Demand responsive driving charges are also called decongestion charges. They are a type of road user charge that increases at peak times. This encourages some people to drive during off-peak times, thus reducing congestion. Decongestion charges are one way of making our streets better for drivers. We don’t suffer from a lack of adequate roads, we suffer from a lack of adequate pricing. Every car on the road slows down other people, costing them time and money, and demand responsive driving charges keeps traffic flowing without needing to spend billions on new freeways.
The benefits of demand responsive driving charges are described in:
- Infrastructure Victoria, The Road Ahead – How an efficient, fair and sustainable pricing regime can help tackle congestion
- Henry Review of Taxation, Recommendation 61
- The Conversation: The case for congestion charging in Australia
- The Conversation: Road user charging for congestion management
- The Conversation: Delay in changing direction on how we tax drivers will cost us all
Or view this introduction:
Support from the Grattan Institute
The Grattan Institute recommends imposing congestion charges:
We recommend a three-stage reform: within the next five years, state governments should introduce cordon charging, where drivers pay to cross a boundary into the capital city CBDs in the morning peak and out in the afternoon peak; within the following five years, people should pay to drive along the busiest urban freeways and arterial roads at peak periods; and eventually people should be charged on a per-kilometre basis for driving across the city’s entire road network at the busiest times.Grattan Institute
It’s ethical to charge to drive on congested streets
It’s ethical for the Victorian State Government to charge to drive on congested streets; and use the revenue to invest in walking, cycling, public transport and car sharing; because it would deliver more mobility for more people. It represents a transfer of wealth and mobility from people on high incomes (who dominate the cohort of people who drive) to people on lower incomes (who dominate the cohort of people who use walking, cycling, public transport and car sharing). For more detail refer to our page on ethics.
Charges can be revenue neutral
If demand responsive driving charges where applied to all congested roads in Melbourne, the State Government could maintain revenue neutrality by decreasing other taxes; such as payroll taxes (a type of income tax), stamp duty (a tax on moving home) or car registration.