Taxpayers could wait years for a major overhaul of the NSW toll-road system as the government faces warnings that any reforms will have to protect the motorway network's monopoly operator.
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Changes recommended by an independent review of tolls - including giving the NSW government power to set prices across the whole network - are not expected to begin until at least 2027.
The review, jointly led by former competition tsar Allan Fels, found motorway tolls in Sydney were higher than necessary or desirable and that a state government cap-and-rebate scheme was unsustainable.
The dominance of private toll-road operator Transurban, the only non-government owner of motorways in the state, was also highlighted as potentially harming competition.
The company must engage in the process of toll reform, the final report released on Tuesday said.
"Transurban needs to acquire from the Sydney community a social licence to operate," it said.
"The company is well aware of this but may have further to go to achieve it."
Transurban said it was committed to working on reform that protected the value of prior, significant investments in the road network.
"The NSW government and the review have both recognised the importance of honouring contracts that are in place, and each note that there are multiple options for achieving reform," the company said in a statement after the report was released.
Commuters in western Sydney were disproportionately bearing the financial brunt of the city's largely privatised toll-road network, the review found.
But all taxpayers contributed to the cost of tolled motorways by either paying to use them or subsidising the bills for others after the Minns Labor government offered rebates worth hundreds of dollars to each eligible driver.
The review found that was not sustainable and that the relief was inadequately targeted, complicated to administer and created unintended beneficiaries.
"Toll reform is preferable to toll relief," it said.
"Increased traffic and patronage of toll roads, through induced demand created by toll relief, directly benefits operators by increasing their revenues."
A network-wide toll, founded on flexible, declining and distance-based pricing could be a better option.
Means-testing the existing $60 weekly toll cap rebate and increasing it to $70 could ease pressure on government finances ahead of a broader pricing overhaul, the review recommended.
A government-run NSW motorways entity should also be established, as part of a legislative package giving greater control over toll prices, if operators cannot reach an agreement for network-wide pricing.
The NSW budget, delivered in June, included $16.6 million to support reforms arising from the review, including a commitment to set up the motorway body.
The Labor government is expected to respond to the report by the end of 2024, but ministers have previously backed continuing toll-road cashback schemes.
The review was led by Professor Fels, the former chair of the Australian Competition and Consumer Commission, and former Consumer Affairs Victoria director David Cousins.
Australian Associated Press
