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Wednesday, 3 December 2014

Flat Fee Is Not A Congestion Charge

There is no doubt that car use at times of peak demand and, hence, heavy congestion is underpriced. At peak times, every additional kilometre we drive adds more to the costs of other road users than it costs us directly in car running costs - but others pay for it. And then there are the environmental and social costs of air pollution, traffic noise and community severance.

So, appropriate congestion charging is a sensible component of travel demand management.

But a flat annual fee, as proposed by the WA Government, is not a congestion charge as it is not related to to the time, place or amount of car use.

People who drive little will pay the same as those who drive a lot.

People who live in the outer suburbs and rarely drive into congested areas will pay the same as those who frequently drive in the inner city at peak times.

People on low incomes will pay the same as people on high incomes, but the surcharge will be a much larger proportion of their incomes - it will be a classic regressive charge.

One hopes that country people will not be asked to pay this surcharge, but it needs to be borne in mind that cars are not necessarily used where they are registered - especially in the case of cars leased by non-metropolitan businesses.

A congestion charge, to be effective, must reflect the time and place of use. If it does not, it will justifiably be dismissed as no more than a piece of revenue-raising opportunism.

UPDATE 4th December 2014

According to the West Australian, the WA Treasurer, Mike Nahan, has ruled out a 'congestion tax' or any increase in 'household fees'.

Apparently, however, that assurance might only apply to the mid-year Budget review. Premier Colin Barnett has said that 'how to fund road and public transport' would be part of next year's budget.

Interestingly, at a seniors' function in the City of Vincent yesterday, Minister for Seniors, Tony Simpson, ruled out any reduction in seniors concessions on council rates, utility charges and public transport fares (including free public transport in the middle of the day, weekends and public holidays).

We'll wait and see what actually happens.

SECOND UPDATE 4th December 2014

Well - that didn't take long!
WA Premier Colin Barnett said a plan for a charge was being considered for next year's budget but the details would not be finalised until April or May next year.
It is not being considered for the mid-year review [later this month], it may be considered as part of next year's budget."
Mr Barnett said the cost would be "about a tank of petrol".
Barnett's (Government) car must have a very large tank.
"What we are looking at is the user pays more," Mr Barnett said.
But this isn't what a flat fee does - anyone with a car pays the same amount more, whether they use it or not.

Posted by Ian Ker, Convenor, STCWA

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