The City of Melbourne warns the state government’s planned 73 per cent hike in the car parking levy will cripple the CBD.
Councillors said they were concerned the increase would deter visitors and workers from the city and would stall Melbourne’s economic recovery.
Lord Mayor Nick Reece is increasingly at logger heads with the Allan government. Credit: Penny Stephens
In the new year, the Allan government’s congestion levy, which is essentially a tax on car parks in the inner city, will increase 73 per cent in inner-city areas.
The City of Melbourne estimates this will result in a 19 per cent increase in parking fees at council-owned car parks.
The tax, introduced in 2006, is designed to decrease traffic congestion by deterring motorists. The costs are passed on directly to people who use the car parks.
Deputy Lord Mayor Roshena Campbell brought a motion before the council meeting on Tuesday night recommending that Lord Mayor Nick Reece write to Premier Jacinta Allan and Treasurer Jaclyn Symes to ask that the state government reconsider implementing the increase.
“The time is not right to cripple Melbourne traders, Melbourne visitors, Melbourne workers with a 73 per cent tax increase,” Campbell said. “We are doing everything we can to get them back into the city.”
There are more than 130 car parks in the City of Melbourne that supply 68,000 off-street parking spaces, with the congestion levy expected to impact those that are commercially owned and those owned by the City of Melbourne.
Analysis by the Property Council found the 73 per cent increase proposed by the state government would result in an extra cost of as much as $1,386 per spot to be passed on to motorists.
However, think tank the Grattan Institute has backed increases to the CBD’s parking levy as a way to curb traffic, as well as initiatives including charging inner-city drivers during peak hours and discounting off-peak commutes on public transport.
“What we haven’t seen is any modelling or any evidence from the state government about how this is leading to a reduction in congestion,” Campbell said. “This is not about congestion. This is about revenue raising.”
Since the congestion levy had been introduced, it had increased by more than 600 per cent, but the council receives a fixed sum of $7 million a year from it, an amount which has not increased since the levy was introduced almost 20 years ago.
Reece backed the motion alongside a majority of councillors and said the increase would put the City of Melbourne at a disadvantage compared to suburban shopping centres like Chadstone.
“This is the wrong time for a tax increase on Melbourne,” he said. “This is the wrong time for a new tax on parts of the inner city.”
Councillor Owen Guest said it should not be up to the City of Melbourne or any other council to make up the state government’s budget shortfalls.
“What the state government has done to Victoria’s budget will go down in the annals of shame,” he said.
The City of Melbourne is increasingly at loggerheads with the Allan government, even though Reece is a Labor party member.
In recent weeks the council has opposed the government’s work-from-home policy and has criticised how the government is dealing with crime in the CBD.
Labor councillor Davydd Griffiths and Greens councillor Olivia Ball were the only ones who voted against Campbell’s motion.
Griffiths said it was ironic that the council debate was being held less than a fortnight before the Metro Tunnel was set to open, which is expected to enable an additional 500,000 people to come into the city every week.
“Much of the rhetoric that we’ve heard tonight is about taking the opportunity to stick the boot into the state government,” he said.
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