Labor leaves way open for congestion tax

From the Age May 14, 2010 by JASON DOWLING AND CLAY LUCAS

STATE Treasurer John Lenders has left the door open for congestion charges on Victoria’s roads this decade following a recommendation in the Henry tax review to consider congestion pricing.

At a Property Council lunch yesterday, Mr Lenders noted the federal government had not responded to Dr Ken Henry’s recommendation of congest- ion charges ”across heavily congested parts of the road network”.

When asked if Victoria would have congestion charges, Mr Lenders said it was ”not on our immediate agenda” but would ”follow what a national approach is”.

He said while there would be no action on congestion charges by the federal government before 2013-14, if the Commonwealth came up with a more efficient way of raising tax, ”we are willing to look at it”.

The Brumby government has consistently ruled out introducing congestion charges, despite Sir Rod Eddington’s 2008 east-west transport review concluding that congestion charging was inevitable in Melbourne.

However, the state government has secretly been investigating congestion charges.

The Department of Transport in March refused to release to The Age under freedom of information 12 pieces of work, undertaken since 2007, on congestion charging.

The RACV has long called for a scrapping of transport taxes, such as petrol excise and registration fees, to be replaced by a wide-ranging road user charge – a form of congestion charging – based on the number of kilometres driven, when and where.

The RACV’s Brian Negus said the current taxation system was inequitable.

”It overtaxes many motorists and is totally arbitrary and doesn’t make the best use of our transport,” he said.

He said the federal government’s silence on road user charging was ”a missed opportunity to reform road taxation and get a better outcome for the community”.

He said that under a properly structured road user charge, motorists in country areas where congestion was rarely an issue would pay less for car use than their current charges.

Road pricing is already in use in many places around the world to manage congestion, including in Singapore, London, Sweden and Germany.

The Henry review recommended ”congestion charges should apply to all registered vehicles using congested roads”.

”Current road tax arrangements will not meet Australia’s future transport challenges. Poorly functioning road networks harm the amenity, sustainability, liveability and productivity of our society,” the report said.

It found that ”under business-as-usual assumptions, the avoidable costs of urban congestion may grow to around $20 billion in 2020. This cannot be reduced simply by building more city infrastructure, as most new road space induces new traffic.

”Helping to manage road use, through efficient prices, provides the best long-term approach to reducing congestion,” the report said.

It estimated the annual social cost of congestion would hit $6 billion in Melbourne by 2020.