Weekly cap on tolls for Sydney motorists to be lowered in state budget

A cap on tolls for Sydney motorists will be cut to $50 a week for 12 months as part of a suite of targeted cost-of-living measures to be unveiled by the Minns government in its final budget before next year’s NSW election.

Dropping the weekly cap on tolls temporarily from $60 to $50 from July 6 will be one of the centrepieces focused on transport in the budget on Tuesday.

A promised scrapping of administration charges on toll notices as part of a deal with private motorway operators will also come into effect next month. The fee on a toll notice has been $10, but doubled to $20 if not paid within 55 days.

Ahead of Labor’s final budget before the March election, the Herald can reveal the government will report that employee expenses increased by 6.2 per cent per annum in the three years since the election.

However, budget documents seen by the Herald show that despite the removal of the public sector wages cap, the growth in employee expenses compares favourably with the final term of the former Coalition government, when employee expense growth averaged 6.4 per cent.

The budget documents say the relatively constrained growth is a result of reforms including a 15 per cent reduction in senior public service executives, cuts to workers’ compensation entitlements and changes to the police insurance scheme.

It comes despite increased costs associated with the decision to bring the Northern Beaches Hospital and its workforce into public hands.

Treasury is predicting employee costs will “further moderate” to an average of 3.9 per cent per annum over the budget and forward estimates.

Treasurer Daniel Mookhey has talked down the prospect of a big-spending budget ahead of the election in March, instead focusing on the government’s record of spending restraint and deficit reduction.

However, the government is conscious of the impact of rising fuel costs, particularly on voters in western Sydney.

The temporary cut to the toll cap is forecast to make an extra 200,000 motorists eligible for relief. About 948,000 toll accounts already reach the $60 weekly cap.

Premier Chris Minns said the government could not fix every pressure faced by families, but cutting the toll cap and scrapping toll notices would keep more money in people’s pockets.

“Some of these admin fees were higher than the toll itself. That never made sense to me and we’re getting rid of them for good,” he said.

About $100 million from the state’s toll relief scheme, which includes the weekly cap, was unclaimed by motorists last financial year. The government made the $60 weekly cap permanent in December last year.

The introduction of two-way tolling on the Sydney Harbour Bridge and Harbour Tunnel from as early as 2028 will be used to help fund toll relief measures.

Mookhey has been laying the groundwork for painful reading ahead of Tuesday, warning the impact of the oil shock and interest rate rises on the state’s economy had meant that growth forecasts have been slashed to 1 per cent for the next two years.

While Treasury is not forecasting growth to contract in NSW, Mookhey said the government was “alive to the risks” if interest rates continued to rise.

Michael Brennan, the former Productivity Commission chairman who is now chief executive of e61, a not-for-profit, non-partisan economic research institute, said NSW was suffering a case of “fiscal long COVID” after eight consecutive years of operating deficits.

High inflation and interest rates were having a larger impact on the economy because NSW is more exposed to a downturn in the property market, he said, noting the question hanging over the budget was whether the fall in revenue from stamp duty was a blip.

“The key question the NSW government will be mulling over is whether these changes are transitory or permanent,” he said.

While Brennan expected expenditure growth to be closer to 5 per cent after three years of restraint, he said NSW was in a better budget position than most states other than Western Australia because deficits had trended down and overall debt was relatively modest as a proportion of gross state product.

“With continued spending discipline, despite revenue write-downs, and structural spending pressures, tomorrow’s budget can still credibly chart a course back to relative fiscal health in the next two years,” he said.

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