Opposition to congestion pricing
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.