Cost impacts to motorists of discounted registration fees in the presence of distance-based charges and implications for government revenue

Abstract

The call for a congestion charge is getting louder and more frequent in many countries as major metropolitan areas experience increasing levels of road congestion. Although reform of road pricing is almost certain to occur at some time in the future, a key challenge is in selling the idea to the community of road users as well as a whole raft of interest groups that influence the views of society and politicians. What is required is a carefully structured demonstration of what might be done to progressively introduce adjustments in road user charges that are seen as reducing the costs to motorists while ensuring no loss of revenue to government. In this paper we show this can be achieved by the reform of registration fees in the presence of a distance-based charging regime (either for the peak or all day), that can deliver financial gains to motorists with prospects of revenue growth to the State Treasury of Sydney (Australia). The reform package assessed is predicted to result in changes to total annual kilometres of travel (especially in the peak) and flow through gains in travel time that deliver reductions in traffic congestion. We see this as an essential first stage in gaining community support for road pricing reform – proof of cost reductions associated with improvements in traffic congestion can then be used to continue the reform process.