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The Secret Agent Report

A monthly online publication by Melbourne buyers advocates Secret Agent to help buyers, researchers and industry professionals navigate the local property market.


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The Secret Agent Report - Melbourne Congestion Charge

May 2015

Melbourne Congestion Charge

Melbourne Congestion Charge [Download PDF]

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Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
-Ronald Reagan

Traffic congestion in Melbourne is a serious issue that needs to be addressed. It has significant economic impacts, in addition to social and environmental consequences, which are severe and detract from Melbourne’s liveability and appeal. The team at Secret Agent recognises the importance of reducing congestion to continually improve our city and to understand how property prices could be affected.

In this report we are presenting our own proposal in response to congestion: the Melbourne Congestion Charge. We propose this as a measure to fix the congestion issues faced by most motorists each day. The charge will ultimately have some implications for property prices across greater Melbourne and we wanted to gain an understanding of what these may be.

Excerpt:

Each year in Melbourne, motorists spend the equivalent of over three days in bumper-to-bumper traffic (Cook, 2015). Traffic congestion in Melbourne is a serious issue that needs to be addressed. It has significant economic impacts, in addition to social and environmental consequences, which are severe and detract from Melbourne’s liveability and appeal. The team at Secret Agent recognises the importance of reducing congestion to continually improve our city and to understand how property prices could be affected.

Previously, Secret Agent has reported on controversial infrastructure proposals, such as East-West Link, which had drawn mixed feelings from residents of Melbourne.

In this report we are presenting our own proposal in response to congestion: the Melbourne Congestion Charge. We propose this as a measure to fix the congestion issues faced by most motorists each day. The charge will ultimately have some implications for property prices across greater Melbourne and we wanted to gain an understanding of what these may be.

Congestion charging schemes have had great success in relieving traffic congestion in both London and Singapore. A congestion tax or congestion charge zone is a viable option for resolving this critical issue in Melbourne. Besides reducing Melbourne’s dependency on car use, it could also promote sustainable transport to ensure the continued prosperity of our city.

Congestion Charging Overview

A study by Shiftan & Golani (2005) showed that drivers responding to parking charges will generally change their mode of travel, or in some cases change the time of their trip, as opposed to cancelling their trip altogether. This is an encouraging finding as it shows that congestion charging can be effective in relieving heavy commuter traffic and improving air quality, while maintaining the economic prosperity of the region.

London and Singapore provide perfect examples of how congestion pricing schemes have been implemented effectively, as they have been very successful in reducing congestion and improving their respective transport systems. Singapore has followed a coordinated and well planned transport policy since the 1970s, involving road pricing schemes and transport infrastructure upgrades to support the development of the city (Santos, 2005).

London is a more recent example; The Mayor’s Transport Strategy for London was first published in 2001 and set goals of increasing capacity, efficiency, reliability and integration of its transport system. The congestion charge in London was first implemented in 2003, and by law all revenue must be allocated to projects that align with the Mayor’s Transport Strategy (Transport for London, 2007).

The key to the success of these congestion pricing schemes is that they are part of long-term strategies that acknowledge the complexity of transport and the requirement of integration.

In both London and Singapore, the congestion charges were introduced along with the provision of alternatives to using a car.

Investment into public transport infrastructure has ensured the success of reducing traffic congestion and has also assisted in achieving public acceptance of the schemes (Santos, 2005).

For a congestion charging scheme to be successful in Melbourne it would have to be introduced as part of a comprehensive and holistic transport policy. In particular, Melbourne would need an overhaul of its public transport system to ensure the effectiveness of the scheme, as evidently its current public transport system is inferior to that in London or Singapore. If implemented in a city with poor public transport a congestion charge will cause some reduction in congestion but its effectiveness will be greatly restricted. Drivers may change their route or the time of their trip but may also choose to cancel their trip entirely resulting in negative economic and social impacts (Santos, 2005).

References: 

Cook, H. (2015, April 1). Melbourne motorists spend more than three days a year in traffic. The Age. Retrieved from http://www.theage.com.au/victoria/melbourne-motorists-spend-more-than-three-days-a-year-in-traffic-20150401-1mcip5.html

Santos, G. (2005). Urban Congestion Charging: A Comparison between London and Singapore. Transport Reviews, 25(5), 511–534. http://doi.org/10.1080/01441640500064439

Shiftan, Y., & Golani, A. (2005). Effect of auto restraint on travel behavior. Transportation Research Record: Journal of the Transportation Research Board, 1932(1), 156–163.

Transport for London. (2007). Central London Congestion Charging – Impacts monitoring Fifth Annual Report, July 2007. TfL. Retrieved from http://www.tfl.gov.uk/cdn/static/cms/documents/fifth-annual-impacts-monitoring-report-2007-07-07.pdf


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