2.3 Steer changes in travel behaviour
In 2015, congestion cost Victorians over $4.6 billion and was set to more than double by 2030. This would cost Melburnians an extra $1700 each year, compared with an efficient transport network.1 While the COVID-19 pandemic temporarily paused congestion, Melbourne experienced a swift return to busy roads, with some even more congested than before.2
When many people want to travel at the same time, using the same transport infrastructure, conditions rapidly become congested, slowing speeds and generating crowding for everyone.3 For example, Victorian morning peak hour public transport commuters experienced crowding for 20% of their journey on average in 2018, and Victorian motorists travelled in congested conditions for 22% of their morning commute.4 Meanwhile, many roads and public transport services are underused outside of peak periods and on weekends, and some even during peak periods, such as suburban bus services.5 By encouraging people to travel at a slightly different time, or choosing different travel method, Victorians can get more value out of the transport system and reduce congestion.
Many factors affect people’s travel choices, including the options available, and their cost, speed, convenience, comfort and safety. This strategy makes many recommendations about improving transport infrastructure and services, including for walking, cycling, buses, trams, trains and roads. Transport pricing is another tool to influence people’s transport choices, but is not being used for maximum effect. Transport prices, such as public transport fares, vehicle registration costs or road tolls, affect the financial costs of different transport options, and influence the way people view the relative costs and benefits of travel at different times or using different modes.
People do not often consider the impact of their individual travel choices on others. When people choose to travel at busy times on crowded public transport or congested roads, they make the problem a little worse for everyone else. This costs everyone extra time and money. Good pricing of transport is the simplest way of helping people include their effects on others in their decision-making. For example, people can be rewarded for choices that help reduce congestion by charging lower prices at times or on modes with spare capacity. This maximises use of existing infrastructure, and minimises the amount of extra infrastructure needed.
Better transport pricing has been a focus of Infrastructure Victoria’s work program during the past four years, and our research has documented its considerable benefits using enhanced modelling, international case studies and direct consultation with the community. We have published two research papers, Good move: fixing transport congestion and Fair move: better public transport fares for Melbourne to detail our findings.6 The modelling done for these reports was conducted pre-the COVID-19 pandemic, but the outcomes will hold assuming Melbourne’s transport patterns return to pre-COVID-19 pandemic levels. We also investigated the short-term impacts of the COVID-19 pandemic in our report Transporting Melbourne’s recovery.
That report highlighted that better pricing transport networks could improve transport use during the pandemic. For example, lower off-peak fares will make travel on public transport safer by reducing crowding and enabling physical distancing. We are currently doing extra modelling to investigate how the COVID-19 pandemic might change the shape of Melbourne.
Many factors affect people’s travel choices and this strategy makes recommendations about improving existing transport infrastructure and services to change travel behaviour. This includes for walking, cycling, buses, trams, trains and for road users, including cars and motorcycles.
Our transport network faces major challenges
Without action, pressure on Victoria’s transport network will worsen as population grows. Trips will become longer, less comfortable and more unreliable, costing people and businesses time and money.
This pressure will be largest in Greater Melbourne, where an extra 3.6 to 6.5 million trips are projected to be made every day on roads and public transport by 2036.7 Road congestion could cost Victoria $10.2 billion by 2031 as drivers face longer journeys with increasingly unpredictable travel times.8
Congestion and overcrowding on public transport mean longer and more variable travel times, resulting in frustration and lost productivity.
Even with the Melbourne Metro Tunnel project, modelling indicates many rail lines could become overcrowded,9 and more than 30% of public transport trips could be undertaken in crowded conditions by 2046.10
Inferior public transport performance will lead to more people choosing to travel by car, which, in turn, creates even more congestion. Traditionally, Victoria supported a growing population by building more transport infrastructure. Victoria will still need targeted investment to efficiently move people and freight. But solely expanding roads and public transport may only temporarily relieve congestion, because providing more transport capacity also creates extra demand.11 While extra capacity initially improves travel times and reduces congestion, eventually they increase as more people use the new infrastructure. Every new major road in Melbourne has become regularly congested during peak times.12 Similarly, extra public transport infrastructure has temporarily increased capacity at peak times and reduced crowding, but congestion problems soon return. Building new infrastructure will not be enough to solve transport congestion problems without other changes.
Current prices do not reward beneficial travel choices
Victoria’s current transport prices provide few rewards for people to make travel choices that consider their effect on others. Most motorists pay a set of fixed charges (including registration, accident insurance, and stamp duty) regardless of how much they travel, and pay fuel excise levied by the Australian Government. Fixed charges mean drivers pay the same amount no matter how often they access the road network, and do not reflect all the costs of road infrastructure – including congestion, air and noise pollution, carbon emissions and road trauma. Road congestion is exacerbated by Melbourne’s large amount of free or cheap on-street parking.13 This encourages drivers to cruise for parking, contributing to congestion, and preventing other, potentially better uses of valuable land – for instance, for bus, tram and bicycle lanes, wider footpaths or even green space.14
Cheap parking also discourages people from walking or cycling to reach public transport.
Similarly, while public transport operating costs vary by mode, distance travelled, and time of day, Melbourne’s public transport fare structure does not reflect these costs. The common fare structure across most modes of public transport means that some modes are underused, like buses, while others, like trains, are overused. The simplistic fare structure also means people making short trips on cheaper modes are cross-subsidising other travellers. While some concession fares are available, vulnerable Victorians who are less able to travel in crowded conditions, or people who need reliable travel (for example, those with caring commitments), are less able to use public transport to access jobs, services and amenities.15
Transport network pricing is one of the most effective ways to ease congestion
Our research shows that comprehensive pricing reforms for roads, public transport and parking is the most effective way to reduce congestion and get the most from the transport system. Transport network pricing16 would replace fixed upfront charges and uniform fares with flexible prices set to encourage travel at times, to places and by modes that generate the greatest benefits relative to costs, taking the impact of an individual’s use on others into account. A person’s travel decisions can be affected by multiple considerations, including changes in preferences potentially arising from the COVID-19 pandemic. A comprehensive transport network pricing scheme can also consider other costs, such as air pollution and road trauma, and could incorporate fairness measures.
Encouragingly, Victorians are increasingly open to changing their behaviour, with one in four people saying they could change the time or mode of travel if conditions were right.17 More voices are calling for congestion charging and more use of transport network pricing, including Infrastructure Australia,18 Infrastructure Partnerships Australia,19 the NSW Productivity Commission,20 the Grattan Institute,21 the NSW Review of Federal Financial Relations,22 the City of Melbourne23 and the Committee for Melbourne.24
Transport network pricing is not a new concept. Other cities have effective road pricing regimes, including London, Stockholm, Milan and Singapore, where it has reduced congestion, improved average car speeds and decreased emissions.25
The Victorian Government has begun to change transport pricing systems. The Melbourne inner city parking levy has taken about 3900 vehicles out of the morning peak by reducing long-term, off street parking spaces. By comparison, accommodating 3900 vehicles with a new freeway would likely cost over $1 billion.26 The Victorian Government has started a trial of discounted off-peak public transport fares. They have announced congestion-charging tolls on the West Gate Tunnel project, and a distance-based charge for electric vehicles. These initiatives are positive steps toward transport pricing reform. Further complementary pricing changes can help change the travel choices of Victorians to prevent more congestion and deliver a better travel experience for everyone. It also helps generate the most value from new transport infrastructure investments by preserving their benefits, instead of induced demand eroding those benefits over time. For example, a combination of off-peak and lower fares, improved public transport services and road user charging can encourage more people to use public transport.
Priority reforms work together for greatest effect
Planning for change now can reap the benefits of changed behaviour and avoid unnecessary costs. It also gives people greater certainty, so they can make choices about the most efficient and cost effective ways to travel.
Implementing further transport network pricing is challenging and will take time. Through extensive research, modelling, consultation and community engagement, Infrastructure Victoria identified several prompt steps to deliver long-term, sustainable change. The following recommendations complement each other. They also complement our recommendations on improving services.
and transport infrastructure as the benefits from these investments will be even greater with pricing reforms.
Over time, these reforms can reduce crowding and congestion. They are all steps in moving to comprehensive transport network pricing across all travel modes, including parking, which encourages a more efficient and equitable transport system. Governance reforms will need to support implementation of transport network pricing. Early introduction of an independent adviser to monitor, review and advise on pricing in the system can make the transition and proposed reforms better.
Recommendations to steer changes in travel behaviour
Infrastructure Victoria makes the following recommendations to drive changes in travel behaviour. Table 2 summarises these recommendations and sets a suggested timeline for their implementation.
Table 2: Timing of proposed transport network pricing reforms.