Taxing traffic for a good cause

There has been significant discussion about congestion charging recently. The Grattan Institute has proposed charging vehicles a toll to enter or leave the CBD at certain hours.

A congestion charge provides benefits for people in vehicles. Less time would be wasted in slow traffic for those driving. It is a fairer system for paying to drive than the dwindling fuel excise.

Also almost everyone benefits when drivers who can, switch to safer and more resource efficient options: public transport and active transport. A small price signal is a big improvement on the current situation where there is no price signal at the time of driving into the CBD.

A proposed Sydney congestion charge cordon with detection points
A proposed Sydney congestion charge cordon with detection points. Terrill, M., Moran, G., and Ha, J. (2019). Right time, right place, right price. Grattan Institute

However, a key point in the Grattan proposal is the suggestion of how the toll revenue is spent: on pedestrian infrastructure. The report, entitled Right time, right place, right price, states:

Within the next five years the NSW and Victorian governments should introduce a cordon-style congestion charge in the CBDs of Sydney and Melbourne, that guarantees the net revenue will be used to improve pedestrian safety and amenity in the city.”

The report explains this reasoning.

“Congestion is a real issue on CBD footpaths, as well as roads. And where crowds spill onto the road, there are serious safety risks for pedestrians and the vehicles using the roads. The City of Melbourne reportedly has Victoria’s highest rate of pedestrian road trauma.

Drivers to the CBD would also benefit. Virtually all drivers who park
in the CBD become pedestrians for at least some of the day. Within Sydney’s CBD, more than a million trips are made each day and 92 per cent of these are on foot. By upgrading the streets and improving the CBD’s amenity, many people who have paid the cordon charge will benefit from the revenue, in addition to their time savings.

This idea should be adopted by the NSW government. Directing the revenue to make Sydney more walkable is essential for a city that is growing in population, has too many people injured by vehicles, and needs to become environmentally sustainable. Too little government money is currently invested in active transport and public spaces. When drivers see how their congestion charge benefits the city, public support will be stronger for this proposal.