The NSW government is opposed to limiting increases in tolls on Sydney's growing labyrinth of motorways to the rate of inflation, or extending the pricing regulator's powers to oversee the charges imposed on motorists.
Amid a looming backlash against the reintroduction of tolls on the M4 motorway, the government's transport agency has warned that limiting quarterly rises in tolls to the consumer price index "could have the effect of pushing up the initial price of future toll roads".
"A CPI cap would also make it more difficult to attract private investment; reduce competition in the market; and would be likely to increase costs for government, taxpayers and road users," Transport for NSW has told an inquiry into tolls.
Charges for cars on some of Sydney's largest motorways such as the M2 are, due to contracts signed with private tolling companies, growing at almost three times the present annual inflation rate of 1.5 per cent.
Tolls are due to be reintroduced on Sydney's M4 in June.Credit: Dominic Lorrimer
Blacktown City Council said toll increases higher than inflation should be banned, and emphasised that Sydney's ad hoc tolling resulted in "significant inequality".
The NSW legislative committee's inquiry into tolls will look into why charges such as that on the M2 and the Eastern Distributor can rise quicker than inflation, and the rationale for extending concession periods for toll-road operators.
The so-called escalation rate for the $16.8 billion WestConnex motorway will be 4 per cent a year or CPI, whichever is higher.
A peak body for Western Sydney councils said the inquiry was "sorely needed" because of the vastly different charges across the city's toll road network.
Motorists using the M2 paid three or four times more for a return journey to the CBD than those using the M5.
The Western Sydney Regional Organisation of Councils urged the government to consider distance-based tolls with a cap across multiple motorway links, or lower charges during quieter periods to incentivise "out-of-peak travel".
Residents in western Sydney are the biggest users of the city's toll roads.
The government is also opposed to extending the Independent Pricing and Regulatory Tribunal's role to determining maximum toll prices and the rate at which they can rise.
"Unlike electricity and water networks, toll roads are not monopoly services as there is always a free alternative," Transport for NSW said.
In a separate submission, IPART chair Peter Boxall has told the inquiry that the tribunal would be pleased to review road tolling in Sydney to determine how they are set and how they should change over time.
Transport for NSW said tolls were fair because they applied user pays, "meaning that those who benefit most from the toll road pay".
And the government agency said its research found "strong support" among motorists for improvements to the motorway network and the construction of more roads.
The research found 59 per cent of people surveyed favoured new toll roads to make getting around Sydney easier, while 84 per cent used a toll road to save time.
Transport for NSW said the research also indicated that toll price levels did not play a major role in people's decisions about whether to use a motorway.
"Once it has been determined that a road toll should apply, users are not sensitive to the particular level of the toll within a given price band, as long as the travel time savings are delivered," it said.
But amid record low wage growth, Labor has attempted to fine-tune its attack on the Berejiklian government for the hip-pocket pain from tolls on households in western Sydney.
Tolls are due to be reintroduced on a widened section of the M4 – part of the first stage of WestConnex – in June, although the Premier has signalled that the government may introduce a toll-free period.
But in committing last week to a tolled motorway tunnel linking Balgowlah in Sydney's north to the Warringah Freeway, Ms Berejiklian said people had come to expect to have to pay tolls for new motorways.
Australia's toll road king, Transurban, also said a funding gap for motorways would emerge if tolls rose at a lower annual rate than users' wages and willingness to pay.
The funding gap would need to me made up through government contributions, longer concession periods or higher initial tolls, it said.