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How a New Congestion Charge in Sydney Could save Drivers Money

Posted by on March 24, 2016 at 8:37 AM

Those of you unfortunate enough to have gotten caught in the traffic on Wednesday 9th March, after a road incident on the Harbour Bridge caused extensive delays in many directions, may be happy to hear how a new form of congestion charge in Sydney could improve travel time and save you money.

How a New Congestion Charge in Sydney Could save Drivers Money

Regardless of what exactly caused the traffic congestion on that day, what it highlights is the ominous levels of traffic growth that the city of Sydney is facing. Building more roads under current pricing will only push taxes up so that’s not a viable solution either. Also, more roads will only attract more cars, putting us in a catch 22. So what can a congestion charge offer and how could a this save you money?

 

How a New Congestion Charge in Sydney Could save Drivers MoneyThe Institute of Transport and Logistics researched the idea of implementing a 5¢ per kilometre peak period charge in Sydney’s metropolitan and CBD area on the basis that car registration charges were halved. The result proved that almost every driver would be financially better off, as it would increase the value for money when travelling and even the state Treasury would save money. The only loss would be by the federal government who would lose out on small amounts of fuel excise as a result of the reduced distances travelled by cars.

The extrapolations predicted a 6% reduction in peak traffic that would be similar to the reduced congestions levels experienced during school holidays.

 

How a New Congestion Charge in Sydney Could save Drivers MoneyMany drivers would think that building new roads is the easiest and cheapest solution to improving traffic / travel times and you would be right, but only for the first 2-3 years. Roads would be quieter and able to accommodate more cars, however, those roads would attract more vehicles ultimately leading to the same congestion levels we currently face.

The government’s hand has therefore been forced to come up with more sustainable ways to price the use of Sydney’s roads. The benefit of having roads needs to be worth paying for and drivers need to realise better value for money along with increased safety and faster travel times all at the same time. All of which is difficult to ensure with simply building more roads.

Fixed charges on such a large scale don’t necessarily solve the problem either, that is why use-based payment could allow drivers to be more flexible and receive better value for money. Metropolitan areas suffer as much as the CBD sometimes, so it would be great to see a move away from fixed charges such as car registration and more towards use-based pricing models.

 

How a New Congestion Charge in Sydney Could save Drivers MoneyHere are the figures that the concept is based on which might prove this is not all complete money-deluded madness. Lets say the typical peak period kilometres travelled in Sydney per year are 4,000 out of the average 12,500 km travelled by each car. Then let’s half the car registration charges that would save $200 per year. By basing the 5¢ per kilometre charge on those 4,000 km, this would cost $200 per year which equals the money saved. This change gives drivers more control over how much they ultimately pay to travel. If Infrastructure Australia decided to reduce their costs further for car registration then the saving could be as much as $400 – $500.

Studies conducted by the Institute for Transport and Logistics showed that up to 35% of vehicles on roads during peak times are non-commuters. Out of that, 35% reserved estimates were made that at least 6% (potentially more) would change to travel outside of peak times to avoid the additional cost if price incentives were there.

 

How a New Congestion Charge in Sydney Could save Drivers MoneyThis would result in better value for money for commuters who need to travel at these times because they would be able to use the roads for their specific purposes with faster travel times. Meanwhile, those unwilling to pay would be able to avoid travel costs plus save money on registrations as stated above. The revenue generated from this program could then be more specifically targeted to repair and maintain roads and public transport infrastructure works whilst at the same time improving travel times for the entire area.

If you’re a Sydney-sider we would love to hear your thoughts on this topic and how you believe it could change your daily commute for better or for worse. We understand that no decision made will ever please everyone, so let us know in the comments section below.


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