NSW congestion tax ruled out by state government

By CHRISTINE LAI

The NSW government has ruled out a congestion tax which would include tolls on major access roads through the CBD, following a review order into Sydney’s tolled motorways that recommended drivers be charged more to use the roads.

Under the review, key access roads to the city, such as General Holmes Drive and Southern Cross Drive, would have been subject to toll charges.

As part of its efforts to address growing budgetary pressures last year, the previous NSW government explored the possible implementation of a congestion tax for Sydney’s CBD and distance-based road user charges.

In May last year, a confidential document obtained by 9News titled ‘The Future Transport Strategy’ revealed the proposed implementation of a congestion tax by the Perrottet government. The report was designed to incentivise Sydney drivers to opt for bicycles rather than cars when travelling within the CBD.

According to that report, the current system does not accurately reflect the actual costs associated with driving. The report proposed implementing charges for road usage at specific locations or at certain times which could motivate drivers to explore alternative transportation options. This suggestion bears resemblance to the existing system in the UK, where drivers are required to pay a daily fee of $25 to drive within a 25 square kilometre zone in central London.

In pursuit of a simpler, more efficient and more equitable tolling system, the current NSW government commissioned the former chairman of the Australian Competition and Consumer Commission, Allan Fels, to lead an independent review of the tolling system in April 2023.

Roads Minister John Graham responded to the NSW Government’s decision, stating that neither option fit the pledge to end the era of “toll mania” under the previous Coalition government.

“Toll mania is a thing of the past which is why I need to be very clear and say the NSW Government will not support any recommendations to place tolls on previously untolled roads and there will be no charge to drive into the Sydney CBD, as we promised in the election”, he said.

Minister Graham declared the tolling system “broken”, raising criticisms over the “fixed charges, distance charges, mixed access and distance-based tolls”, amongst others, and stated that these facets of the current roads system needed to be “sorted out”.

NSW Treasurer Daniel Mookhey stated that the government remained committed to implementing the $60 weekly toll cap in January 2024, as it promised during the state election.

Mookhey asserted that the government would continue to work to find a “simpler and more equitable system” for NSW residents, describing the independent review as a “crucial” step to providing “meaningful reform of Sydney’s toll network and ensuring some much-needed financial relief for motorists”.

The NSW Government is also set to introduce a reduction in the truck toll multiplier for heavy vehicles on the M5 East and M8 corridors from the beginning of next year, for two years.