Sydney Motorists Do Not Want A Congestion Tax

If there were fewer poor people on the roads, rich people could get to work more easily and everyone would be better off.  This, in a nutshell, is the argument for the congestion tax, a charge on drivers of vehicles seeking to enter and exit the city during morning and evening peak times.

The idea has returned to public debate this week after the Grattan Institute released a report recommending its implementation in Australia's capital cities.

Pointing to international examples London, Singapore and Stockholm, the report argues for a flat fee to be imposed on vehicles crossing a cordon around the inner city in peak hour.

The fee would be roughly equivalent to the cost of a public transport ticket.

This enables the remaining vehicles to move through the city more efficiently.  People deterred by the fee would be expected to use alternatives like public transport, cycling and walking.

According to the Grattan Institute, we should care about congestion not only because it is uncomfortable to sit in traffic but because transportation inefficiency reduces the economic benefits of cities.  Delays impose opportunity costs, limit employment mobility, and make it harder to access goods and services.

If this all seems familiar, that is because the congestion tax is a zombie idea, one that has already consumed many brains.

Around the country, various government-backed bodies have floated this idea since it was implemented in London more than 15 years ago.

Yet time after time, governments continue to reject it.

This time, the New South Wales and Victorian governments, coming from either side of the political aisle, both rejected the idea immediately.

And for good reasons.

A congestion tax hits the least wealthy hardest.

The suburban working-class would be forced either to pay extra to get to work or to cram themselves into unreliable, already full trains.

Or take the bus, gazing out the window at the people who were able to afford the new tax.

Car commuters may be more likely to have above-average incomes, but this will be no consolation to those working-class people who are priced out of their preferred mode of travel.

Moreover, the connection between car commuting and higher incomes is probably just that owning a car is increasingly expensive anyway.

Motorists already pay registration, insurance, parking fees and the fuel excise.  In the eyes of the government, driving is becoming a vice, akin to drinking or smoking.

We should also doubt the supposed social benefits of this tax.

It is not possible to know whether economic growth will be higher if people are forced against their will onto public transport.  Nor is it possible to calculate the value of lost amenity as people move into higher-density housing closer to the city or public transport.

This gets to the fundamental problem with rationalist schemes such as this one.

Whenever a system is directed by central planning towards a specific end, in this case efficiency, other values within the system are displaced.

The choices of drivers and public transport users are burdened by the costs of realising the priorities of the planners.  This is what bureaucrats mean when they speak of changing people's behaviour:  they mean penalising choices that they don't like.

In fact, this is what government is for.  The real question is who determines what gets penalised by whom.

As always, what is at stake is a clash of values.

The congestion tax replaces the experience of a city as a home with the planners' vision of the city as an economic engine.

It is consistent with the agenda of centralisation and densification that has reshaped our cities over the past generation.

Governments across the country have regulated small and medium businesses out of existence, while encouraging the move to a service economy by rendering Australian workers uncompetitive.

Now, if you want a job, the city is the only place you can find one.

At the same time, the government has made suburban life more expensive and inaccessible.

The Commonwealth has gamed its aggregate economic figures with mass immigration, while the states have artificially tried to limit the development of new suburbs.

Just as the congestion tax suggests government would prefer you take a train than drive, the recent history of our country suggests that apartment life is being promoted ahead of the mainstream Australian dream of a family home in the suburbs.

This track record might suggest that the day of the congestion tax will come eventually.

But governments would do well to remember that recent elections here and overseas have been decided in the suburbs, which have roundly rejected the elite class that wants to impose its vision of progress upon them, preferring their traditional order to promises of dynamism and efficiency.