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State Governments Urged To Introduce Peak Hour Driving Tax For Australia's Busiest Roads

A new plan could see Australian drivers hit with a fee to use their cars on some of the country's busiest roads, however NSW and Victoria have flat-out rejected the idea.

An Australian think tank says it's time for the country's major cities to follow the likes of London, Singapore, Stockholm and Milan - and introduce a congestion charge.

The Grattan Institute's proposal claims charging drivers for taking up busy city roads - such as Sydney's Parramatta Rd and Melbourne's Flinders St, could reduce traffic by up to 40 per cent.

READ MORE: Sydney's International Reputation Is Being Marred By Congestion

A congestion charge could reduce traffic by 40 percent. Image: Getty Images.

"While no one wants to pay more to drive, neither do they want the ordeal of delays and unpredictability when they do travel," Grattan's Transport Director Marion Terrill said.

Terrill says hitting drivers with  charge for driving in the CBD of Australia's largest cities in peak hour traffic times could have a substantial impact.

"Even a modest charge could mean about 40 percent fewer cars entering the central area in the morning peak and speed increases of about one percent across the network," she said.

While some critics argue against congestion charging because it could hurt those who can least afford it, Terrill said these fears are overblown.

new york city
New York is the largest city to have introduced a congestion tax. Image: Getty

She said people who drive to the city each day for work are more than twice as likely to earn a six-figure salary. The median income for a Sydney driver to the CBD is nearly $2500 a week, about $1000 a week more than the median income of a full-time worker across all of Sydney.

READ MORE: 11 Congestion Busting Road Upgrades Now Have An Expected Date

"The CBD is well-serviced by public transport, which is how most people get there," she suggested as an alternative to driving.

The proposed charges would only apply during peak periods - morning and afternoon rush hours.

"If particular roads are in high demand, it's fairer that heavy users pay more than those who rarely or never use them," Terrill said.

New York is the latest global city to embrace the concept and Vancouver, Beijing and Jarkarta are reportedly not far off going down a similar road.

But NSW Premier Gladys Berejiklian has ruled out a congestion tax for Sydney, saying driver were already being slugged with tolls to use the city's major roads.

"The best way to reduce congestion into the future is to build major public transport projects," she said. 

"Our state's seeing more investment in public transport than ever ... That's what we're aiming towards, not a congestion tax."

Victorian Premier Daniel Andrews has also said Melbourne drivers won't be hit with a CBD tax anytime soon.

Traffic on the Warringah freeway in Sydney. Image: AAP

"The best way to ease congestion is to build a public transport network system which can deliver more trains, more often -- and we're getting it done," he said.

"We have no plans and do not support a congestion tax."

It's not the first time a congestion tax has been recommended for Australian cities.

Last year, the Infrastructure Association of Queensland called on the state government to introduce a similar toll for drivers who want to use their cars in Brisbane CBD.

The IAQ recommended that the toll replaces the cost to drive on underused roads such as the Clem 7, Airport Link and Legacy Way, and that drivers are charged a daily fee to enter the CBD instead.