Means-tested toll relief on the table in Labor’s Sydney roads overhaul

High-income earners could miss out on toll relief under a Labor overhaul of Sydney road charges. See what else the review is considering.

Means-tested toll relief will be considered in a Labor overhaul of the Sydney road network to ease costs for struggling residents in the west, despite it potentially creating a two-tiered system.

Options being considered in the NSW government’s review of the city’s toll system include setting different toll pricing for different parts of the city, charging according to the distance being driven and the time of day tolling.

In a major about-face since the election, Labor is now considering a form of distance-based tolling — with caps in place — meaning drivers who live further away are not worse off than those who live closer to the CBD.

This comes despite Premier Chris Minns declaring on Wednesday that his government does not support distance-based tolling because it “would not be fair”.

“We don’t support congestion charging in Sydney or distance-based tolling — we’ve got to have a fair system in operation in Sydney — that wouldn’t be fair,” he said.

Roads Minister John Graham.

Allan Fels will head the tolls review.

Roads Minister John Graham said while the government had ruled out “simple” distance-based tolling it was still considering applying the concept, along with zonal charges and flagfall charges.

Flagfall charges are a fixed base-rate charge while zonal charges involve different rates for different areas of the city, under which drivers who take longer journeys are charged less than those who have a smaller commute.

The government’s review is being led by former ACCC watchdog chief Allan Fels, with all options on the table.

“The obvious question is whether you would have a unified system … maybe with a single access charge for a trip with some distance factors after that, maybe some time of day (charges),” he said.

A congestion charge on Sydney’s CBD and the introduction of new tolls on previously untolled roads — which were options considered under the former government’s review into toll roads — have been ruled out by the Labor government.

Toll relief for drivers will also be under the microscope, with means-tested relief considered as a serious option, meaning those in wealthier areas could pay more than those in lower income areas.

Means-tested toll relief is being considered as part of an overhaul of the Sydney road network.

A toll cap of $60 a week will be in place for two years from next January, with the review looking at the possibility of giving families who earn less extra support when the cap wraps up.

Treasurer Daniel Mookhey said relief needed to be targeted to the people who needed it most.

“Families are living in a city with a growing spaghetti network of toll roads that are costing them a fortune and we do want to make sure that the cover provided goes to those who need it most,” he said.

Sydney currently has 13 toll roads that charge motorists a patchwork of different fixed and variable rates.

Mr Graham said the review was designed to fix the current chaotic system, making it fairer and less confusing for drivers.

About $2 billion in tolls was collected during the 2021-22 financial year, with the average toll user paying $509 a year. The average business toll account was charged $3125 a year.

Mr Graham said he had already had met with Transurban, which indicated it was willing to negotiate on changes as long as the company’s bottom line was not affected.

Transurban owns many of Sydney’s tollways, although the government is also projected to own five toll roads by 2030.

While the government currently has no plans to compensate Transurban, Mr Graham did not rule it out.

“They are looking to protect the value of their contracts, but they are open to reform. That shouldn’t involve compensation if they’re able to get around the table and actually talk these issues through,” he said

Mr Graham said the government intended to have tolling reform implemented before the 2027 election.

Lib review proposed new tolls, congestion charge

New tolls on previously free roads and a congestion charge to enter the CBD were suggested to the Perrottet government as ways to fix the tolling system.

The Daily Telegraph understands that the Labor government has rejected both options, which were considered as part of a tolling review started under former premier Dominic Perrottet.

Excerpts of that review, released by the Labor government on Wednesday, reveal that bureaucrats suggested making motorists pay to use “previously untolled roads” in a bid to make the motorway network “more efficient”.

The ANZAC bridge and General Holmes Drive were among the untolled roads that could have been charged under the proposed “reform option”.

Other roads included the Gore Hill Freeway, M4 West, Southern Cross Drive, Warringah Freeway, and the Western Distributor.

Former NSW premier Dominic Perrottet. Picture: John Grainger

NSW Premier Chris Minns. Picture: Picture: NCA NewsWire / Monique Harmer

The review also proposed a highly contentious congestion charge to discourage motorists from driving into the CBD during peak times.

Charging drivers an “access fee” to enter the CBD at certain times was listed as one of the “pricing options” available to the previous government.

The review proposed new tolls on previously free roads in Sydney. Picture: NCA NewsWire

A congestion charge would provide a number of benefits, the previous government’s tolling report said, including reducing the number of cars in the CBD during the morning peak by up to 40 per cent, increasing average speeds, and shifting people to public transport.

Before the election, Mr Perrottet said he had “no plan” for a congestion charge, and said he could “rule it out completely”.

As well as ruling out a congestion charge, Premier Chris Minns is understood to have rejected any move to “distance-based tolling”.

Roads Minister John Graham will on Wednesday detail what work was done by the former government’s toll review.

He will also release new details of a review to be conducted by former Australian Consumer and Competition chair Allan Felt into how to improve the tolling network.

A pledge to cut Sydneysiders’ tolls bill was a central plank of Mr Minns’ pre-election platform, including a plan to cap weekly toll costs at $60.

Mr Perrottet was forced to rule out introducing a northbound toll on the Harbour Bridge, after Transport for NSW documents floated the idea.

Prof. Fels started work on his tolls review in April. At the time, Mr Minns said the review would focus on providing a “simpler and more equitable system”.

“The NSW Labor Government is committed to toll relief for motorists and helping ease the cost of living, especially for motorists in Western Sydney who use these roads to get to work every day,” Mr Minns said.