Labour wants to accelerate the introduction of its congestion charge policy through gathering the support of all parliamentary parties. So how would it work?

New Zealand’s biggest cities – like Auckland, Christchurch and Wellington – must reduce their transport emissions. That much is known. One solution, posed by transport minister Michael Wood, is congestion charging. Wood is seeking support for the policy from all parliamentary parties. RNZ reported that although all parties are theoretically supportive, there is conflict over the best approach. The Act-National bloc opposes congestion charging and the regional fuel taxes (like Auckland’s 10c per litre tax) operating concurrently. Labour seems to agree. As Wood said, “Auckland’s fuel tax would likely be scrapped if a congestion charge was introduced.” Conversely, the Greens think replacing the fuel tax with congestion charging is not sensible. “You would not be able to plug the gap that’s needed, particularly in Auckland, simply with congestion pricing revenue,” said Greens transport spokesperson Julie Anne Genter. 

What is congestion charging?

A congestion charge is a commuter fee for driving in heavy-traffic (congestion) areas – like CBDs – at set times like morning and evening peaks, though sometimes it extends beyond peak periods. The aim is to incentivise commuters to use other modes of transport, such as public and active transport, resulting in reduced congestion and emissions. 

Does it work?

The Congestion Question (QC) report references successful examples in Asia and Europe, which have resulted in improved traffic, emissions, public transport mode-share and increased off-peak travel. Research from WSP NZ, an engineering consultancy, found that schemes in London, Singapore and Stockholm reduced traffic by 10-30% and increased traffic speeds by the same figure. Further WSP insights show the charges correlate to a 15-20% emissions reduction. 

What might congestion charging look like in NZ?

The City of S(n)ails CBD would be the likeliest recipient of congestion charging, according to the CQ report. Drivers would be charged up to $3.50 one way or $7 for a round trip to get in and out of Auckland’s inner city from potentially as soon as November 2025. If the CBD scheme successfully reduced traffic and emissions, it could expand outward into the supercity – likely along “strategic corridors” aka the busiest arterial roads. The CQ report suggested that gridlock would improve by up to 12%. According to WSP’s Phil Harrison, “for a city like Auckland, the economic benefits of easing congestion are significant.” Congestion charging is also on the table for Wellington. 

But how would it actually work?

You would be charged $3.50 upon entering (or exiting) Auckland’s inner city, “with the charges only applied once within a two-hour window regardless of distance travelled”, RNZ reported. Using the same technology as automatic toll roads, roadside cameras would record number plates to enforce payment. Implementing this policy would require upgrading the existing camera network and constructing new standalone infrastructure for new cameras. The CQ report suggested that an app and website could be used for tasks like manual payments, setting up automatic payments or adding number plates to your account.  

The case for congestion charging

As mentioned earlier, this policy would minimise traffic and emissions while increasing traffic speed. The NZ Institute of Economic Research found that if Auckland’s traffic were free-flowing, it would garner $1.4-$1.9 billion in benefits – equivalent to 1.5%-2% of the city’s GDP. 

A 2022 study from Sweden’s Lund University compared 12 traffic-easing measures including carpooling, replacing car parks with bike lanes/footpaths and targeted fares-free public transport. The report concluded that congestion charging was the most effective policy. 

Another opportunity, endorsed by WSP’s Harrison, is reinvesting the congestion charging income into improving alternative transport modes. The Lund study also argued that money raised from disincentivising driving should “expand and improve walking, biking and public transport”.

Further proponents include the sustainability advocates Greater Auckland. Some of their reasons are “improving safety, improving efficiency for both freight and public transport services, and long-term benefits to our health system as a result of more people using active modes”.

The case against congestion charging

”While the benefits can be substantial, public acceptance can be a huge barrier,” said Harrison. He called congestion charging “a political hand grenade” that is hard to introduce due to low public support – at least at first. Citing Edinburgh, Harrison noted that “a number of congestion charge schemes investigated around the world have failed to be implemented because of public opposition”. Reasons for this opposition include residents feeling “over-taxed” and having equity and fairness concerns. It’s an argument National has made here, with the party not keen to add “further cost to people using the roads at a time of cost of living crisis”.

Another argument against congestion charging is the fact that both cities’ public transport systems are wildly unreliable. As urban planning professor Timothy Welch puts it, Auckland is “facing a public transport crisis” – a description that could also be used for Wellington. Because of that, Auckland mayor Wayne Brown thinks congestion charging is an unwanted distraction from solving the public transport crisis. “Congestion charging could only make sense once every Aucklander has the option of catching a bus or a train that they know will show up on time, every time,” Brown said. Harrison noted that ensuring there are reliable non-driving options “may require substantial investment in other modes of transportation, before charges are imposed“. Some cities with successful congestion charging schemes, like London, already had reliable public transport systems before introducing the tax. 

So it’s good but only if public transport is good too?

Pretty much. Harrison thinks congestion charging is “a way of harnessing the power of the market to swiftly reduce the problems associated with traffic congestion, such as emissions and delays to the essential movement of goods, services, and people”. But it shouldn’t be an isolated policy, argues James Allan Jones, an economic policy expert, citing concurrent public transport investment as a must. The Lund University study agrees, saying, “a carrot and stick approach is key to success, such as improving buses and bike lanes while simultaneously discouraging car use”. Congestion charge revenue could be reinvested “in public transport or other alternatives to provide more people with practical alternatives to paying the charge” suggested the CQ report.

What about those equity arguments? 

Research from WSP’s Tom Jones suggests an Auckland CBD initiative would “likely not have largely negative equity impacts” because “travel data shows that most people who commute to and from the CBD use public and active transport, and most come from more affluent suburbs”. However, Jones’ analysis also indicated that “active and public alternatives are not sufficient outside of the CBD currently, which means a charging zone outside of it will likely have negative equity impacts”. 

With all the arguments in mind, transport minister Wood will have a tough time appeasing everyone – but that won’t stop him from trying. National has pledged to continue working on congestion charging should it be elected come October.