The thorny issue of congestion charging - billing motorists to drive to and from city centres at rush hour - has been talked about for years. Now, cross-party support is growing for a charging scheme, and the Government has drafted legislation. Bernard Orsman explains how congestion charging works, where political parties stand on the issues, and what cities have in mind.
What is congestion charging?
Congestion charging means billing motorists to use roads at different times and locations to encourage them to change their time, method or route of travel. It is seen as a way to reduce congestion on roads, particularly at peak times, encourage people to switch to public transport, and reduce transport emissions.
Where has it been introduced?
Singapore was the first country to introduce congestion charging in 1975 and since then a handful of cities, including London, Milan and the Swedish cities of Stockholm and Gothenburg, have introduced schemes.
Where has NZ got to with congestion charging?
Successive governments have talked about congestion charging for 20 years, with most of the focus on Auckland, but nothing has happened. In 2020, the Government, the Auckland Council and several government agencies produced a report, The Congestion Question, which recommended congestion charges could be phased in from 2025, starting with central Auckland. It found the scheme would generate benefits, but cause financial hardship for many households, who would require help. It suggested prices of between $1.50 and $3.50 during the peak and shoulder hours and no charge off-peak.
The then Auckland Transport chairwoman, Adrienne-Young Cooper, said before congestion charges were introduced, “we need more high-quality public transport” and the Government needs to ensure the system “does not unfairly penalise low income earners”.
The transport and infrastructure select committee produced a report on congestion charging in August 2021, and cross-party support has been building for a scheme that has reached the stage of a bill being drafted by the Government.
Where do political parties stand on it?
The party supports congestion charges and has prepared a bill to enable it, but last week neither Prime Minister Chris Hipkins nor Transport Minister David Parker talked up the subject to help fund its $20 billion transport package over the next three years.
The Nats are keen on congestion charges as part of a wider plan for new funding tools to move away from road user charges and petrol taxes to pay for transport, and manage traffic demand.
Transport spokesman Simeon Brown said National would take the Government’s draft bill and make changes to ensure benefits for travel times, but acknowledged it will be “fraught and difficult” to address high costs for low-income earners.
Under National’s plan, councils will be able to propose a scheme but Brown said National has still to decide whether it will share the revenue with councils and what it will be used to fund, “but in principle used in a way that helps to improve the efficiency of the network in that region”. The intent, he said, is to spend the money where it is collected.
Brown said it would take two to three years before congestion charging could be introduced - passing the legislation, consulting with councils on schemes, developing the technology and building the infrastructure.
The Greens have long supported congestion charging after sufficiently investing in public transport and a safe, protected cycleway network for viable alternatives, says the party’s transport spokeswoman Julie Anne Genter.
Genter said Auckland and Wellington could bring in congestion charging relatively quickly, with the opening of the City Rail Link a good time for Auckland, adding it will realistically be about three years before it could be started. Nearly all of the revenue after operating costs would go to improving public transport, walking and cycling, she said.
“When congestion charging comes in, the road space is more free, which means it is easier to provide bus priority, protected bike lanes and for those that need to drive, they are spending less money by paying the congestion charge because they are getting a faster, more reliable journey.”
Genter said making a decision soon on congestion charging would also send a signal about where housing should be built, saying Wellington is looking at potentially 20,000 new homes as a result of light rail.
She said analysis showed concern that congestion charging would hit the poor is not generally the case, saying the majority of car trips into Auckland’s central city are from the wealthy and inner-city suburbs, and not many low-income people drive at peak times.
“If we are worried about low-income households, then we should be worried about raising incomes and fixing the tax system, like the Greens have proposed with a guaranteed minimum income,” Genter said.
A user-pays system for transport to replace fuel taxes is being proposed by Act.
The party envisages variable charges during traffic jams, dropping during free-flowing traffic.
Eventually, Act aims to copy Singapore nationwide with satellite-based pricing, and over time make all cars imported into the country fitted with a transmitter for tracking, and free transmitters for older vehicles after a five-year transition period.
Where do cities stand on congestion charges?
Most talk on congestion charging has focused on Auckland, where traffic gridlock is a daily headache for motorists and congestion is estimated to cost the economy more than $1b a year.
The Congestion Question report proposed an indicative scheme in three phases from 2025, starting with a cordon round the central city, moving out to the isthmus in 2028, and then the urban west, east and south Auckland after 2028.
Shortly after being elected last October, Mayor Wayne Brown said congestion charging only makes sense after Aucklanders know the bus or train will show up every time, and that is two years away.
Six months later, he is keen for the Government to pass legislation to allow the council to get on with implementing a scheme for the most congested sections of the motorway network at peak times, with the aim of using the revenue to replace the Regional Fuel Tax of 11.5 cents a litre.
He believes the revenue from congestion charges should come to the Auckland Council and does not envisage a scheme will be introduced until 2025 at the earliest, with more detailed work and public consultation to take place before then.
Stephen Selwood, one of four commissioners running the Tauranga City Council and a former chief executive of Infrastructure New Zealand, said a study is under way on introducing congestion charges on the city’s state highways, with the aim of reducing congestion by 20 per cent, increasing mode shift to public transport by 6 per cent and reducing carbon emissions by a similar amount.
Selwood said the study will feed into the council’s new 10-year budget and go out for public consultation, saying: “Here’s the option, we think it will have major benefits to the city, would you be prepared to support it?”
If there is public support, said Selwood, the council will go to the Government and say “let’s get on with this”.
Two questions need addressing, he said. Are there viable alternatives to the car and enough people to move to public transport, and how do you help people on lower incomes?
There are options for low-income people, he said, but the simplest is number plate recognition technology (already in place on two toll roads in Tauranga) that would link to a community services card for a price discount, or even free, for that commuter.
“No doubt there will be robust community debate, but you have got to compare it with the counterfactual that if we keep on doing what we are doing, we pretty much know the outcome, and it’s not that good,” Selwood said.
Wellington has no plans on the radar for congestion charging, but the council is supportive of it as well as tolls to encourage mode shift, reduce emissions and improve travel times.
Two years ago, the council’s infrastructure committee said road pricing should be about more than just “relieving congestion”, and used to meet national emission targets with a reduction in private car trips and significant shift to low carbon transport within years, rather than decades.
It also recommended in a submission to The Congestion Question report that equity could be achieved with targeted discounts or a daily cap on charges.
What does the AA say?
The Automobile Association is open to congestion charging as a concept and its benefits in terms of travel times but is mindful of the significant financial costs on motorists, especially where realistic alternatives are thin on the ground, said policy director Martin Glynn.
He believed it could be used for peak travel in and out of the Wellington and Auckland city centres, given they have “reasonable public transport alternatives” with public transport, walking and cycling, but is sceptical about rolling out congestion charging elsewhere where public transport is extremely limited.
“We are particularly mindful that despite the hype, congestion charging has only been introduced in a handful of cities around the world, and apart from Singapore, it has been focused on city centres only,” Glynn said.
Last year, the AA surveyed members in Auckland on how they felt about congestion charges and found 14 per cent like the idea, compared to 46 per cent who were opposed. The other 40 per cent did not know enough to comment or didn’t have a firm view.
Although a political consensus is building for congestion charging, the AA said it will be a “hard sell”.
Bernard Orsman is an Auckland-based reporter who has been covering local government and transport since 1998. He joined the Herald in 1990 and worked in the parliamentary press gallery for six years.