Subscribe to RSS$1 Congestion Tax For Auck Motorists?
A $1 charge on all vehicles entering the Auckland motorway system would raise $36 million a year, enough to service a loan of up to $5 billion.
That’s the figure floating around today in the wake of yesterday’s Auckland Unleashed summit, in which revenue schemes for infrastructure were touched on.
A congestion tax would be unpopular with motorists, already facing high petrol prices - especially if that money went to rail not roads.
But this is one way to fund the CBD rail link.
And this exercise needs to be about not just revenue, but a mindset change from Aucklanders using roads to considering there are other forms of public transport in most parts of Auckland.
It’s worth a punt - and needs brave bold leaders to make it happen.
It’s also worth resurrecting an Australian engineering group’s recent report looking at the lessons overseas of congestion taxes.
The original Singapore scheme for road pricing was first implemented in 1975 as a paper-based arealicensing scheme. The scheme was later upgraded to an electronic cordon charge and is complemented by significant charges to restrain vehicle ownership and expand the rail system. The congestion charge (taken alone) is interpreted as being effective at reducing traffic congestion, with estimates of the own-price elasticity to the charge of between -0.19 and -0.58, resulting in significant reductions in road usage. The scheme is regarded as:
- A technical success (it works)
- A financial success (it makes $50M per year and costs $10M a year to operate)
- A political success (it has reduced congestion and was carefully implemented to ensure people were comfortable with the system).
London has operated an area congestion-charging scheme since 2003. Within the scheme’s boundaries, (non-exempted) motorists must pay a fee to Transport for London before the end of the day or face penalty fines. Cars are identified using automatic number plate recognition through a series of fixed and ‘roving’ cameras. The scheme was intended to reduce journey times, improve reliability and to raise revenue for public transport.
The scheme is regarded as:
- A political success (congestion decreased and the Mayor who introduced it was re-elected next time)
- A financial success (revenues exceed operating costs) and a technical success (vehicle identification has high accuracy)
However, there is significant debate as to whether the scheme is an economic success.
The Netherlands is introducing a nation-wide satellite-based road charging regime, which prices based on road location and timing (accounting for congestion). The scheme is undergoing testing of the technology this year with introduction dates of 2012 (heavy vehicles) and 2013-16 (private cars). The scheme and public information campaign have been shaped by social research about perceptions, including how revenues are to be spent.
The current proposal involves replacing many of the fixed-cost taxes (registration and other surcharges) which are to be abolished, while funding is to be increased for public transport.
Manchester attempted to introduce a two-tiered cordon charge, with revenues directed towards improving public transport. In 2008, the scheme was overwhelmingly defeated at a public referendum after concerted campaigns from opposition politicians and motoring groups.
The scheme was to be staged in such a way that public transport was to be significantly upgraded before the charges were applied. Nevertheless, because revenues were not to be used to reduce other motoring charges and taxes, the charging was perceived as “just another tax.”
Stockholm introduced an area-based charging scheme similar to London’s in 2007 after a 7-month trial. Unlike London’s scheme, the Stockholm scheme was facilitated by geography, whereby the number of charging points is significantly reduced due to the nature of archipelago cities. Nevertheless, the scheme was expensive to implement and initially unpopular with voters, though the latter largely reversed with experience
New York sought similarly to introduce a three year pilot of a Manhattan central business district congestion charge. The scheme attracted broad based support in respect of a part of the city where more than 95 per cent commute by public transport and received city council approval in March 2008. However, as a taxing measure, approval by the New York State Legislature was required. There it encountered opposition, on a range of grounds including equity for low-income drivers and alleged impact on surrounding areas that might become ‘parking lots’. In April 2008, the legislature declined to vote on the proposal, with the consequence that eligibility for the federal grant funds that the city was pursuing for its scheme expired.
The episode took place at a time of sharply rising fuel prices – which by July 2008 had themselves reduced vehicle trips into lower Manhattan by 5 per cent.
The Aussie paper said negativity can be reduced by:
- Good public transport alternatives to congested roads (London)
- Using revenues to remove other road-based charges and taxes (Netherlands)
- Hypothecation of revenues to road and public transport improvements (Netherlands, London)
- Actual experience with a scheme through a trial and referendum (Stockholm)
- Public information campaigns explaining motivation and operation (Netherlands). Avoiding or, if not possible, addressing any split in political responsibility between different levels of government (New York)
- Judging the timing of introduction well, in particular avoiding fuel price spikes (London, Stockholm, Manchester and New York).
Our Government is not coming to the party for Auckland’s rail projects, especially the crucial CBD link - so let’s go out and find new means even if they bring the inevitable howls of protest form motorists who insist they won’t cope.
If we don’t get serious about a congestion tax, we can kiss the CBD link goodbye.
But let’s just make sure the money collected does not get channeled into more roading.
56 Comments
I suspect this will be dismissed on the grounds it will adversely impact low-income drivers. And I can understand this — many low income workers will perform shift work and may not be able to effectively use PT alternatives.
How do we solve that predicament?
(though that was just a bald assumption from me, I don’t have any stats to back that up)
Apply the fee to peak hours only, so shift workers wouldn’t be affected as much. It’s the 9 to 5 workers who are spoiled for choice with trains and buses.
I don’t think 36m can service 5b, maybe it should be 360m? Anyway it’s a pretty good idea, but would be more fair and efficient if it varied on at least distance travelled, and preferably time of day. In any case the council doesn’t have the authority to do this, and it would require a law change, so it’s in central governments hands. Given they nixed the regional fuel tax, I imagine they wouldn’t be supportive of this either
Geoff: great thinking. Congestion charging at “peak” times would be a good way to make it less of a regressive tax.
I heard this on the radio this morning whilst driving into work in the CBD, (with only me in the car BTW), and thought it was a good idea and one that the council should seriously investigate. I would suggest they take it one step further and charge on a distance basis or block of motorway you travel. I suspect with the ramp signals they installed the infrastructure is already in place for this anyway.
If it is done on a distance basis, they would need to have some sort of identification in place at the Bombays and at Te Hana to capture cars from out of Auckland so they receive a discounted rate, as they need to travel on the motorways for their journey, which started out of town, and other options are not an option.
Furthermore a surcharge could be placed on parking buildings/carparks in offices in the CBD of say $1 a day as well.
The last figures I recall is 200,000 cars a day travel the motorways. Assuming that you charge $1 per each way trip and $1 for a carpark you would raise $600,000 per day or $144m a year, also assuming 48 weeks a year and 5 days a week. This would service a loan of around $3bn and repay it over 30 years.
The Northern Gateway has around 20,000 vehicles a day use it, so I suspect the numbers above are a little light.
It is achievable, and an option that I think the council should seriously investigate.
Actually, peak hour Congeston charge is a really good idea to me!great revenue towards rail and it would definitley help as the government is more useless than a hippo’s turd and that was before the quake.
Thanks Geoff, you nailed it, just like that!
It really depends on the goal. If it is simply to drum up cash then the most fiscally efficient way is to just slap a a buck or two toll on each and every trip.
However if the goal is to raise revenue and also use the motorway system more efficiently, then it should be applied in graduations relevant to the level of congestion, say three dollars at the worst of peak hour, one dollar on the shoulders of the peaks, and nothing at night or in the middle of the day.
And as noted above the potential to change your travel to drive at uncongested times makes it less regressive, and those who do things like shift work and have no option but to drive go unchanged, which is fair because they are hardly part of the problem to begin with.
And yeah it must be $360 million to service 5 billion, $36 million isn’t even 1% per annum.
I much prefer the idea of of having a fee every onramp rather than just a blanket cordon around the CBD as that penalises one area while much of the issue tends to be through traffic i.e. people going from the Shore or West to Mt Wellington etc.
Having it at peak times only would help to fight claims from those opposed to it that it is revenue gathering as it will be easy to say we are doing this because the motorway is at capacity etc.
I also have suggested in the past the idea of charging based on distance which shouldn’t be to hard. A car gets scanned when entering the motorway using the same tech used for toll collection then gets scanned when leaving the motorway. A computer program then just works out the distance between the two and charges accordingly. It could be something simple like 20c per interchange you pass.
@Nick R, $360 million sounds about right, interest rates have come down a bit since this calculation in 2007
” a 10 cents a litre regional fuel tax on petrol and diesel could raise about $120 million a year and could support a debt of about $1.5 billion over 30 years.”
Would probably be more cost effective charging a smaller number of motorists more, like $2 or $3.
I think this should only apply to the CBD or CMJ at first. PT is good here but still useless for most non-CBD workers.
Should also only apply when CBD tunnel is built, as rail network will not have enough capacity until this happens.
Matt L - the problem here is you are suggesting we charge people whom many have no other option than to drive, cause PT doesn’t reach their destination. So I would say charging to the CBD first is the way to go as these have sufficient transport links.
Then add satellite cities as Public Transport improves to those areas.
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I wonder also how much it would cost to administer such a scheme in NZ? I know they have been done overseas in a cost-effective manner but a few of the tolled roads i’ve read about in NZ have such high admin costs they barely break even.
Joshua - Traffic to the CBD isn’t the issue, it is the people passing through it that are, imposing a charge just for entering the CBD only would likely just make the CBD less attractive for businesses and people who might visit for other reasons which will only hurt the region and PT aspirations as a whole.
I should also add that the argument could easily be “We know PT isn’t as good as it should be to all areas of the city but this charge will give us the funding needed to improve it.
Sorry for all the posts
Lucy - The costs for Alpurt are around 70c per transaction however the NZTA have said in the past that the core of the system has been designed to be able to be used for other projects as well. Each new toll project added would reduce the collection costs as opperational costs, which make up a large part of it, would be spread over a more transactions.
I’d go for a quadruple whammy all at once.
I would argue that an Auckland scheme should be brought in at the same time as a Wellington scheme. $1 is too cheap, especially in peak times. I’d say a scheme based on distance, with a peak time charge on top.
(After reading the thread on Human Transit, I’d call it a Decongestion Charge, as that is its aim.)
At the same time as the congestion charge I’d make it that every parking space in each CBD has a $5 a day extra charge on it for city workers, and that their wages include an extra $5 a day to pay for parking, which they are then free to use on public or active transport alternatives or car pooling or whatever.
And at the same time I’d bring back the regional fuel levy.
And I’d have detailed the plans of what projects the revenue will be spent on for the next 15 years, with an emphasis on cycleways, trams, ferries and trains and then a distant last, motorways. Instead of triplicating motorways and nonsense like that the default policy position should be to raise the decongestion charges.
Motorways alone mightn’t be the whole answer. A charge would certainly tip a decent number of marginal trips that currently use the motorway (probably where they belong) onto a more circuitous surface street alternative creating problems elsewhere. In essence the idea could certainly work and it would need a decent amount of tuning to limit the negative effects as described in the OP. I do like the Stockholm idea of a trial then a referendum though the benefits would first have to be clearly described by the mayor’s office or someone similar since he was elected on a transit platform.
Wow $1
It needs to be at least $5 to make it worth while and it would cost a small fortune to set up and administer
If it’s done, it needs to be abundantly clear from the very start that the money is going to be spent on public transport.
Ring-fenced accounting, annual independent audits of income and expenditure, the whole works. There must be no possibility of a stealthy redirection of money into general transport projects, or, worse, general expenditure.
Damian, $1 is achievable as a “public transport” tax level. $5 is a congestion charge, and you’d never get public support for it.
The tolling system for Alpurt is extendable, as has been said, so that cost is taken care of. The costs of setting up the vehicle identification would be initially high, yes, but then they’re paid for. Ongoing administration of Alpurt is 70c/transaction, apparently, and with the volumes that a motorway toll would entail that would drop significantly.
Matt,
It has been labelled as a congestion charge not a public transport levy. What ever you call it, it is a charge.
The cost of setting up the system on an auckland motorway would be far greater than Alpurt and the ROI would take a lot longer.
As for ring fencing it for PT, nice idea and I agree with it, but I dont think this will happen. The money will be used to fund other roading projects.
Also another suggestion was made to levy parking in the city, if this was the case then perhaps a lot of these companies would move away from the city, and what good would that do when you are trying to spin a positive case for the CBD rail link based on growth in the CBD.
Damian, Matt makes a good point.
$1 would be useful for getting funding for public transport (i.e. a public transport levy) but it wouldn’t really stop people from driving and wouldn’t have much effect on congestion.
To get people to stop driving at congested times you have to make it hurt, so it would need to be something like $5 to have an actual effect on congestion (i.e. a congestion charge).
I don’t think a charge of a couple of dollars would hurt the CBD at all. If it did help ease congestion it would help the CBD by making it a nicer place to work.
As long as it was 7am - 6pm their would be no problems. I would bring this CBD one in the time the CBD tunnel was built. After a few years it could be expanded to cover the CMJ as PT improved.
Maybe a couple of trips a month could be waived, which would help slash collection costs for occasional users?
Nick R
I agree with the sentiment, but people would argue if they are paying a levy or a tax for using roads, then that money should be used to fund roads.
Of course an arguement against this could be increasing funding for PT would actually help those paying the levy or tax by having less users on the road.
It simply needs to be called a congestion charge so people are aware of what it is for.
Damian, except that at $1 it’s not a congestion charge. It’s not intended to discourage driving in peak time, if it’s set at that level, which is the point of a congestion charge: “You’re driving in peak time, we want to discourage you.”
Matt
Ok I see your point - however I still maintain that people will want this money recovered spent on roading upgrades and not PT
Why not make it a congestion charge of $5 and use this money to fund PT?
Damian, of course they will. But if it’s not really hurting them financially it’s much easier to say “This money is going towards improving your alternatives.”
A congestion charge is a harder sell, especially when our public transport is so useless for so many. Start low, improve it, then bring in a congestion charge once people really have alternatives. Say from the start that a congestion charge will follow once x% of the population live within x minutes of an RTN station, and then use the money to ensure that happens.
Another method is to give every vehicle a certain number of “road use credits”, and driving on a certain motorway at a certain time for a certain distance will cost some number of credits. Charge people who spend more than they have, using the already-mentioned plate-reading systems.
This makes it much easier for shift workers, tradesmen etc who can simply apply for an exemption, while still hitting everyone else.
In a nutshell, you may recieve 40 Road Use Credits per month, and going past the Harbour Bridge during peak times may cost 1 credit each way. So there are only 20 days’ worth of crossings for a North Shore-to-City driver who needs to go back and forth. The other then then can be charged for. Likewise, non-peak crossings could be free.
The problem I forsee is people may shout “I don’t use a car” (or similar) and may want to recieve cash in lieu of credits. I don’t have a sensible answer for that.
Acutally, in lieu of credits you could recieve a discount on public transport fares. Kills two birds with one stone.
@Damian
“Why not make it a congestion charge of $5 and use this money to fund PT?”
Sounds ideal to me. Perhaps we call it a “congestion-causers-tax” (i.e. a tax on people who create worse congestion by driving at the most congested times)… to be spent on congestion-reduction (i.e. rapid transit alternatives to driving).
People who don’t want to pay have the option of driving at less congested times or on less congested routes that aren’t charged. Or if they don’t want to travel some other time or place they have the option of taking the congestion-free rapid transit alternative. If they absolutely have to drive on congested routes at congested times then they can pay the level for the congestion they create.
Nick, in the absence of viable alternatives for a decent majority of the population, such a scheme will be demolished minutes after the newly-elected Mayor takes their seat, having been elected with an overwhelming majority on the strength of a pledge to remove a charge that is certain to be widely unpopular.
A congestion charge works in London because everyone accepts that there’s an alternative for nearly everyone. Auckland can make no similar claim.
And saying that the money will be spent on developing alternatives won’t cut the mustard. The alternatives must exist first, with any congestion charge then used to repay the debt involved in building the alternatives. Doing it the other way is certain doom for the entire concept.
Yes Matt perhaps I wasn’t explicit but I am suggesting it would be phased in together with serious rapid transit improvements. I.e. borrow the money to build rail and busway and when they are open start the charge to pay back the loans.
Regarding parking levies. Why not apply them regionally. I would love to hit those malls, supermarkets and mega centres up.
re parking levies: simpler solution is to ban early-bird or all day parking specials. Local legislation that they must charge an hourly (or annual for businesses) rate only. Council can lead by stopping early-bird parking specials now in the council owned car park buildings. This will free up spaces for short-term parks for those coming in for 1 hour meetings.
re alternative travel options first: promote multi-mode trips. Park and ride facilities on well serviced bus and train routes. Small foot print 2 or 3 story light weight parking buildings along PT routes.
Decongestion charge: $5 to be meaningful, charged on CBD or city fringe off ramps.
Financial offsets: no fixed annual car charges. Rego, ACC, 3rd party insurance, etc all to be priced into fuel taxes.
Funding public transport: decongestion charge and fuel taxes to go towards buses, trains, ferries, bike ways, etc.
@James B a good idea, Queensgate mall has free parking for 4 hours, i my opinion, once the train and bus services are improved in reliabilty i reckon Westfield should pay them about $7 an hour, people will moan, but there are major bus stops literally surround the entrances which have buses that run up and down the valley, and the is the luxury Airport Flyer that goes to the Airport every 15minutes.
Russell, a lot of those ideas would have to be national in scope, and that would be problematic. Especially the ACC levy, since the offset would have to be a fairly large increase in the ACC component of fuel prices.
The car parking tax is a great idea, but it has to be applied across the whole region and not just in the city. Not only will it remove the issues we have with creating induced demand, but we will discourage wasting huge amounts of space creating these paved and unproductive areas.
The brilliant thing about the car park tax is that it should be an easy sell, thanks to the generally unpopular Westfield St Lukes shopping centre.
Feijoa, I think you might find the opposition to a carparking tax to be very stiff indeed. People consider it a right to have convenient carparking wherever they go, and it’d better be low-cost, or free.
The problem is that Auckland is so spread out, it can be even more inefficient (and uncomfortable) to take PT. The charge should be $2 at peak times only, and nothing for the rest of the day. This charge should only be for cars travelling on the motorway north of manukau and south of the harbour bridge.
“The problem is that Auckland is so spread out, it can be even more inefficient (and uncomfortable) to take PT”
That is a complete myth that was created by the group that were pushing motorways as the only solution. Auckland can be served by PT fairly easily if there was the political will to make it happen but far to often it has been an afterthought and the first thing to face the chop when budgets get tight
Matt L - You don’t see the main problem I think, the problem is the personal commuters who park in the CBD to get to their jobs, these are the people we need to charge as they have other options like taking the train for example, these commuters are the ones clogging our motorways during peak times. Certain vehicles can be exempt from payment like London, this make couriers and freight able to pass through the CBD uncharged for example. So we can still keep the vehicles needed for the economy.
Although there are a certain amount of commuters heading through the CBD, this is a very small amount, these driver already take alternative routes due to the traffic.
Shouldn’t exempt couriers and freight. These guys should be paying, as they will be the biggest beneficiaries of a congestion charge. They would gladly pay an extra few dollars if it did reduce their journey time.
However if a charge was applied on the motorway network, could exempt anyone who entered at the south end, and left at the north end in a reasonable timeframe.
Luke, that’s a pretty weak argument. The operators don’t benefit, their customers do, and they really don’t have a choice but to be on the road.
The whole point of congestion charges is to “punish” people who make a choice to use private transport in the presence of alternatives. Revenue-earning vehicles don’t have a choice, which is why they’re largely exempt.
Next you’ll be calling for emergency vehicles to be charged, because their benefit is even greater when the roads are free-flowing!
The operators do benefit. I thnik they are very happy to pay a toll on the Orewa bypass becasue I read it saves them something like $15. If they only had to pay $3 and they saved 5mins on a journey they would be better off.
Very difficult to differentiate between couriers business people and private vehicles. Ie do you charge company cars, when many of these are just job perks.
Speaking of weak arguments, your last point is very weak so I’ll ignore it.
Joshua - There are other areas that are well served by PT yet see the vast majority of their their employees drive, e.g. all the business parks near the Ellerslie train station. Why should only people in the CBD be charged when there are others that could easily use PT but don’t because there is lots of free parking on all of the nearby side streets.
As I said traffic to the CBD isn’t that bad, last year I had to drive someone in for a few months and as you would expect the motorway (SH16) was always busy however when it came to get off at the city the congestion disappeared. the congested parts were those going south i.e. passing through the CBD.
Also the only time you really see CBD streets busy is in the afternoon peak, all other times they are generally pretty quiet.
with Ellerlslie it depends which direction you’re coming from. If you live along a rail corridor you have good PT.
However it you live anywhere else in the isthmus PT is terrible. Ie try look up the journey planner to get from Dominion, Sandringham, Mt Eden Roads.
Ellerslie would come under the 3rd stage of Congestion Charging.
Stage 1 CBD, Stage 2 CMJ, Stage 3 motorway bounded by something like Mt Wellington, Rosebank and Wairau Park roughly. Stage 3 would be about 5 years after CBD link opens.
Luke, the toll at Alpurt is not a congestion charge, though. It’s not a penalty for being on the road, it’s a payment for using a quicker route.
It’s not at all hard to differentiate: if your vehicle is “for hire”, then it’s not a perk. That means taxis and delivery vehicles are exempt, company cars are not. Really, really simple.
And using benefit rather than penalty as the justification for a congestion charge would very definitely mean that emergency vehicles should be charged. Or perhaps their “customers”, who benefit from a speedier response?
Congestion charges are not tolls. You toll roads that provide a faster route. You congestion charge roads where people have non-road alternatives to get to the same destination and thus need to be disincented from using private road transport.
Peak time congestion charge just like they do in London.
i’ve driven through it, around it, ect, you soon learn to either get to work early, or catch the train.
Peak time only and the only needs to be a small area around the city, not as far as out as something like new market.
when the made the london cc, they then moved the area about 4-5 years later. I think its $10 pounds now, i remember when it jumped from $5-$8 pounds in 06.
cc charge at $2 for cars $3 for light trucks, $5 for big trucks, not including the downtown wharfing area.
hybrids /electric & motor cycles are free of charge.
thats how it works in london and it works.
once you drive in the zone, your a photographed and have 72 hours to pay it. most people have direct debit accounts.
its easy.
don’t set up more stupid toll roads like that should dicky thing just north of auckland.
having to get out of your car, then forced to stand in a que for a machine that always breaks down.
such a joke!
Carl, I would argue that congestion charging in Auckland needs to be much wider than a small area around the city, and definitely include Newmarket!
Congestion in Aucks is far more widespread than just the CBD.
true nick, but you have start with the cdb, then warn people its going to move further out.
you need to give people time to adapt to it.
its the only way it will work and its probably the reason why it worked in london.
the next issue is, making sure PT is well maintained so that people can not have a moan about it.
there should be no excuse for them, trains should be decent and bus transport should be even better.
Auckland is blessed in a way by it’s geography. Effectively the central part of the region is an island with on a handful of natural and man made bridges linking the quarters of the city. A congestion charge that takes advantage of these natural divisions and the choke points they create could be very effective.
I would be a little hesitant focussing on the CBD itself to begin with, sure it has the best PT but it is by no means the worst congested area and such a charge could be a threat to it’s viability if everywhere else is charge-free.
A better idea might be to start the charge on the central motorway junction and it’s approaches. This would affect the CBD but also a lot of the through traffic too.
Nick that would also have the advantage of pushing through traffic onto the WRR which is exactly what it is designed for
Yeah exactly, charge the most congested routes to redistribute traffic to the new and otherwise less congested routes.
Thats why I was always a bit hesitant about the idea of tolls at Waterview, tolling the bypass while leaving the congested main route un-tolled is ass-backwards.