Motorists spending more than $25 a week on Sydney's toll roads over a year will be eligible for free vehicle registration, in a move Premier Gladys Berejiklian concedes will cost the state up to $100 million in the first year and even more into the future
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The so-called rego rebate will save the majority of motorists who apply for the scheme $359 a year on registration costs, and some up to $715.
The scheme will be available for standard privately registered cars, utes, four-wheel-drives and motorcycles from July 1 next year but not trucks or other vehicles weighing more than 2795 kilograms.
It will be backdated to allow motorists to claim free vehicle registration if they spend more than $25 a week from July 1 this year.
Announcing the rebate on Monday, Ms Berejiklian hesitated at revealing the estimated hit to the state budget of the scheme but when pressed said it could be up to $100 million in the first year.
"It could be more than that amount into the future. This is a growing cost to government but we know we can afford it," she said.
"We will be able to tell you a bit more once this first year is finished because we know this could affect people's behaviour."
The government has been under attack from Labor over the reintroduction of tolls on a widened section of the M4 motorway between Homebush and Parramatta.
And a NSW legislative committee inquiry into tolls last month recommended that the state government investigate a network-wide cap on charges for Sydney's growing labyrinth of toll roads.
Ms Berejiklian said the rego rebate could "bring back people onto roads they haven't previously used".
"We know this a behaviour shifter so therefore we need to make sure we have accommodated for that," she said.
"At the end of the day we know it's good sound policy and we know many households will be very relieved about this."
However, she rejected suggestions it would discourage people from using public transport, saying the state would not be spending $20 billion on new metro train line if "we didn't believe in public transport".
The scheme is reminiscent of the M5 cashback scheme introduced by the Carr Labor government in the late 1990s, shortly after an election.
The cost to the NSW taxpayer of refunding motorists who drive on the M5 South West has surpassed $1.5 billion and threatens to top another billion dollars over the next 10 years as refunds to motorists for tolls surge.
The latest scheme will apply to private drivers who use any of Sydney's existing toll road, and any new ones built such as the $16.7 billion WestConnex motorway or the F6 Extension in the city's south.
It comes as the government embarks on the sale of a 51 per cent stakein WestConnex, and commits to building the "Beaches Link" tunnelto Sydney's north east, and the F6 extension, both of which will be tolled.
