Parking price policies: A review of the Melbourne congestion levy

In January 2006, the Victorian Government introduced a levy on public and private car parking spaces within the Melbourne CBD and adjacent inner city areas. In 2009, preliminary findings on the travel demand impacts of the levy were reported to the 32nd Australasian Transport Research Forum. This paper builds upon the earlier research by examining how the price of parking has changed in response to the introduction of the levy, and uses this information to consider the parking supply and travel demand impacts of the levy. Results of this research demonstrate that the introduction of the levy coincided with an increase in the price of long-stay parking. However, in public off-street parking facilities, short-stay parking charges also increased, despite the fact that the levy is only charged on long-stay parking; in private off-street parking facilities, some increases in long-stay parking charges occurred at the expense of annual rental increase. The way in which the levy has been passed on to different users has resulted in only minimal changes to the supply of short-stay and long-stay parking within the inner city. Similarly, while the last decade has seen significant modal shifts away from the car for trips to the inner city, only a very small proportion of this shift can be attributed to the introduction of the levy itself. These findings highlight the importance of passing on the full cost of the congestion levy to the motorist, if the levy's supply and travel demand impacts are to be maximised.