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
Support from the Victorian Government
The Victorian State Government will introduce a Road Occupation Charge for arterial roads across inner Melbourne. At the moment the introduction is deferred owing to COVID-19. The justification for the charge explicitly describes how private parties occupying a road contributes to congestion. At the moment the charge does not apply to vehicles occupying a lane by driving on the lane (and thus delaying other drivers), but in principle could be extended to apply, thus creating a driving charge.
The Road Occupation Charge was trialled in the City of Yarra in 2018, showing that road user charging is effective at changing behaviour:
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.
Revenue can help provide options
Revenue from demand responsive driving charges is a by-product, as the target is free-flowing traffic. However, revenue can be used to provide people with options to driving, such as safe travel infrastructure for walking, cycling and public transport, including protected intersections and protected public transport stops. As people voluntarily change to other modes, this reduces traffic congestion and works to reduce the demand responsive driving charge.
All Yarra road users, including drivers, will be better off overall if we introduce demand responsive driving charges and use the revenue to invest in infrastructure for walking, cycling, public transport and place making.