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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 the largest shake-up of pricing in years.
Under a deal between the NSW government and motorway operator Transurban, tolls on the Lane Cove Tunnel will fall by 10 per cent, while the same reduction will apply to longer journeys on the M2 motorway from July 1.
The cap on distance-based trips on the M7 will also be cut by 10 per cent from January 2028, subject to a $850 million project funded by the government to widen the two-lane sections of that motorway, and the M2 between Richmond Road and Windsor Road.
It takes the total bill to taxpayers of the deal to almost $1 billion, which includes M2 and M7 widening and a $143 million estimated cost to the budget from toll reform over five years.
Less than eight months out from the state election, the deal will also include a 20 per cent cut to tolls on the Cross City Tunnel when the $7 billion Western Harbour Tunnel opens in 2028. The new tunnel will have the same two-way tolls as the Sydney Harbour Bridge and Harbour Tunnel, which will also have them introduced in two years.
Sydney’s largest toll road, WestConnex, and NorthConnex tunnel are two notable omissions from the deal between the government and Transurban.
Transport Minister John Graham said WestConnex was “too big [and] too complex” to get a good deal for taxpayers and make it part of the latest agreement.
He conceded that the reductions on the four motorways were “modest”, reflecting the tough negotiations with the operators over privatised toll roads.
While pricing will fall on four motorways, two-way tolling will be introduced on the Eastern Distributor when the Western Harbour Tunnel opens in two years. The price in both directions will be set at 53 per cent of the northbound toll, which at present is $10.48 for cars and $20.97 for trucks.
What do changes mean for journeys
A car trip along the M2 and Lane Cove Tunnel now costs about $15.52 per journey. A 10 per cent reduction in tolls will cut the cost of a journey to about $13.97.
A trip by ute from Sydney’s northwest to the lower north shore along the M2 and Lane Cove Tunnel costs about $17.74. The changes will result in the cost of the trip falling to about $16.19.
A government-commissioned review led by former competition watchdog chairman Allan Fels of Sydney’s motorways recommended two-way tolling on the Eastern Distributor.
As part of the latest changes, tolls for motorcyclists on all of Sydney’s motorways will be progressively halved from July next year.
However, heavy vehicles will progressively pay 3.15 times the tolls – up from three times – 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.
Despite their omission from the deal, an increase in the so-called truck multiplier will apply to both WestConnex and NorthConnex.
Graham emphasised that toll agreements with Transurban were not being extended to pay for the deal.
Premier Chris Minns said the agreement with Transurban, which had been “painstakingly negotiated”, would result in a “modest reduction” in tolls for motorists while building on the permanent weekly toll cap.
“We can’t abolish toll roads. We didn’t go to the last election promising that we would abolish them, but we promised real relief to the NSW motorists. And this package … does just that,” he said.
In addition to the 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.
Coalition transport spokeswoman Natalie Ward said the changes hardly amounted to the radical reform that was promised by Minns, describing it as “all talk and no action”.
The opposition cited figures showing the toll changes covered only about 40 per cent of total traffic movements in Sydney given that motorways such as WestConnex were excluded from the deal.
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 latest deal, Transurban and other large motorway investors will contribute $75 million over five years to the weekly toll cap.
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Matt O’Sullivan is transport and infrastructure editor at The Sydney Morning Herald.Connect via X or email.From our partners
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