Council’s Revenue and Rating Plan states that councils must comply with the government’s Competitive Neutrality Policy.

Councils must comply with competitive neutrality. Image credit: City of Yarra Revenue and Rating Plan.

Council’s Pricing Policy states that if Competitive Neutrality applies, council must align with market pricing:

Image credit: City of Yarra Pricing Policy

An example of a significant business activity that council provides is the provision of parking services. Council fails to comply with competitive neutrality because it prices parking lower than the market rate. Consider two off-street parking areas near Bridge Road. The southern one is private, and charges $4 per hour, while the northern one is operated by council, and charges $2.50 per hour. Council is charging only 62% of the market rate, which fails to comply with competitive neutrality.

Council car park (in yellow) and private car park (in green) near Bridge Road. Image credit: Apple Maps, highlight from Streets Alive Yarra.

Even worse is how council prices on-street parking. Approximately 3/4 of council’s 47,000 on-street parking bays are offered for free, which is clearly below the market price. Even though parking is time limited, e.g. four hour (4P), it is still free all-day parking, because people come out in pairs after four hours to swap the position of their cars.

This is still free all-day parking, because commuters come out in pairs after four hours to swap the position of their cars. Image credit: Streets Alive Yarra.

Council can solve this, and comply with competitive neutrality, by converting all on-street parking to paid parking, via permit zones, digital permits, and pay-by-app. This doesn’t require the installation of high cost infrastructure (such as parking meters), instead council can contract the services of a parking solutions technology provider to rapidly roll it out across the municipality.

This is paid parking, if council sells digital permits to visitors, e.g. commuters. Image credit: Streets Alive Yarra

To encourage visitors and support traders, the first hour in any permit zone could be free; with the second and subsequent hours using demand responsive levels pricing that target 85% occupancy. Clearly, the hourly rate would vary across Yarra, according to local demand. Away from shopping streets the pricing could offer a daily cap, matching the daily price cap at commercial off-street parking in that area. Residents could access lower pricing for their guests, via a verified account on the parking app.

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