Is it time to get serious about road pricing?

So what's the likely impact on motorists of the sort of user charging model the Minister has in mind? Infrastructure Partnerships Australia (IPA) recently developed a revenue-neutral design, Road pricing and transport infrastructure funding: reform pathways for Australia. IPA's proposed tariff is structured to take account of vehicle mass, distance, location, and time of day. IPA applied it to three hypothetical households:

Peter: Lives in regional Victoria and owns two vehicles. One is a 2009 Holden Cruze (Vehicle 1 does 46 km p.w.) and the other is a light commercial vehicle – 2005 Toyota HiAce (Vehicle 2 does 418 km p.w.). He operates a furniture restoration business, and uses the van for pick up and deliveries. He travels at least once a week on the national highway network to make deliveries. He uses the car three to four times per week for personal use, travelling only short distances.

Graham: Lives in outer suburban Sydney. His family owns 2 cars – 2009 Audi A4 (Vehicle 1 does 346 km p.w.) and Jeep Grand Cherokee (Vehicle 2 does 98 km p.w.). Graham drives to work every day in the Audi on motorways (one-way journey length 26 km). His wife uses the 2010 Jeep Grand Cherokee for short distances in the local area (e.g. school drop off and pick up, other personal business). Both vehicles are used frequently on weekends.

Leanne: Lives in the outer suburbs of south-east Qld. She owns one car – 2007 Toyota Corolla (Vehicle 1 does 260 km p.w.). She's a shift worker, travels to work (cross city, non-CBD) in the early evening and returning home before the AM peak period. She uses the vehicle for occasional weekend trips, generally travelling short distances in the local area

Peter's household currently pays $49.04 per week in taxes and charges; Graham's pays $46.25; and Leanne's pays $15.61. The exhibit shows that if they were to maintain their existing level and pattern of travel, Peter and Leanne would both pay around 20% less in government charges under the IPA's model tariff, while Graham's household would pay 10% more (an additional $4.62 p.w.).

Of course the aggregate revenue "lost" by those who pay less than at present would have to be offset by those who pay more. These are idealised household types; there will be other household types who'd be affected differently. For example, if Graham's wife has the same travel pattern as he does – and two income households are common in Western Sydney – the additional cost to the household would be $23.72 p.w.

All of them would potentially benefit, though, from a reduction in congestion providing faster and more predictable travel times. That after all is the key promise of congestion charging. It's very likely the value of travel time savings would significantly exceed the additional $4.62 p.w. (or $23.72) incurred by Graham's household.

Moreover, many motorists will be able to reduce the amount they pay by changing their travel behaviour. They might shift some travel out of the peak; change to a smaller car; or moderate the number of kilometres they drive e.g. by combining trip purposes. I've noted before that a high proportion of car trips in peak periods are made for non-work purposes e.g. according to research by transport analyst Craig Mcgeoch, 17% of morning peak hour motorised trips in Melbourne are for recreation and shopping purposes.

It's no surprise that even on the assumption of revenue neutrality there'd be winners and losers; that's true of any major policy change. But there'd be benefits in faster travel and there's scope for many motorists to adapt their travel. Those on low incomes could be compensated for higher costs. There'd be social benefits too e.g. avoiding or delaying building bigger roads to accommodate peak demand. It's time for governments at all levels to work together on advancing implementation of road pricing.