The head of Australia’s competition watchdog believes consumers should pay more to use electricity, roads and airports during peak periods.
Australians could pay more to use electricity, roads and airports during peak periods under a proposal from the competition watchdog to boost productivity.
Australian Competition and Consumer Commission boss Rod Sims has backed the idea of introducing “congestion pricing” on key infrastructure to help make it more efficient.
He says business and governments should be able to charge users according to supply and demand pressures.
“There are opportunities to enhance the productivity of certain key infrastructure assets such as roads, electricity, ports and airports by greater use of congestion pricing,” he said in a speech in Brisbane on Thursday.
“All Australians understand why it costs more to rent a beach house in January than July. We just don’t call it congestion pricing.”
Mr Sims said congestion pricing could involve airlines being charged more for take-off and landing slots during peak times and encourage electricity users to reduce consumption during critical demand periods such as hot summer days.
Motoring lobby group The Australian Automobile Association backed the introduction of road congestion charges, providing they corresponded with lower taxes elsewhere, including fuel excise.
“There has to be a direct trade off between the taxes that motorists pay and new approach,” chief executive Andrew McKellar said.
“The agenda has to be all about how do you get a better deal for motorists, not how do you get motorists to pay more.”
Congestion charges have been introduced in several international cities, including London where motorists pay STG11.50 ($A20.99) when they enter the city centre on weekdays between 7am and 6pm.
Meanwhile, the Australian Energy Users Association, which represents large electricity users like manufacturers and retailers, supported a move away from fixed power prices.
“Certainly the fixed charge is one that hasn’t worked well for large energy users, we find that we have been subsidising other energy users during those peak periods,” chief executive Phil Barresi said.
“Anything that helps users manage their energy costs more efficiently is to be welcomed and if a peak charge assists in that process then we are supportive of further work to ensure it takes place.”
Mr Sims’ comments follow a recent report by the Grattan Institute, which recommended electricity users be charged more for power use during peak times, usually in summer.
It said doing so would lower electricity usage during those times and reduce the need for investment in energy infrastructure, which would lead to cheaper power prices in the longer term.
The ACCC boss also said Australia’s productivity had been harmed by poor infrastructure decisions in the past, and backed state and federal government moves to privatise infrastructure.
“With sound regulation the private sector will operate businesses more efficiently as they will have better incentives for, and impose fewer constraints on, performance,” he said.