If media reports are correct, the structure of a potential ‘congestion tax’ for Western Australian seems lazy, poorly constructed and outdated.
The proposed tax seems to slug the registration of all motor vehicles with a flat-rate fee (based on vehicle type). All vehicle owners will have to pay the tax – regardless of their location (city or country).
The problem of this approach is that such a tax does not send a targeted price signal to motorists contributing to the congestion problem that is purportedly being addressed. The opportunity is therefore lost to incentivise these drivers to change their behavior. The demand for transport infrastructure is unlikely to be impacted upon.
Any hope of the tax addressing congestion comes down to its influence on transport infrastructure supply- as more funds are raised to build more infrastructure to accommodate more demand (assuming funds are not diverted to other purposes). This is likely an inefficient approach to dealing with the problem of congestion as additional infrastructure induces further demand.
Overall its disappointing that Western Australia has not moved beyond such inefficient, regressive mechanisms to deal with the challenges that we face. I don’t believe that much will be solved through such solutions. We will simply have a bigger, more congested road-based city in a state that is more expensive to live in.