Melbourne City recently proposed some extreme reform plans to replace car registration fees with new congestion charges, the Times reported. Under the new plan, drivers may be taxed for every kilometer they travel.
The new policy is aimed at improving traffic congestion in the city, where drivers are no longer required to pay car registration fees. But they pay for every mile they travel, and there is an extra charge for driving in busy areas during peak hours.
The productivity commission, the Australian infrastructure agency, Rod Sims,RACV, the head of the Australian Competition and Consumer Council, and Grattan Institute, a think-tank, have all previously proposed a toll policy for road users, and the city government has therefore proposed a reform plan.
This is the first time the city has expressed support for a congestion tax, a policy that has been politically risky for successive states of the government. But Singapore, London and Oregon have all successfully implemented the program.
The city is due to release a five-year transport plan later in the day, which will try to address the city's growing traffic jams. Melbourne now makes an average of 12 million trips a day, up from 10 million by 2050.
Mayor Sally Capp said she wondered whether road pricing measures would ease congestion in Melbourne, given the impact of the toll policy on road users in other cities, including London.
Under a more favourable pricing plan, the charging policy will initially be a self-selected system and will be applied only in the city, and will then be rolled out to Melbourne as a whole.
The car will carry a e-tag-like device that will record fees based on the time, location and form of mileage of the day.
Rush-hour charges in busy areas and areas where car traffic is causing streetcars and buses to delay will soar. Outside the rush hour, the tolls on quiet roads are discounted.
The city has even suggested that the plan could even replace fuel taxes for those who choose the system, though it is unclear how it will work.
The charging system will be based on Oregon's user payment system. In Oregon, drivers pay 1.7 cents (2.3 cents) for every mile they travel.
Melbourne City will not be able to overhaul the fuel tax or car registration fee scheme, nor can it charge drivers entering and leaving the city.
Nicolas Frances Gilley, the leader of traffic-related groups, said it was time for the government to consider charging congestion taxes at CBD.
"I don't say this is the solution to congestion, but I think it's also an option we should consider because it can actually reduce traffic in the city," he said.
The congestion tax will keep the total revenue of the transportation system basically stable, without additional expenses for travelers.
Frances Gilley also said the fee plan should give discounts to people who have to travel long distances because of health or lack of public transport.
Ian Harper, a board member of the Australian Reserve Bank, said it would be unfair for drivers to pay the same car registration fee no matter how long they travel.
In its 2015 Harper competition review, Harper called for toll reform of the road toll system, including road pricing.
But Luke Donnellan, the road director, said Andrews government had "no plans to charge congestion taxes or replace vehicle registration fees with road user fees."
Politicians in government, Victoria, may not have dared to impose a new tax, but the federal government is taking the approach strictly, and authorities are studying the impact of road user fees.
Federal government Urban Infrastructure Minister Paul Fletcher said road user fees would be a "10-year or 15-year journey" and that "unless government is confident that the benefits of the program will exceed the cost, it will not begin to be implemented."
Dave Jones, manager of the RACV auto rights group, said the current driver payment system had actually failed, calling for a reform of the road toll system, and congestion taxes were part of it.
"We can see the benefits of road user fees, which will depend on the type, location, distance and travel time of the car."