Transport network pricing means users pay to access and use the transport system. It aligns the price more directly with those who use and benefit from the transport system.
All Victorians pay for road and public transport whether or not they use it through general government revenue measures such as Payroll Tax or Goods and Services Tax (GST). Victorians also pay for transport in a number of ways, including State and Commonwealth government charges (such as registration and fuel excise) and private costs (such as car insurance).
Why introduce changes?
The problem is that what people pay:
- Does not encourage the best use of the infrastructure
- Is not always linked to how much transport infrastructure they use
- Is not always linked to their ability to pay
- Is not transparent at the time of use
- Road pricing can significantly improve the efficiency and reliability of the transport system
- Other utilities have successfully introduced user pays pricing
- Public transport and freight already have a price signal or a direct user charge mechanism.
This means the current pricing system is inefficient, unfair and affects the accessibility of goods and services.
The congestion problem
Victoria’s transport system is struggling to cope with increasing demand.
Modelling shows most arterial roads and public transport services in Melbourne are at capacity, costing people time and opportunities.
If nothing is done, congestion will get even worse. In 2030, congestion is expected to cost Melburnians on average an extra $1700 per year or $7 per working day. It will also hold back productivity growth and detract from the amenity of city areas.
Just building more infrastructure without managing demand is financially and environmentally unsustainable and does not address the congestion problem.
Focusing on road pricing first
Infrastructure Victoria is focusing on road pricing as a first step towards developing a transport network pricing regime that includes public transport and roads because:
Road pricing is the first step towards a comprehensive network-wide pricing regime as it offers the greatest potential for improving Victoria’s entire transport network, particularly for relieving congestion on Melbourne’s roads.