Tolls cut on Sydney’s motorways following long-running negotiations

Tolls will be cut on four motorways in Sydney including the M7 and M2 from as early as July next year while two-way tolling will be introduced on the Eastern Distributor as part of largest shake up of pricing in years.

Less than eight months out from the state election, 10 per cent will be cut from tolls on the Lane Cove Tunnel, while the same reduction will apply to longer journeys on the M2 motorway from July 1 next year.

The cap on distance-based trips on the M7 will be cut by 10 per cent from January 2028, subject to a widening of the two-lane sections of that motorway, and the M2 between Richmond Road and Windsor Road.

Tolls on the Cross City Tunnel will be reduced by 20 per cent when the Western Harbour Tunnel opens in 2028.

Charges for motorcyclists on all of Sydney’s motorways will be progressively halved from July next year.

As part of the changes, heavy vehicles will progressively pay 3.15 times the tolls for cars and other light vehicles across Sydney’s motorway network, except on the Lane Cove Tunnel, from July next year. The government said the higher tolls for trucks would be used to support two new heavy vehicle toll relief schemes.

The price discounts for Sydney’s patchwork of toll roads follow two years of direct negotiations between the Minns government and toll road giant Transurban.

Premier Chris Minns said the agreement with Transurban resulted in a “modest reduction” in tolls for motorists while building on the permanent weekly toll cap.

“Families are used to hearing about prices going up. Today we’re announcing something that’s going the other way,” he said.

In addition to the direct deal, the government has reduced future toll increases for the Sydney Harbour Bridge and Sydney Harbour Tunnel to 3.25 per cent, lower than the 4 per cent previously planned from July next year.

The government has been negotiating with Transurban and other large investors about a shake-up of tolling contracts since July 2024.

They have already reached a deal to scrap administration charges on toll notices, while the government confirmed late last year that motorists will be charged two-way tolls on the Sydney Harbour Bridge and Harbour Tunnel from as early as 2028 to help fund a weekly cap on motorway charges across the city.

The government recently cut the toll cap to $50 a week from $60 for 12 months as part of cost-of-living measures in the budget.

As part of the deal, Transurban and other large motorway investors will contribute $75 million over five years to the weekly toll cap.

Transurban, which will release its full-year profits on August 13, will brief analysts on the shake up on Monday morning.

A government-commissioned review led by former competition watchdog chairman Allan Fels recommended two-way tolling on the Eastern Distributor motorway. The Eastern Distributor and WestConnex account for about 40 per cent of toll revenue in Sydney.

More to come

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