A presentation by Mayor Len Brown today gave us some clues about how the Council hopes to fund the City Rail Link project over the next decade, with a target date for opening being 2021. Here’s a couple of key images from his presentation, with further detail in this document and also within these spreadsheets.
Here’s the well worded justification for the project’s need, which comes from the more detailed document:
Auckland’s population is forecast to reach 2.3 million people by 2051. This will mean a dramatic increase in people movements into and around Auckland’s city centre. We can only cope with this kind of growth by investing into our public transport network.
The Britomart transport centre’s capacity for trains will be reached in early 2012. Bringing the Electric Multiple Units (EMUs) into operation will extend this capacity for another 12 years. Meanwhile critical parts of the City Centre bus network, in particular Symonds, Fanshawe and Albert Streets, will all reach peak capacity between 2014 and 2020. On Albert Street alone, this will mean eight buses per minute at peak.
The City Rail Link (CRL) provides another exit point from Britomart. This initially doubles its capacity for rail passengers from 12,000 to 24,000 people per hour and provides options to double this again to 48,000 per hour. It achieves this without spoiling and actually improves the quality of the urban environment. This “future proofs” commuter rail needs into and from the CBD for the next 60 years, while freeing up road capacity for freight and vehicle use.
Existing rail and bus constraints have to be resolved if Auckland is to achieve its interdependent goals of liveability and economic transformation. Most economic growth comes from services and services are people intensive. Auckland’s economy is highly dependent on immigration to supply skilled labour to its service industries. The most significant drivers for migration decisions are liveability factors. Auckland needs to be internationally competitive in this regard. This is why global human resources companies such as Mercer pay so much attention to liveability.
The project will commence with the land designation process in 2011-12 and will continue with property acquisition in 2012-15 and construction from 2016 to 2021. The rail link will be in operation in 2021.
And some further detail on the funding:
The Council is still investigating funding options and further discussions with government are scheduled. It is proposed to fund the $2.4 billion construction cost (in 2010 dollars) from the following sources:
• New Zealand Government financial assistance 50%
• Development contributions 2.5 %
• Alternative funding sources – 30.9%
• General (region wide) rates – 16.6%The Council is preparing a discussion paper addressing key issues around transport funding. Central to this is the need to develop new sources of revenue for funding essential local transport systems as we deal with an approximate $10 billion funding gap. This paper is to be released in the early part of next year to give the community the opportunity to contribute to the debate. The paper will address issues such as the effect of local road user levies on low-income households.
The City Rail Link is a key part of our public transport future but there are others. Included in my proposal is additional funding for public transport subsidy – bus, rail and ferry. I have asked Auckland Transport (AT) to optimise the distribution of this funding between the modes. As part of this additional funding I want to see the public transport needs as identified through the Southern Initiative addressed first. Public transport connections between places of work, education and residence are to be improved to assist these areas of need. Improvements to rail stations, ferry terminals and bus lanes (with particular emphasis on the latter two for north of the harbour bridge) are also projects that are priorities for my proposal within the overall capital budget of AT along with extensions to the walking and cycling networks.
So effectively the Council is proposing a 50/50 funding split with central government for the project. I’m not quite sure whether this split makes sense more than in the simple “we’ll pay half if you do” sense. If the project’s transport benefits to road users are a certain level, then you’d think that NZTA should stump up for that; if the project’s productivity benefits result in existing tax takes of a certain level, then the government should stump up for that. Higher land values could be captured by way of betterment levies (the most likely alternative funding source I think) and so forth.
Overall it’s good to see some funding plan for this project, even if it is reliant upon funding from the government that is not yet forthcoming. This is all very interesting timing with an election just a few weeks away. For example, already the Green Party says they’ve got a plan to fund 60% of the project.
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The CRL won’t open till 2021? Ten years?! Didn’t Perth’s Mandurah line only take some 3.5 years to construct? Is the CRL really that much more complicated?
If Auckland’s public transport (and thus quality of urban life) will continue to suck for another full decade, scarcely any young, educated New Zealanders will stay here. I, for one, rather like Sydney.
Remember it doesn’t yet have any consents, any land acquisition, any confirmed funding, any detailed design…. let alone putting a spade in the ground.
If the project’s transport benefits to road users are a certain level, then you’d think that NZTA should stump up for that
I wish we could get beyond that and say and have the NZTA access transport benefits, not just “benefits to road users”
@sj
I think the auckland CBD rail tunnel is a technically challenging project. The rock under Sydney is great for drilling tunnels, hence why they have so many. BTW Sydney residents also moan about the poor quality of there trains. I was also surprised that they don’t all have air-con there given the climate. That said I have enjoyed the city a lot every time I have visited.
Fair point Scott.
What does “alternative transport funding mean”? Because it sounds like “I have no idea, but I couldn’t possibly ask central government to pay for 80.9% of the project.”
Reading the PDF… It talks about designating the airport line and purchasing some property within ten years. That can’t be right since Brown promised to complete it by 2020. There is also no mention that I can see of the promised rail link to Albany. Are these projects off the table for the moment? Why?
Obi I think he has had a reality check that those other projects are unaffordable at this time. Nothing wrong with that, better than plough ahead regardless like the government does with its RoNS while racking up $18b deficits.
Uplift rates, congestion charges… Lots of things that aren’t otherwise enumerated and don’t currently exist as options.
Of course it’ll require a Minister of Transport who’s prepared to back the necessary legislative tools, and I’m far from convinced that Joyce is at all willing to let Auckland have recourse to significant local funding tools that don’t require frequent rounds of begging and scraping before the residents of the Beehive in order to get money for transport projects.
And here, on cue, comes the minister for the roading lobby white-anting Auckland again – http://www.stuff.co.nz/national/politics/5865873/Government-slams-rail-funding-plan
“…a spokesperson from Transport Minister Steven Joyce’s office said current business cases for the project didn’t add up and the cost to benefit ratio would need to be higher before “any responsible government would seek to invest in it…”.
Making a priority list of projects would be nice. If Waterview and Victoria Park Tunnel were not tunnels there would be a couple of billion spare to fund the rail loop. If the rail loop is such a priority other projects might just have to be less pretty.
There are plenty of unnecessary roading projects within the baseline funding level that could be deferred to help fund the CRL. Some parts of AMETI are horribly expensive like duplicating the Pakuranga Bridge, and may not be needed if the AMETI busway takes enough pressure off the roading system.
Joyce says it is unlikely that “80 per cent of the rail link would be funded from Government taxes.”
Clearly he expects that revenue from congestion charges will be the Government’s to control. If that is the case we may as well stop right there and focus on why the Government chooses to allocate only 0.8% of current fuel taxes to public transport. Giving Government control of a congestion tax will be more of the same.
Shouldn’t a decent chunk be funded by rail users?? They dont even seem to feature.
Or are the economics so bad that even ignoring the massive capital expenditure, there will be ongoing subsidies just for operation of the rail network beyond the construction of the tunnel. If so, thats bizzare.
@ swan. All rail projects are partially funded by the fares rail passengers pay in the sense that incomes goes back to council. But right now that revenue is a small amount because people don’t use our rail system in large numbers. It’s the same problem we have with cycling in Auckland. It’s hard to justify investing in cycling infrastructure because right now it is used by such small numbers of people. But more people will never cycle unless we invest in infrastructure to make it safer. It’s a catch 22. To change the way people travel you sometimes have to invest in a mode before it has really high numbers of people using it.
Aucklanders just can’t continue driving in such high numbers as they do now if the city is going to grow 900,000 people in 30 years time (well, they can but it will mean massive congestion and a deeply unpleasant city to live in). So the council has to look at shifting them onto different modes.
Yes, rail in Auckland will probably need subsidies for the indefinite future (unless we see a really massive rise in petrol prices). But we subsidise road transport too in a variety of ways – almost every transport mode in NZ is subsidised by the govt. It’s just that with some the external costs are more obvious than with others.
“It’s hard to justify investing in cycling infrastructure because right now it is used by such small numbers of people.”
I dispute that. Firstly latent demand is there, and then people would use it if it was built. But that is not a Catch 22. That is a reason to build it.
Then there are all the positive effects, such as removing congestion, reducing ridiculous spending on roads, making urban spaces better, having less obese citizens, the wind in the hair, kids biking to schools, less personal spending on imported cars and fuel.
Not spending money on cycle lanes is bad policy and it is easily demonstrated that it has the best BCRs of all transport projects, plus they are cheap and don’t cost in the tens of billions like the RoNS.
Way more of the NZTA budget should be spent on cycle infrastructure, which is currently less than 1%. Money should be granted to local councils to build what they want, but only to quality design standards, based on what the Dutch have. Now there’s a real National Cycleway system.
Matt I think LucyJH is pretty much agreeing with you. I don’t think you can dispute what she says about the numbers cycling. Those are the facts. ‘Latent demand’ is hard to quantify without some form of research (‘my friends would all cycle if there were more cycleways’ is not research).
There does need to be more work on cycleways in the city no doubt. It is ridiculous that a long and well formed cycleway from the northwest doesn’t make it to the city or that there is no cross town cycleway (the footpath along Quay St is not a cycleway- it’s a footpath with some bikes painted on).The Grafton Road works adding a cycle lane is a good start, but the approach to Grafton Road from the bottom is like a motorway onramp (which it pretty much is) and is not a friendly place for cyclists. Hopefully the top of this lane will not just end but have a sensible way for cyclists to get across 3 lanes of traffic and onto Grafton Bridge.
I understand that subsidies can be justified for a number of reasons, but it appears (based on the funding proposal), that even with all this capital expenditure, subsidies will still be required just for the operation. So it is like building a movie theatre, and not getting enough money from patrons to pay the power bill and staff costs, let alone the cost of capital.
At $2.4b, If we assume 20million net trips a year directly benefitted by the tunnel, and 10% for cost of capital plus depreciation, That is a subsidy of over $10 a trip for the capital of the alone. If you include all the other sunk capital, britomart, DART, electrification, – then it could get up towards $20 a trip! And that doesn’t include operating subsidies. That is starting to get a bit out hand.
Passenger rail is subsidised pretty much everywhere, either by direct government subsidisation or from a highly-profitable freight arm carrying the losses of the passenger arm. There are already significant subsidies for public transport (and they’re getting a lot higher under National, because they won’t allow money to be spent on capital works that would lower operating costs), and the CRL has never been intended to get rid of them. It’ll reduce the sums required by allowing the network to be used much more efficiently, but it’s not going to do away with the need for them.
But why is any transport subsidised? More transport of people or goods doesn’t add more value and it adds cost and degrades the environment so why encourage more of it with subsidies?
Roads are subsidised invisibly, because there’s no charge for their use in the majority of cases. Subsidising public transport just helps balance the ledger.
As for discouraging movement, are you serious? Really? You want people to stay in their homes, and businesses not to make stuff and sell it to others? Coz that’s what movement of people and freight is about: the whole freaking economy is predicated on movement!
“subsidies will still be required just for the operation.”
But what is the alternative? Stop maintaining all rail and roads and make everyone walk?
Make every road and rail fully privately funded per km travelled?
I dont see why land transport is such a special component of the economy that it requires subsidies. What about sea and air travel? What about telecommunications? Water supply? Electricity? These are all essential components to the exonomy that dont require subsidy.
Subsidies distort investment and inefficiencies. I thought one of the arguments against auto based development was that road travel is subsidised? Two wrongs don’t make a right. There is no reason to increase the aggregate amount of travel in Auckland for it’s own sake. It sounds environmentally and economically wasteful to me.
$2.4b is $2.4b of concrete steel diesel etc etc.
Transport is subsidised because it is a public good, that is to say the benefits are externalised to the wider economy and the people that benefit from it the most overall are not the ones doing the actual travelling. Transport allows people to work, eat and enjoy themselves, it allows the delivery of goods and services, and in particular mechanised transport creates a much broader access to employment, resources and opportunities and conversely a much more wealthy economy than if we all stayed within walking distance of our homes.
If you think about it you can’t stop other people from benefiting from the flow on effects of your work or activities, so there is no way you could remove a subsidy and make it user pays. Subsidy on transport simply reflects that it is better for everyone to have reasonable access to moving about the place. Much the same reason we have social welfare, public health, education, a national police force etc. It’s better if everyone is covered to the same general level even if that means some people pay a bit more than their share.
Sea and air travel, telecommunications, water etc do attract various kinds of subsidy (some directly, some through government oversight and regulation, others in terms of using government owned land, being exempt from rates and taxes, etc) and so they should as they are also public goods that improve the economy and society as a whole.
Public goods are those that you cannot prevent people from using. A good example is a defense force. You can’t stop people benefitting whether or not they would choose to pay for a service, as individuals. Roads (but not rail) have been considered public goods on the basis that you can’t stop people from using them. To a certain extent that may be true for, say, pedestrians on a local road. But for vehicles technology is now available to allow charging based on when, where, and what length of trip occurs. So in general roads are not a public good for vehicles, although we pretend they are.
Electricity, air and sea transport have never been considered public goods and are very much able to be delivered unsubsidised. Whether or not they are is politics.
“You can’t stop people benefitting whether or not they would choose to pay for a service, as individuals.” Thats the very definition of land transport infrastructure, along with electricity and shipping. How can we stop the public benefiting from the transmission of electricity, the delivery of goods etc even if they don’t purchase them directly themselves?
The road network, main trunk line, electricity grid and the like are non-excludable and non-rivalrous (to the general extent of the terms, nothing is a pure and perfect public good), they are common goods that work best in one open accessible system rather than competitively, and their use by anyone generally benefits the whole economy and society and so they can attract a subsidy to that end.
Swan, air and sea transport are very definitely subsidised, by the absence of full capturing of their polluting externalities, particularly air travel. The same subsidy is applied to land transport, and because cars are a much, much more polluting per-user form of transport than public transport, they get a much greater level of invisible subsidy per vehicle than is applied to any form of public transport.
Similarly with road crashes (which almost never involve public transport vehicles) that lead to serious injury and/or harm, where the costs of providing the emergency service response are borne by the taxpayer rather than by the end “user” of the services. Public transport operators contribute significantly to the cost, through their insurance levies, income taxes, and road taxes, but they derive very little “benefit” from the existence of those services in a road crash context.
Apparently Labour’s making a transport policy annoucement up on K Rd (at the site of a future CRL station) on Sunday. Anyone know what time? Google not being my friend this time.
Join us at Beresford Square, off Pitt St, this Sunday from 11.30 for a major Labour Party campaign announcement which will positively affect the future of Auckland. Some good news we’ve all been waiting for. Hope to see you there.
(Authorised by Chris Flatt 160 Willis St, Wellington)
Woo hoo! Thanks.
Usually projects included in the LTP get done, so who knows, there’s much more work to be done yet.
The projects haven’t, traditionally, been so at odds with the view of the regime in Wellington. Labour was, by the end, quite sympathetic to public transport projects. Joyce considers them to be a waste of scarce money that’s better spent on building roads.
If item A is transported twice as far as item B does it have more value to the the consumer? No. If employee A travels twice as far to work as employee B are they worth more to their employer? No. The misguided notion that transport is some sort of “good” in its own right needs re-examining. There’s no doubt that it is necessary but to encourage more of it by distorting the supply-demand economics via subsidies is asking for trouble…and we have it. Time to address the subsidies to road transport not add more to public transport. An economy that focusses on value-adding activity and minimises non-value-adding activity will be a better one.
The comments to this post seem to have been taken over by undergraduate neoliberals spouting their over-simplified nonsense with no relation to planet earth…. the last few ACT foot-soldiers still plodding along, eh. Who’d a thunk it?
How about putting forward a cogent response to the points rather than immature namecalling and an overactive imagination? Has it not occurred to you that “planet earth” is becoming a more challenging place for humans to live on partially as a result of all the “transport” that is going on?
Hey fair call and I knew I was up for that charge when i wrote it, but, you know, it really is so boring going over the same territory again and again. User pays is a bankrupt and over-simplified ideology with an obvious appeal. Over-simplified why? Because it doesn’t exist, all through society their are inequalities and cross subsidies. Ever been to a hospital or a school? Oh perhaps you want to change that to user pays too, move to the States then and see how that works. That’s a subsidised system too; for the benefit of private insurance companies and private medical and pharma companies.
Do I want more and better service for our subsidies? Hell yes, is the answer to dump them? No. The road network, airports, ports and everything have been built by society- basically we build what we want, the argument needs to be about what is the best shape for the built environment and our transport infrastructure for society’s benefit, not which means of spending is the ideologically most pure.
I am opposed to *transport* subsidies (of all types, including the hidden costs of road transport) because they lead to more consumption with subsequent environmental damage, poor allocation of resources and other negatives. You seem to be turning the discussion into some sort of overarching idealogical one and I refuse to be pigeonholed. I’m all for better transport but it seems that many here just want more of it.
…and by-the-by I have lived in the US for a number of years and experienced the private medical system that operates there and it is horrific. I have also lived in the UK and experienced public dentistry there…and it is horrific..but that is off topic.
“Time to address the subsidies to road transport not add more to public transport.”
While that makes some sense, it doesn’t a) address historic underinvestment in PT, nor b) does it create more transport CAPACITY. The logic that flows from your comment would seem to simply reduce transport investment, which would mean that Auckland (and certainly it’s core) would not be able to grow anymore.
Also, transport IS a public good. Sorry, but if “communication” and “interaction” between human beings and their various ventures (be they commercial, social or simply recreational) is not a “good” in your view then I am unsure why the state should support humans with anything. The only thing that seems left is maybe ensuring the rule of law, but we simply don’t subscribe to that ultra-libertarian view here.
The “good” is interaction or “communication” and I fully subscribe to the notion that they are goods. The good, however, is not transport per se.
Good investments produce an excess of benefits over disbenefits. Hiding some of the disbenefits does not turn a bad investment into a good one.
MFD, who is really promoting more travel here, or rather a greater rate of travel per capita? The general thrust of everything on this blog is to reduce the need for mechanised transport (i.e. living in walkable centres), reduce the distances travelled (i.e. anti-sprawl planning) and then shift the remaining travel to more efficient and environmentally friendly modes (i.e. rail, bus).
Travel is essential to our economy, society, lifestyle and wellbeing. Yes we don’t want to do it for it’s own sake (although I am partial to the occasional drive in the country or scenic rail trip) but we do need to allow it to occur efficiently and ecologically. Subsidising public transport and removing subsidies on private transport would be a good start.
The extreme example of subsidised transport promoting more use of it is the Gold Card holders’ trips to Waiheke. A decision has been made that old folks need to have some of their spending decisions made for them by way of free travel on public transport. A benefit has been made available to those who have access to PT and to those who prefer travel to, say, renting a DVD or buying a book. The old saying that if something is free it’s worthless seems apt.
Subsidised transport does not encourage efficient use of it – quite the opposite. In a manufacturing context it penalises transport-efficent producers in order to benefit transport-inefficient producers. In an employee sense it has a similar effect.
Of course travel is not an end in it’s own right (except on holidays when it is!), but good transport does add value to an economy.
” If employee A travels twice as far to work as employee B are they worth more to their employer? No.”
If an employer can recruit from a larger residential area they can recruit employees with closer match to their required skill set. If person B with the right skills is now happy to work in the CBD because they can get a 30 minute train from howick to work, rather than being stuck on the motorway for an hour, then the employer doesn’t have to hire person A who has the wrong experience and is going to be less productive.
“If item A is transported twice as far as item B does it have more value to the the consumer?”
If a consumer can get the exact product they want from further afield, instead of having to get a product that imperfectly meets their requirements from the local shops, then yes, item B does have more value.
You are using apple to orange comparisons. If transport adds value to a given item then transporting it up and down the motorway a few times would increase its value. It clearly doesn’t. Similarly if commuting adds value to a worker then if that worker moves further away from his place of work he would become more valuable to his/her employer. This is clearly not the case. I suggest to read up on Lean Manufacturing for an insight.
Transport, per se, adds no value. It destroys value.
Transport absolutely adds value, but it’s not the distance travelled that matters (except for the transport provider). Rather it’s the ability to get goods from the source to the destination. If a manufacturer cannot get their widgets to a buyer, the widgets are worthless. They might be the greatest widgets in the world, capable of solving poverty, hunger, and world peace, but if they just sit in the manufacturer’s factory their greatness is completely irrelevant because it’s of utility to nobody.
There’s also the issue of getting the components and machinery to construct the widgets, and of the staff getting to the factory to make the widgets.
I knew that blinkers were mandatory uniform for the neoliberal economics crowd, but I didn’t realise they were quite so, well, thick.
Access to raw materials and markets is a prequisite for a successful manufacturing businesses. The issue is not one of transport/no-transport (the lazy binary argument that many of you seem to be resorting to) one but one of degree. A manufacturing company that I work with supplies a commodity material to both the domestic market and the export market. The latter is marginal as the additional transport costs diminish the value of the commodity. The former is profitable as the imported material has had its value diminished by the transportation required to get it here. If a business cannot survive in its present form if it were to be exposed to the real costs of transport it needs to relocate closer to the markets or closer to the materials or get out of business.
Is it any wonder that global greenhouse gas levels are rising when so many of you seem to think that under-pricing it is a good idea? Realistic transport pricing would see more businesses located on (electric) rail, more PT, more compact cities, greater productivity, more local manufacture, less environmental damage, fewer road fatalities/injuries, less respiratory disease and a host of other benefits.
OK, consider this argument: If roads are goods public, then making their utilisation more efficient is a benefit to their public “goodness”, as it were. Public transport, in the form of RTNs (since non-R-TNs just add to congestion), imparts significant efficiencies in the operation of road networks by taking low-value trips off the roads and onto the RTN. This allows the road capacity to be used for money-generating trips.
Since there is no charging for most of the externalities associated with use of the road network, thus saving the beneficiaries of the public good from ever directly paying the true costs, it is necessary to subsidise public transport in order to encourage efficient use of the road network. The alternative is to build more and more road network, carrying ever-greater sums in terms of un-captured externalities, and eventually simply running out of physical space into which more traffic lanes can be built.
The only fair alternative is to price in externalities for all forms of transport, roads included, and then watch as our economy and society grinds to a halt because only a tiny handful of the population can afford to pay the full costs of their individual transport decisions. In the absence of complete pricing, subsidising public transport reduces some of the externalities imparted by the road network – pollution, crash-related harm, public space lost to traffic lanes – and improves the functioning of income-generating activities that rely on the road network.
The original business case for the CBD tunnel envisaged that post-completion there would be just as much road congestion as there was before. The underlying assumption being a growing population. In short the CBD tunnel permitted growth of the CBD so in that context there would be no benefit to road users.
Let’s consider your contention that should all forms of transport be fully priced the economy would grind to a halt. The costs are there whether subsidised or not. The economy is not grinding to a halt ergo your contention is erroneous. The idea that subsidies reduce these costs is bizarre. They increase costs since they diminish price signals to the users and load costs onto those who use less (see above).
Subsidy allows a redistribution of costs, it effectively facilitates affordable travel for the masses via general and business taxation. This means that people on low and moderate incomes can afford to travel and work, it means food and other products remain affordable for consumption. Put the price of petrol up to $30 a litre and the price of a bus at $10 a stage to cover the full and total costs of travel and you’ll soon see that services become extortionately expensive, retail spending would plummet and people will spend almost all of their income just getting to work and buying food and clothing that has tripled in price due to delivery costs.
If the masses stop buying and working then the economy will grind to a halt. Sure that means certain sectors are no longer subsidising the travel of other sectors, but in the end that becomes moot as we would all sectors would be screwed.
How is it that you are having difficulty grasping the fact that if transport is too expensive for the economy without subsidies it is too expensive…period? Do you really believe that by making someone else pay we can ignore that portion of the cost to the economy?
As for the real costs of road transport equate to $30 per litre (a figure you just made up?) than let’s price it at that figure via taxation and cease pretending that it is $2.20 per litre and instructing the masses to pay no attention to the man behind the curtain.
May I suggest that we stop redistributing transport costs and instead, redistribute wealth via the tax system eg by decreasing the lowest tax rate or having a tax-free allowance. Subsidised transport is subsidised for all, rich and poor alike and leads to environmentally-damaging proposals such as subsidising transport for people who want to live in Hamilton and work in Auckland. How is this a good thing?
Dear MFD. Roads are also subsidised, parking is subsidised, road fatalities and accidents are subsidised road policing is subsidised… get off your high neoliberal horse and back down to earth. It doesn’t work; there is no purity, can never can be purity… you are going to have to accept that everyday, in lots of little ways you pay for some stuff that others use and we pay for some stuff that you use.
The real question is what is the best shape for our world, for all, and how is it best to pay for and order that. Following little atomised money trails without sense of the big picture is useless.
I think I’m with MFD on this one. I don’t see any reason why roading should be subsidized for motorized traffic. I agree there is some public good aspect for pedestrians and cyclists (to ensure nobody is stranded), however for motorised traffic it does not meet the definition as a public good (as it is both rival and exclusive). I think it is appropriate that all roading costs are incorporated into “roading fees” such as petrol tax, Ruc’s etc.
Although I have not done the calculation’s myself $30/L petrol does seem excessive. But if it was, think of the amount of money that could be put into tax cuts/social policies/deficit reduction if road use was correctly priced.
Parking is a bit more complicated as some private business owners choose to subsidies it for their customers. Which as long as there are no minimum parking requirements I don’t have a problem with. In Honk Kong I saw a mall that subsidized its visitors PT via the octopus system.
Of course cranking up petrol prices/RUC’s won’t be politically popular, and the lefties will rightly yell about its regressive nature, while the righties think its just another tax. Of course general taxation should be adjusted to compensate.
BTW I quite like the “big kahuna” tax/welfare concept, google it.
I don’t have any difficult “grasping the fact that if transport is too expensive for the economy without subsidies it is too expensive… period?”, I never claimed transport was too expensive for the economy at all.
What I said was that universal access to transport was ideal, but paying the whole real costs individually would be too expensive for many people. The economy can afford it as a whole even if many members of that economy can’t alone.
I don’t think by making “someone else pay” (not my words, if anything I pay for other people’s transport not the other way around) means we can ignore the cost, I just think that distributing the cost broadly across the economy and society is a good thing for the reasons I noted above. We all pay, some more than they use admittedly, but we all benefit far more from having easy access to resources, a wide mobile labour market and the like.
Yes I just made up the figure of $30 a litre as an example, I have no real idea what it would cost if we removed all subsidies and priced in all externalities into petrol tax. $30 a litre is probably conservative.
Let’s just stop building roads then as well. They are subsidised through fuel tax.
What Nick said. Price transport to capture all externalities and costs, and most workers couldn’t afford to get to work. Most businesses couldn’t afford to transport their product to market. Hence, the economy would grind to a halt.
…and your evidence for this hypothesis is?
…the fact that every half-decent economy subsidises transport to some degree.
Because the alternative is obvious if you step outside the Ecomonic 101 class and look outside the textbook…..
” In short the CBD tunnel permitted growth of the CBD so in that context there would be no benefit to road users.”
Maintaining the same level of congestion in the face of a growing population / number of trips, is a reduction in congestion relatively.
Think of it this way, you could wait for the population to grow 50%, and for the road network to be totally overwhelmed to the point that you could only travel without gridlock at 3am, then build the rail link to get commuters of the road network and easy congestion. That would clearly be the tunnel reducing road congestion.
A road at capacity is full. Read the business case and digest.
“Economics 101” 🙂
No, Economics 50-and-a-half. They haven’t even finished the first half of the introduction, that’s why they’re so incapable of seeing the flaws in their own arguments.