Victorians could save 85 per cent on transport costs if a pay-as-you-go system replaced car registration, insurance and Myki fees, according to a report.
Infrastructure Victoria has called for the introduction of a network pricing scheme that would charge drivers and public transport users according to the time of day, the distance and how they travel.
The paper suggests that congestion could cost the Victorian economy $10 billion in operating costs, pollution and time by 2030.
The infrastructure advisory group said transport network pricing would reduce congestion, claiming research shows the model could remove 168,000 cars from the state's roads.
"Transport network pricing means a shift away from traditional thinking ... If we make this change, it can be accepted by the community and provide an effective reduction in congestion," the report states.
New research found that with transport network pricing, average speeds in inner Melbourne during morning peak hour would be around one third faster on public transport.
The group said Victorians were ready for change, but they needed incentives.
It claimed a flexible, complementary pricing system would help, with one in four people saying they could change their time or means of travel.
The way people are currently charged for transport is "unfair" and does not get the most out of the system, the report states.
"Currently, pricing doesn't consider the mode or the distance travelled, meaning many people pay more even though they don't travel far or often," it added.
A government spokesperson said the report and its findings would be considered.
"We have consistently ruled out tolling existing roads," the spokesperson said.