NSW Transport Minister Andrew Constance has ruled out applying a congestion charge to Sydney's CBD despite a new report revealing it could do as much to improve city-wide traffic as the $16.8 billion WestConnex project will.

“There will be no congestion tax in Sydney,” Mr Constance said in a statement to the Herald on Sunday, having previously left open the idea.

Amid record spending by federal and state governments on transport infrastructure, totalling $31 billion last financial year, think tank the Grattan Institute will on Monday release a report calling on state governments to complement their investments with congestion-busting charges on drivers who travel into city CBDs during peak hours.

According to the Grattan modelling, a ‘modest’ charge on the perimeter of CBDs using number plate recognition technology could result in 40 per cent fewer vehicles entering cordoned areas during morning peak hours, leading to average speed improvements of up to 16 per cent across CBD roads and up to 20 per cent on major arterial roads leading into the CBD.