The Sydney Morning Herald has run reports now for two days in a row on the imposition of congestion taxes on the CBD and other parts of the city. Today there are two stories and an editorial. The first article yesterday, seemed to indicate that an RTA study had indicated popular support for the idea of imposing one on the city, but the main piece today seemed to suggest the opposite.
Most disappointing was Eric Roozendaal the NSW Roads minister ruling it out, not because its unnecessary but because:
“This market research survey from six years ago did not indicate Sydneysiders would support a congestion tax and I can categorically rule it out,” he said.
“The RTA and Government are constantly looking at ways to improve traffic flows through the building of better road infrastructure and better traffic management.”
The problem with this being that, in general, improving flows merely increases the numbers of cars using the road and in pretty short time we have the same problem again.
The Lord Mayor Clover Moore, quoted in the same piece, makes a slightly better case for not imposing a congestion tax,
I don’t support it at this time for Sydney because we don’t have that efficient effect of public transport system and disappointingly we don’t appear to have a commitment from the Government to do something about it,” she said.
but it remains a cop out. There should be alternatives if we are going to propose it, but these can be done in conjunction with imposing a congestion tax. Unfortunately imposing a tax never sits well with anyone and certainly it seems the media is unwilling to explain it in a way other than just imposing a charge to keep people away.
The logic of a congestion tax is that by reducing even a small amount of total vehicles on the road who are making unnecessary trips or encouraging car pooling, the roads are freed up for the rest of the cars, who get a faster trip. On top of this, there are other benefits like less pollution. Also, unlike the tolls imposed on other roads, it should be time varying. There is no reason to impose it in off peak times
However there are good arguments against it. One concern is that it is a regressive tax. The rich are barely effected and the poor can’t afford to pay and suffer as a result. As Tim Harford pointed out in his book The Undercover Economist this is not necessarily so. Certainly in London it was mostly the well off who would drive into the city, the poor already caught public transport, so it was in effect a progressive tax. He acknowledges though that in other places this may not always be the case, but it is possible to redress this in other ways.
One way would be to decrease registration costs, which would deliver more cash into people’s hands which they can then either choose to spend on paying the charge, or alternatively save by reducing their trips into the city. The other side is of course you use the money to increase the amount of public transport infrastructure.
For Sydney at least it is difficult to see how flows can be improved, given that the street layout will not change significantly. Jason at Catallaxy recently summarised a talk on the effect of government spending in reducing congestion costs, highlighting that reductions in congestion from road improvements are extremely cost ineffective and that congestion charging was one of the few tools left to tackle the issue.
I think that a plan involving congestion charging could be politically salable if introduced in the right way. Our current experience with tolling is that it is done for the purpose of raising money for infrastructure. As John Quiggin points out in this AFR article, pricing based on the historical accident of government not having enough cash to fund it doesn’t make sense, but pricing based on congestion does. If issues such as fairness can be addressed as well as providing better public transport facilities there is no reason it couldn’t be a popular way of reducing congestion.