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Traffic Congestion Tax for Melbourne?

03 Oct 2016

Infrastructure Victoria released its draft infrastructure strategy for Victoria  which included a recommendation to introduce a traffic congestion tax. The question I have is what impact has the curren Congestion Levy had on reducing traffic coming into the city?

Yes, we already have a congestion tax / levy!!

The current congestion levy was introduced by the Victorian State Government back in 2006. It was a levy aimed at taxing long term parking in CBD car parks to reduce people driving into the city in peak times.

The congestion levy started at $400 a bay in the 1st year and it increased to $800 a bay in the 2nd year. In 2016 it has increased to $1,360 per bay for category 1. Yes, you guessed it, the Victorian State Government introduced a category 2 levy. The category 2 levy is $960 per bay and was introduced this year in suburbs like Albert Park, St Kilda and Northern Suburbs of Carlton, Fitzroy, Nth Melbourne and Kensington.

SRO Congestion Levy Map

The Victorian State Government 2016/17 budget includes revenue of $123.4 mllion to be collected through the Congestion Levy. $5m per annum goes to the City of Melbourne which is why we probably don’t hear too much complaining from them.

So, Infrastructure Victoria, are we deleting a congestion levy that has had no impact on reducing traffic congestion in Melbourne for a solution that actually works, or are you recommending to have a tax on a levy?

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