Victorian car-park tax stirs foes - The Financial Review

The Property Council of Australia's Victorian executive director, Jennifer Cunich, said: "This is a cynical grab for cash in the wake of the GST negotiations."

The Victorian government announced on Friday that it would impose a levy on Melbourne's long-term car parking spaces in a bid to ease city congestion.

But the PCA said the $38 million in revenue that would be created by the levy is merely a move to restore some of the $65 million in business tax cuts negotiated with the federal government.

"Just days ago the state government was offering to remove inefficient state taxes, and here we have a new one dumped on us to replace some of that lost revenue," Ms Cunich said.

"We fail to see how this next tax will free up more short-term car spaces, alleviate congestion and encourage public transport patronage.

"Our understanding is that similar experiments in Sydney and Perth have failed to deliver these outcomes."

The Victorian Employers Chamber of Commerce and Industry chief executive Neil Coulson slammed the tax, which was introduced without any consultation.

"The jury is still out on whether the Sydney City Council's introduction in 1994 of a $200 levy on all parks has achieved its aim of reducing car-based commuting," he said.

"Some car-park operators have simply recouped their costs by increasing fees on short-term parking rather than on leases and all-day parking used by commuters."

Melbourne's commercial and private car parks will be hit with a new tax of $400 a parking space starting on January 1, rising to $800 in 2007.

Treasurer John Brumby said the levy was an incentive for car park owners to convert long-term spaces into short-term spaces.

The government estimated thousands of new short-term, off-street car spaces would be created as a result of the levy, which would help encourage shoppers and daytime visitors, Mr Brumby said.

The levy would generate $19 million in 2005-06 and $38.5 million in 2006-07, he said.

The government has vowed to use the money to improve metropolitan transport, including $5 million for CBD initiatives.

About 48,000 of the city's 70,000 off-street car-park spaces are long term, but a further 10,000 spaces belonging to public institutions, such as hospitals, museums and universities, are exempt.