not atrocious. I doubt that the trickle of revenue from a congestion charge would remotely help in the huge capital cost of a new metro. And, by the way, you only have metros – if that’s what you have in mind -in cities with higher density suburbs than Australia’s.

      What Sydney can have is more bus transit ways, the pt option that delivers the biggest bang for the not inconsiderable buck required. Why is it the most economic option? Because while running buses every few minutes at peak hour you can then pull them out and use them on other routes and shunt them back for the next peak. Best and most flexible use of your capital.

  3. Riccardo permalink
    March 25, 2011 7:57 pm

    Yet Bob, we see the ridiculous queues of buses sitting on George and York Sts on essentially positioning runs, and the silly sight of buses terminating at the Quay for no good reason.

    You seem to have been running the bus network as if it was the old tramway network, the same destinations and routes, the same operating practices superceded 50 years ago this year.

    The ALP ridiculing a busway to the Northern Beaches.

    The on-again-off-again commitment to light rail. One minute light rail is the devil incarnate within Labor governments, next minute embraced with zeal. Doublethink in the 1984 mould. I’ve never understood why a Maroubra man would not value light rail – Anzac Pde and UNSW is ideal territory for it.

    I have no problem with busways, but suspect your Treasury does. And it’s no good saying Treasury have no influence, it’s all Cabinet government – you wouldn’t have such a large Treasury if they weren’t heeded.

    • Bob Carr permalink
      March 25, 2011 9:06 pm

      And the Opposition is committed to a bus transit way to the Northern Beaches with no funding for fly-overs, under-passes or a second Spit Bridge crossing ? Interesting. And to the same rail plan I enunciated in June 2005 ( see my blog on the subject ).

      Are you expecting them to honor their commitment to light rail from Central to the two universities ? Really ?

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