The inclusion of congestion pricing in the recent Auckland Transport Alignment Project interim report has (helpfully) reignited the public debate on the topic. Transportblog’s authors have been pretty enthusiastic about the idea – see e.g. Stu Donovan’s posts on the topic.

But the announcement also raises some questions. For example, congestion pricing is certainly a good idea in principle, but could we put it into practice in Auckland without unintended consequences? And would people in Auckland get on board with it?

So I thought I’d open this up to readers: What do you think the preconditions are for congestion pricing in Auckland? In other words, what would we have to do in order to make the scheme work?

I have my own thoughts on the matter, but rather than putting them forward I thought I’d summarise some of the main things that come up in discussions. I’ve left aside the exact design and technical feasibility of congestion pricing – for now, let’s just assume that it’s going to be possible to implement a GPS-based pricing system that allows for variable tolls between different roads and time periods.

1. We don’t need to do anything else.

Some people argue that congestion pricing will work without any further changes to transport infrastructure or services. Stu, for example, put forward this case the other week.

The argument in favour of this view is that congestion is typically very concentrated in peak periods due to bottleneck delay, and that encouraging people to take some trips a bit earlier or a bit later will benefit the overall transport network without imposing large costs on people who re-time journeys to avoid tolls.

2. We need to provide more public transport infrastructure and/or walking and cycling options before implementing congestion pricing.

A second common view is that we need alternative, non-driving transport options in place prior to congestion pricing. Reasonable people could disagree on what would represent enough alternatives, but I’d suggest that a reasonable aspiration would be:

  • Bus routes that cover most of the city, with reasonable frequency
  • Spare rapid transit capacity through key pinch points such as the Auckland Harbour Bridge and Panmure Bridge
  • Cycle lanes running on or parallel to many urban arterials.

The argument in favour of this view is that it is unfair to ask people to pay a toll without giving them options for avoiding it. In that respect, it conflicts a bit with the first view, which holds that people will have the option of re-timing trips to avoid tolls.

3. We need to use the revenue from congestion pricing to improve transport infrastructure and services on busy corridors.

A third view is that we should spend any additional revenues from congestion pricing to build additional transport infrastructure. Some people argue that this should be more roads, while others argue for public transport.

It seems a bit perverse to implement a demand management measure (congestion pricing) and then turn around and spend more building infrastructure. However, the argument in favour of this view is that congestion pricing will give us a better indication of which corridors have high economic value – as evidenced by higher tolls – and hence that investment is needed to allow more people to use them.

4. We should “recycle” additional revenue from congestion pricing into lower taxes or rates.

Another view on what to do with the revenue from congestion pricing is that it should be returned to households. In other words, the scheme should be “revenue neutral” on the whole.

There are two main ways to do this:

  • Lowering income taxes, which will (all else equal) enhance incentives to work while discouraging car commuting at peak times
  • Distributing money equally to households, through lower uniform charges in the rates bill or AECT-style dividends.

The argument in favour of the first approach is that it will tax “bads” (i.e. excess congestion) while rewarding the “goods” (i.e. working). The second approach doesn’t improve incentives to work – people would get the money regardless of whether they are working or not – but it would ensure that every household had an additional chunk of money that they could choose to save, spend, or use to offset the cost of tolls.

5. We should liberalise residential and business zoning rules alongside implementing congestion pricing.

Separate from what to do with the revenues, another view is that it would be necessary to change our approach to land use planning in order to get the best result from congestion pricing.

The argument in favour of this view is that congestion pricing would influence people’s decisions about where to live and work. In other words, some people may choose to move closer to work to avoid paying tolls, while others would prefer to move further out of town to take advantage of faster drive times. However, zoning rules that, for example, held up intensification around employment centres may prevent this from happening.

6. We don’t need congestion pricing in the first place.

Finally, some people argue that congestion pricing is unnecessary. There seem to be two main reasons why someone may hold this view:

  • Contrary to popular perceptions, Auckland’s not really congested enough to need congestion pricing
  • If we just got on and built a lot of roads, like, immediately, traffic would flow smoothly and there would never be any congestion ever again.

The first reason seems to have at least some evidence supporting it, but the second evinces an insane disregard for basic economics (induced demand), financial realities, and the laws of geometry.

Leave your views in the comments, or answer the following poll:

What are the preconditions for congestion pricing in Auckland?

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    1. They need to use the revenue to increase public transport coverage, the bus hubs are a good start but there needs to be more rail. The current plan assumes that everyone works in the CBD, when over 70% of Aucklands workers do not but all PT still goes there.

        1. Try coming from somewhere not near rail (or the northern bus way) going anywhere else (that is not on the same rail line) other than the CBD and then come back and tell us PT is not all about the CBD.

        2. The *current* PT network is focused on the city centre for historical reasons, but the *future* network is designed to cater for a wider variety of trip origins and destinations. That’s the philosophy behind the new bus network – allow people to travel between lots of places rather than simply serving radial corridors.

          Similarly, by enabling higher frequencies across all rail lines, the City Rail Link will make it easier to make trips that don’t start or end in the city centre – i.e. it’s easier to travel between Otahuhu and Manukau when there are more trains between those points.

          That being said, there will always be a role for services that run to the city centre, as it’s near the centre of the region and thus a natural place to enable transfers between PT services. For instance, if you’re travelling from Mt Wellington to Albany on PT, you’ll probably benefit more from frequent train and bus services that connect at Britomart than an infrequent or circuitous direct bus service.

        3. Peter how many more trains do you want between Otahuhu and Manukau there are currently 12tph Peak, 8tph inter peak and 6tph after peak (each way between Otahuhu and Puhinui) as there is only a handful of people that travel to or from Manukau itself the fact that half of those go there more than enough.

        4. That kinda underscores my point, though: even in the existing network, there’s quite a bit of service between non-city centre origins and destinations.

        5. Also Ted at the end of December 2015 Manukau was the 13th busiest station on the network and rising rapidly. Data beats reckons again.

          And of course the lavish service between Otahuhu and Puhinui is a function of our interlined system, not an attempt to meet any particular local demand.

          BTW we will have the last six month’s station data out soon.

        6. Patrick so the 13 busiest station, wow considering the number of small waste of stop stations that still exist on the network that doesn’t help your argument to support the handful of people that use the Manukau station. What is the average pax per train in and out of Manukau then? Manukau is a convenient end for the trains that is required from Papatoetoe to Britomart but not further south.

        7. I lived out of home for two years without a car, I can tell you all about the short comings of the system. The difference being that I am actually aware of the changes currently underway to resolve these historic issues.

        8. @Bigted – latest data was published here

          Looks like Manukau had 210,700 boardings and 221,700 alightings in 2015. If you divide that over 365 days (which is probably not quite accurate as I’m guessing they’ll be a weekday bias), but anyway at an even split just under 1,200 people either got on or off a train each day in Manukau in 2015. The Eastern Line patronage has grown by 28.3% over the last year, so you’ll have to do those maths.

        9. Bevan those figures are worse than my estimate thats a whooping 10.71 pax per train movement, by taking your daily pax figure and dividing it the average number of trains (392 in, 392 out, 784 divided by 7 days is 112 average) per day by you average number of pax.
          I think you will find the growth on the eastern line has nothing to do with Manukau and everything to do with the other 10 stops.

        10. Actually BigTed, it’s 15 passengers on average, on the last station on a line, which opened a few years ago, and was a building site until half way through 2015. If the 2016 growth matches 2015 at that station then it is 27 for each train, or half a busload per trip, every trip, all year. Remember as well that this station is primarily about enabling development in the Manukau Centre so none of the development that is likely to drive it’s patronage has actually happened yet.

        11. Sailor Boy the current figures are 30 pax per train movement Monday to Friday, 13 on Saturdays and 10 on Sundays do you know what it cost just in staffing to cater for this handful of people before you even look at the cost for the infrastructure.

        12. Given that literally all of the staff are also running the entire rest of the line, I have assumed conservatively 4 staff per train 45 minutes per run and $60 actual cost (inc overheads) per staff, so it works out to $3.7m per year, or less than $2 per passenger trip.

        13. Sailor Boy Manukau is a full time staffed station that is fully gated so before you even take a look at the train crews wages you need to start with the cost of staff manning the station.

        14. So you want marginal cost of Manukau patronage?

          Given that the trains are at Puhinui already the marginal cost is only extending the trip to Manukau (conservatively 3 minutes) or 1/15 of the trains’ line staffing = $250k

          Assuming (conservatively) four staff at all times at the station (6am to 12am) again at $60 is $1.55m.

          That’s 1.8m/annum in staffing, or $4.30 per passenger.

          For a station that is brand new, and was under construction for a good part of the year we are taking data from, and is intended to drive growth. That’s a pretty good outcome to me. It will be fascinating to see how far that cost comes down with the new patronage figures. The station probably covers OPEX in fares with a doubling of passenger numbers which wouldn’t be out of the question this year.

  1. Firstly ensure any such introduction does not impact the poor. Or you will never get it across the line. Ensure alternative routes have sequenced signals, uniform lanes etc. Then seriously improve public transport, sort tollable roading infrastructure so traffic actually flows. You will struggle to sell the idea unless infrastructure exists that shows motorists there is value in paying the toll. To pay a toll, with no roading improvements just wont fly, regardless of this blog’s wishing it so. The government knows this and that is why lip service has been paid for so many years.

    1. Hi Ricardo

      Could you be more specific about how you would avoid adverse impacts on low-income households? To me, this implies that you should return revenues to households, probably in a lump-sum fashion.

      However, you *also* say that you would like to build more transport infrastructure. I don’t think you can simultaneously return the revenues to households *and* use them to build more roads etc, so how do you square these competing priorities?

      1. One approach would be progressive congestion charging (charge the rich more)
        However, even with a flat congestion tax, you could return all $$ to ratepayers with an income lower than x while retaining that from those greater than x, then using that to fund infrastructure.

  2. Comment removed for yet more tiresome moaning. Not agreeing with the content of a blog post is insufficient excuse to whine about the blog in general.

  3. I ticked 3 statements which I agreed with for my vote. I hope that is ok and that other people realise they are not limited to one choice.

  4. I agree we need to implement better PT contemporaneously with road pricing. In almost all cases this should be using the existing road network, which road pricing will make more efficient. Beyond that we can observe tolls on corridors as well as bus numbers etc to determine if more road space or LRT conversion. At the least we need to order a bunch of buses before hand, although having said that congestion pricing will also allow more efficient use of the existing bus fleet.

  5. I wouldn’t even talk about number 5 in advance. If you link pricing with upzoning then it will be dead in the water.

  6. Increases in CBD parking prices is making a difference. Lowering PT costs and increasing services will help, and really should go hand in hand with this.

    Still gobsmacked that the NW motorway upgrade has no continuous bus lane even after years of roadworks. That serves one part of Auckland that has no train line, so without the busway the choice is currently bike, bus, or car. Bus should clearly win on travel time during peak hour, but is the same or slower than a car.

  7. I was talking to a mate about this and he insisted that tolls are unfair because PT in Auckland is crap. For us from the the Hibiscus Coast that is very true. Give us rail to Orewa, then we can actually rely on PT on not use our cars! Tolls would be the least fair for us North of the bridge, even if I agree with principal one in theory

    1. Why would it be the least fair on people north of the bridge? Hibiscus coast would be no worse off than Pukekohe or Kumeu. The shore would be no worse off than the west.

      1. Because we don’t have trains, which are the fastest and most reliable form of transport, and clearly there aren’t any immediate plans for make PT on the Shore and Coast better. Although it will absolutely affect other parts of Auckland too like East and the fringes

        1. and probably more reliable as buses on the busway don’t end up stuck behind others when something happens or can be rerouted (in some places) off the busway and down local roads.

    2. Not sure why you mentioned rail. I presume what you mean is you want a reliable exclusive PT corridor. Well congestion charging wont deliver that on its own but it will have a similar effect by decongesting the roads allowing mixed traffic PT to be more reliable and faster. I would agree that a commitment to a more frequent bus service with longer hours is a valuable precondition.

      1. Once the buses leave the busway they are crap up here. I think buses as a form of Rapid Transit is a bit embarrassing. They are slow, unreliable and can not carry anywhere near the capacity needed to improve the horrific traffic on the Coast. Seriously it has significantly worsened up here due to significant growth but very little new PT infrastructure

        1. Yes buses in congested mixed traffic are not good. But my point is, congestion pricing will result in decongested roads and therefore higher and more reliable speeds (e.g. 80kph in the peak on the motorway). Regarding capacity what do you have to support that assertion? BRT, even single lane each way can move up to 6000 pax/hour. This is about 5 times the current patronage down Dom Road, aucklands busiest suburban arterial, and 2-4 times any of the existing rapid transit lines. I dont think there would be capacity issues for the Hibiscus coast with buses any time in the forseeable future.
          Not sure what you mean that buses as a form of rapid transit are embarrassing? I dont think embarrassment really comes into it. The northern busway usage is very comparable to the rail lines both in terms of absolute patronage and growth rates despite it stopping short of the CBD. So I dont think it makes any sense to say buses are embarrassing unless there is evidence that Hibiscus Coast residents are particularly prudish perhaps?

        2. But what happens to the trains in other parts of Auckland when they leave the rail corridor? Oh, right, they don’t. Not sure why you insist the busway is worse.

        3. I don’t understand this victim mentality from the north? Having lived there, the PT was far better than other parts of Auckland. Less crowded than the isthmus, really good corridor as spine of the network (which is faster and more frequent that the trains). All that is needed for a significant improvement on the coast is to extend the NEX to Silverdale town and make it 15 minutes or better 6am to 9pm.

        4. Sorry. I take back my comments. I has been a rough day and I was thinking clearly. I do think tolls will be helpful, but generally think sound PT should be available before it goes ahead; however this should not stop it from going forward altogether. The NEX service is much improved and is certainly good, but I still think improvements for the North would be useful

        5. Don’t take it personally Harrison. Sailor Boy has a habit of dismissing anything things that aren’t Light Rail or in the city because those in the North, out South are not worthy…

  8. Urban form and transport policy are joined at the hip. Transport policy is Land-use policy.

    ‘…An alternative road was not built – resulting in an increase in the number of people using mass transit which, in turn, made mass transit financially viable. Building more highways for cars, then introducing trains and buses in the hope that they will be financially viable, simply does not work (the greater Johannesburg region is learning that lesson now).

    China, meanwhile, has urbanised hundreds of millions of people over the past three decades. This has tended to be in high-rise, multi-storey buildings located in “superblocks” with wide, traffic-congested streets and few intersections per sq km. The result is relatively low densities in neighbourhoods with virtually no street or community life – in short, not the kind of urban area one would call liveable.

    Compare this with the neighbourhoods you find in Barcelona, where buildings are five to eight storeys high, located on narrow streets with pavements, trees and small piazzas for social engagement, and all well connected to both motorised and non-motorised forms of transport.

    This is what makes for liveable urban neighbourhoods. China has realised its mistake, adopting an urbanisation strategy that breaks away from sprawled-out superblocks in favour of a high-density neighbourhood approach, with narrower streets, a high number of intersections, and improved public transport.

    While the population of the world’s cities will likely double in size between now and 2050, rising oil prices and carbon constraints make urban sprawl increasingly untenable. Eradicating it in favour of liveable, accessible, multi-centred, high-density cities should become a shared global commitment.’

  9. The lesson from Jonas Eliasson’s excellent TED talk on the successful Stockholm Congestion Charging is that you let people work out for themselves what to do. Just like we don’t have governments organising who is supplying tomorrow’s bread, we don’t need to work out where people will go. Faced with even a small 1 or 2 Euro congestion charge, Stockholm congestion all but vanished overnight and no-one knows where it went. So we don’t need to have a Rolls Royce public transport first, we don’t need an absolutely complete and comprehensive off road cycle path network first, just do it! Put the congestion charge on first and use the funds to create the comprehensive off road cycle path network, to improve Public Transport etc. Just do it immediately.

    1. The great lesson from Stockholm was how they did it. Doing it as a strictly limited test for what, 6 months, a year? Removing it, then having a vote. The public went from 70% against when they had never experienced to 70% in favour once they had.

      All the catastrophists, change-o-phobes, and conventionalists were put out of business by this method.

      1. 7 month trial it was. Central Stockholm voted to keep it, all surrounding municipalities voted against. Public opinion has since shifted in favour. Source: summary of wikipedia article. No mention of polling prior to the trial.

  10. 1. Provide the public with the type of congestion pricing model eg UK Singapore or new.
    2. Provide evidence of how this will work in Auckland and whether congestion is removed.
    3. Cost benefit analysis.

  11. Not sure when congestion qualifies as being concentrated around peak hours, but I find this less and less the case in Auckland. During the PM peak, you can encounter a long queue on the motorway southbound towards the harbour bridge anywhere between 3:30 and 7 pm. Even with flexible hours it would be hard to avoid that entire time range.

    Thumbs up to mentioning walking. The thing I found the most striking about the North Shore is how deeply ingrained it is that you’re supposed to drive rather than walk. For example traffic light phasing, where stop lines are painted, the traffic priority rules, etc. I’d almost drive instead of walk just because walking is so awkward over here. And if you have good PT you still need to walk (or cycle — much worse) to the bus stop or station first.

    I always tried to find a place to live where you can at least do your daily errands without a car. It is possible, but those places are only a small minority at the moment. It would help if zoning would allow more dwellings in such places.

  12. I chose “return the revenue” and “liberalise zoning rules”.

    What I’d really *like* to happen is revenue invested in better public transport services, but I think returning the revenue to (former) car drivers would be a political necessity. Better to get the thing up and running, even if it isn’t perfect, rather than bicker about it for another 50 years.

    mfwic – “I wouldn’t even talk about number 5 in advance. If you link pricing with upzoning then it will be dead in the water.” I hadn’t thought about this. Is it a big problem? In which case, see my point above. Make it palatable and implemented first before tackling other issues.

    (I’m not sure if my vote went through. The form, in Google Chrome on desktop, doesn’t seem to be working properly for me)

  13. I don’t think improved PT is a requirement. Even with the 40c a km charge at peak PT works out to be more expensive in many places so that’s hardly a cheaper alternative. Obviously outside of peak the car would work out cheaper (for someone that drives already) and that’s the real option.

  14. There is the social equity argument which goes something like this: many lack access to quality public transport (fast, frequent, reliable) but would be unable to avoid paying the congestion charges or alternatives such as a levy on fuel. In other words we should build up PT before imposing tolls. So my suggestion is to have a 5-10 year plan to massively upgrade the PT system (requiring significant investment) on the clear understanding that congestion charges will definitely be introduced once we have a decent PT system in place. So where to get the required billions of dollars? My preference would be to use Auckland’s one-third share of the existing transport capital fund managed by NZTA (i.e. instead of spending most of our share on new motorways, we could have a ten year moratorium on new motorway projects and spend the freed-up capital on the RTN (new busways, additional rail lines, new & better interchanges). An alternative is debt funding (though Auckland is already close to its prudent borrowing limits) with the loans to be paid back from a portion of the congestion charges – i.e. income from the future charges would be used as security for present-day borrowing.

    1. But do we really need billions of dollars? One the major benefits of congestion pricing is it reduces the need for expensive new infrastructure. Once you have decongested roads, the ability to run surface street based quality and rapid transit goes up signficantly. So lets use those existing resources more efficiently before deciding we need to invest billions in yet more transportation infrastructure. I am not saying some investments wont be of value, but I think it is a mistake to ignore the road network as the biggest resource for PT we have and not focus on unlocking that.

    2. Aren’t we already in the middle of a ‘5-10 year plan to massively upgrade PT’: Electrification, CRL, New Network, Fare Integration, AMETI [ok that’s got stuck under a flyover], Double Deckers, Buslanes programme, Cycleways, expanded ferries…..?

      It certainly should be better: NW Busway, LRT I, even more bus lanes, AMETI now, SMART sooner, rail only Harbour crossing. Burt still I would agree that by early 2020s AKL will be completely different and actually workable outside of a car

  15. As it stands, congestion pricing would be a regressive tax. It shocks and appalls me to be agreeing with Riggles on something, but this will never get over the line if it just looks like another tax on working people who have to travel long distances to get to work. I can’t believe there isn’t an option on the check-list for “schemes to remove the burden from working families” – for example, requiring employers in the congestion zone to pay the tolls for employees.

    1. How do you assume it to be regressive? I would have thought long distance SOV peak hour commutes into or near the city centre are more likely to be made by above average rather than below average income earners. Low income earners are more likely to use public transport, not work in or near the CBD, not work at all or only part time, work irregular hours.

      1. Think about the cleaners at Sky City and/or any other inner city building
        -> Live in South Auckland
        -> No PT when they work (4-6am)

        1. No congestion charge when they start work either. Probably none when they finish if they are starting before 6am too.They can also avoid tolls by changing jobs, cycling to work, or moving house to allow themselves to walk/cycle.

        2. You realise what you are saying “change jobs if you don’t like it” is exactly the same argument used to justify anti-worker acts for centuries?

          As an aside, what’s your view on unionisation? Should workers unionise or just “find another job” if they don’t like it?

          Also, yes, it’s very easy to live close enough to the CBD to walk or cycle when you’re earning cleaners’ wages and have 5-6 kids. Super cheap

        3. No, I support unions because they empower workers against employers who have an inherent power advantage.

          I support congestion charging for the same reason that I support tobacco excise: smoking tobacco and driving in congested periods impart externalised costs on the rest of society. While implementation of either on their own is regressive, an overall implementation package need not be.

          For the enormous, enormous majority of people changing their travel habits is completely possible.

        4. Just a data-driven aside here, EC: According to Stats NZ data, the average period of employment (as of 2011) was around 18 months:

          Approximately one in seven workers left their job in any given three-month period in 2011. While some people obviously keep jobs for much longer, mobility between employers is a pretty big part of the NZ labour market already. So it’s hardly unreasonable to identify it as an option for responding to a change in travel costs.

        5. Interesting point Peter. As a counterpoint, using the latest LEED data, churn (accessions + separations) is at the lowest it’s been for over a decade. Which means greater job stability.
          Also is the 18 months mean or median? As we’ve seen before re: density, measurement methods matter.

        6. As Sailor Boy has already pointed (and so had I in my original post) shift workers starting and finishing off peak will benefit.

        7. Ok in this extreme example where a person can only take PT one way because they start or finish a shift early in the morning when PT isnt running, they will have to pay the toll if they want to use their own car. Even in that example it may well be cost neutral for them as they will be saving money on their off peak leg, and there will be a time saving.

        8. How is that an extreme example? Standard traditional shifts 0700-1500, 1500-2300, 2300-0700 with only the 0700-1500 shift have a viable PT option. There are many variations of shift work including the favorite of some employers with the 12 hour shift (easier to cover two shifts a day than to cover three, these start and finish mainly with the AM and PM peaks or near enough to penalize the workers. The morning peak starts before 0600 in most parts of Auckland and goes until well after 0900 and the PM peak starts around 1500 and goes til at least 1900, it starts earlier and goes later on Fridays.

      2. It is totally regressive – in effect it is a tax paid by those with few public transport options (who therefore need to drive) to the those fortunate enough to have many public transport choices. I don’t agree with the assertion that car drivers are wealthier, in fact I would argue that the reverse may be true.

        1. What’s your evidence for that statement? The last time I took a look at the data, higher-income households were much more likely to *own* cars. This doesn’t necessarily mean that they drove them more, of course, but there is a link between car ownership and car use.

          Almost 30% of households with less than $20,000 in annual income own zero cars.

        2. So 70% do than, of those that have work it is most likely to be part time or irregular hours and rely on that car to get to and from it.

        3. “It is totally regressive – in effect it is a tax paid by those with few public transport options (who therefore need to drive) to the those fortunate enough to have many public transport choices.”

          For the vast majority of people this is not the case. Most people have public transport options. Those that drive, consider driving to be preferable, not because it is an unmitigatable necessity. In order for it to be regressive the costs need to fall more on the poor than the wealthy. I put a large number of reasons down as to why I do not expect this to be the case. What evidence have you got to enable you to be so certain of your position?

          Also it is not a tax. A tax is something you pay which goes to the government for general use. You do not benefit directly by paying the tax (yes you benefit from the tax indirectly due to government services but you are not directly purchasing such services when paying tax). With road pricing you are paying to drive on a congestion free road in peak hour. The time saving benefits will be very high to a great number of people. Indeed, on net the vast majority of people who keep driving and pay the toll can be expected to benefit directly from congestion pricing. After all its all about time – time is the reason they are driving in the first place and not catching public transport.

        4. “Most people have public transport options. Those that drive, consider driving to be preferable, not because it is an unmitigatable necessity. In order for it to be regressive the costs need to fall more on the poor than the wealthy. I put a large number of reasons down as to why I do not expect this to be the case. What evidence have you got to enable you to be so certain of your position?”

          Fair enough Matthew, so I’ll have a crack at it. My position is that, in transit terms, poor means that you have few options and wealthy means that you have many. For example, if someone lives in Mt Eden and works in the CBD they are wealthy in transport terms, They can drive, cycle, walk, and have very frequent buses and trains. A congestion charge is appropriate here because there is a plethora of other options and there’s just no need to congest the road..But if someone lives in say Birkenhead and works in Henderson there is no realistic public transport option (unless you consider a 90-minute trip each way at about $25 a day to be an option). My stance is that to charge this second person for driving on the road, when they have no other choice, as well as having them subsidise the Mt Eden resident’s many public transport options, is unjust and regressive in nature.

        5. David it seems highly unlikely that there would be any congestion charge between Birkenhead and Henderson, probably at anytime, unless you chose to drive via the CMJ.

          The entire point and practice of this proposal is to toll congested places and times. Not Upper Harbour Dr and SH18, but Harbour Bridge and SH1 at the peaks.

        6. “My stance is that to charge this second person for driving on the road, when they have no other choice, as well as having them subsidise the Mt Eden resident’s many public transport options, is unjust and regressive in nature.”

          Then you should be opposed to our current system of transport funding, which:
          * Levies rates on all households to pay for transport infrastructure and services that do not necessarily benefit all residents equally
          * Levies fuel taxes that don’t differ by time or location to build roads and provide PT services – meaning that somebody driving on an uncongested road in the evening pays more in fuel taxes to fund roads used primarily by peak travellers.

          A key point of variable congestion pricing is that tolls would be considerably higher in some places and at some times than others. That could easily be a win for people commuting by cars at odd times or to low-density warehouse areas.

        7. As soon as you’re not commuting to Britomart, things get very hairy when trying PT. Getting from one side of the CBD to the other is a terrible chore. Do you know how long it takes a train to go from Newmarket to Britomart? And then you’d probably have another crawl on a bus on Fanshawe Street.

          Maybe after the CRL works and the new network settle down it will be better. But for now, the assumption that a lot of people can get to work on PT is wrong.

        8. David I agree that we shouldn’t have cross subsidisation of PT if we have road pricing. The whole justification goes out the window. But apart from that I see no reason not to charge the other guy for the costs they impose on everyone. Making people pay for the externalities they generate seems fair to me.

          On your wider description of what is regressive. With respect I think you are committing a fallacy of redefinition. Regressive taxation is about its effects on poor vs wealthy people not its effects on people who live in areas with and without good PT.

        9. “Maybe after the CRL works and the new network settle down it will be better. But for now, the assumption that a lot of people can get to work on PT is wrong.”

          It’s not wrong, it’s inconvenient not impossible.

        10. Regarding the PT costs from Birkenhead to Henderson, that will be about half of what you have said once integrated fares roll out. Which is supposed to be this month isn’t it?

    2. Requiring employers to pay congestion tolls would make them think a bit more closely about it, but the tolls would still be borne by workers in the form of lower wages. A good analogy would be employer Kiwisaver contributions. Every employment contract I’ve signed here states (in the fine print) that the employer will deduct those contributions from salary – i.e. if you earn $50,000, that’s *inclusive* of employer Kiwisaver contributions.

      I’d expect the same to happen with tolls. In fact, this might make matters worse for low-income workers, as tolls that are factored into employment contracts and wages can’t be avoided by carpooling or taking the bus.

      One way to minimise the financial burden on low-income households is to return the revenues from congestion pricing directly to households – i.e. a variant on option 4. For example, you could send every household an annual dividend from the scheme.

      1. Shift workers would likely be the big losers with these tolls, they will not have the public transport option for either early starts or late finishes but will be hit by a toll to get to or from work opposite to when PT is not available.

        1. You are forgetting the third, fourth and fifth choices, active modes, new job, new home.

        2. The scheme discussed above talks about peak travel time tolling so shift workers wouldn’t affected at all I would have thought?

        3. Shift workers travelling off peak will benefit as they will no longer be cross subsidizing peak time commuters.

        4. By definition shift workers will avoid peak time tolls. Time based pricing seems to be too hard for people to understand, which is why the Stockholm idea of trialling is so good.

        5. That depends on your shifts, like finishing at 8am or starting at 6pm you would defiantly be hit by the peak time tolls but would not have the PT option at the other end of your shift.

      2. That’s pretty rough to be honest and certainly not the intention of the Kiwisaver scheme. As an employer of 40 people I’d be ashamed to attempt to slip that in.

        IRD say this “If you’re a KiwiSaver member making contributions from your pay, your employer also has to put money in. This is equal to 3% of your pay.”

        But also this:

        “Through good faith bargaining, a salary package under an employment agreement can be negotiated whereby compulsory employer contributions can be offset against the employee’s gross pay.”

        How did the good faith bargaining go?

        1. It’s a nice illustration of the difference between the *intent* of policies and their *actual outcomes*. You can’t simply legislate that people will have more money – there is always an offset somewhere.

          I don’t mind to it as I’d be saving that money anyway, but I can see how it would be a challenge for some.

        2. Well if the legislation was clear on the point there wouldn’t be any problems with the outcomes. You certainly can’t contract yourself out of four weeks of holidays for example.

        3. If the legislation said that, employers would simply offer lower wages/salaries as an offset. That doesn’t mean that they would cut wages immediately, but they may limit wage increases for a few years to get things back in line. There is no free lunch here!

        4. The other option is to charge employers a withholding tax and then the government pays the employer contribution out of that. That way they don’t know which employees are on kiwisaver so that you actually get a bonus by contributing.

        5. Clearly at anything above minimum wage the employer can offer whatever they like and the employee can accept whatever they like.

          In Australia you are required by law to advertise a pay rate or salary exclusive of super, like in New Zealand you are required to advertise prices inclusive of GST. But don’t think that means they super isn’t factored into the package or the GST into the price.

          It’s academic whether you earn $50k including KiwiSaver or $48.5k plus KiwiSaver.

        6. I would include them but probably at a cheaper rate. It’s clear that motorcycles do add to congestion to some degree. It raises an interesting question of to what degree you have differential pricing on various vehicle types. Does an SUV pay twice as much as a SmartCar? Should a stretch limo pay three times as much as a hatchback?

      3. interesting Peter…. the last 4 contracts I’ve seen make no mention of Kiwisaver being deducted from total salary. In fact I’m pretty sure that is illegal! In reality what a lot of businesses are doing is reducing the salary by a couple of grand or on the sly negotiating a higher salary if someone doesn’t take Kiwisaver… I’m not sure where they would stand if that employee then decided to join Kiwisaver afterwards.
        If it became compulsory then that would change things I guess as nobody would be disadvantaged (although you can bet a lot of businesses will try to shaft their employees).

    3. In principle I agree its a regressive tax, but then again, if the lower income group are equally contributing to the problem (congestion), isn’t it only fair they pay the same? I also suspect that that group, as a whole, is less impacted if we assume the stereotype of trips in/out of the CBD each peak period is correct: rich = SOV, poor = PT.

      Its a tough one, I know. Its why, I think – and despite all the logical and coherent arguments in opposition – it is difficult to introduce congestion charging without a quality PT solution for people (not just the low income) to choose instead if they do not want to pay. That will come with primarily the roll-out of the new bus network and integrated ticketing. I think once the benefits of those are up and running (and what’s that – 1-2yrs?) then its all go.

  16. Let’s go back to first principles.

    The function of a transport network is to move people as effectively, efficiently, and safely (balancing the three together) as possible.
    What we need to consider is the effect of congestion tolls on the effectiveness and efficiency of movement; I think safety is a wash. If we are reducing congestion through pricing, but not providing an alternative via PT, we may end up with an “efficient” roading system – uncongested roads – but an inneffective transport system, as PT becomes more crowded (drivers have to go somewhere else), slower (due to more people getting on/off), and thus of lower utility (crowded, slow buses)

    So, surely the calculation is something like this:
    * Current time to drive from A to B = n
    * Current time to PT from A to B = y

    * Current total time = (car drivers x n)+(PT catchers x y) = z
    Then model the future congestion mix. If z is greater, then it’s actually suboptimal; keep adding PT until z drops. If you’re speeding up drivers through decongestion but slowing down PT users it’s a stupid decision

  17. Would be interested to hear peoples thoughts regarding motorcycles and congestion pricing? I feel like they should be exempt as they’re never actually in traffic holding anyone up but rather moving though the traffic. Full disclosure: I ride a motorbike as I’ve found it’s the fastest and cheapest way to commute across the bridge each day and the main reason I bought one was to avoid congestion, so be aware my opinion is heavily biased. I find myself in a interesting moral dilemma where I think congestion pricing would be beneficial but I don’t want to pay for it as I currently get most of the benefit (bad traffic adds about 5mins) by riding a motorcycle at zero additional cost. Thoughts?

    1. I don’t ride a motorbike but I would still have them exempted. That’s common overseas (at least in Asia) where they do not need to pay the tolls at the gates on the motorways

    2. You contribute to congestion in the borderline congested period and contribute to flow breakdown and bottlenecking though. Motorbikes add nothing to congetion after flow breakdown, but if you do congestion pricing right then that doesn’t occur.

    3. I’m in exactly the same boat as you so will be one of the few people who will not really benefit directly from congestion pricing. I think Sailor Boy is right though, motorbikes should be charged, perhaps at a discount as they produce less congestion around town, clearing intersections faster.

      My own selfish precondition for road pricing is the skypath. Im selling my motorbike and building an E-bike the day that opens.

  18. Congestion pricing is clearly likely to be beneficial. It seems certain that we also need more support for transit. multiple Key routes simply don’t have enough buses at peak times. My family developed a strong hatred of using the bus after being left waiting while a herd of full buses passed them by, year on year. Yes bus lanes are great and need to be extended. But that cannot explain lack of capacity.

    1. Well except that bus lanes mean the bus run is quicker, enabling the same number of buses to do more runs. However this also makes catching the bus more attractive, so pushes up demand. Therefore still requiring more buses. But then, quicker runs are more cost efficient and more paying customers also helps cover costs of the additional buses…. Soooooo; more uninterrupted bus lanes everywhere is indeed the answer to capacity problems -> solving your family’s experience of watching full buses go by.

      A more efficient PT system is better for everyone.

  19. OK, I think the two main preconditions for congestion pricing are:

    1 – Some evidence that people actually value de-congested traffic enough to pay for it. If most people would rather live with a bit of congestion to save a few bucks, congestion charging hurts them. Congestion charging offers a new choice – paying for uncongested driving – at the expense of another – cheaper congested driving. You keep the not-driving-at-all option either way.

    The obvious way to test this is to only introduce it once there’s public support for the idea – either with opinion polls or a referendum. This is fairly similar to the view in the post of 6. We don’t need congestion pricing in the first place, since congestion isn’t that bad, which is why I voted for “we don’t need it” in the poll.

    2 – The other big issue is privacy. GPS trackers in every car reporting back to some government data centre is pretty invasive and risky, even by our modern standards of PRISM and the like. I don’t know how to solve this, but it shouldn’t be impossible.

    If we are to do it, it should be revenue-neutral by cutting other taxes. We already spend far too much on transport, mostly pointless motorways. Just cut those out and then there’s already more than enough money for those PT improvements we actually need.

    1. Stephen, to your point 2 above. I would imagine if they created a special agency to deal with this that was deliberately kept out of the loop with NZTA/Police/IRD etc to protect privacy then that wouldn’t be an issue.

      1. I don’t think there are any taxes to cut. Its an Auckland charge. Unless you are going to reduce rates, then there is no other Auckland tax – let alone one you can link to transport spend – to offset against.

        I think its easier just to say its going into a pot to spend on PT improvements to further get people out of their cars and avoid the tax altogether. Two (?) mayoral elections and countless polls have indicated PT as one of the main issues Aucklanders want resolved. I actually think they would welcome that approach. Those that don’t and want/have to remain in the car will benefit from less drivers on the road or shift their travel patterns.

    2. If 1 ends up that no one cares about congestion, then let’s stop investing in transportation right. All of our transport investments a predicated on a value of time for people and goods. If this doesn’t exist then it doesn’t just affect congestion pricing it affects everything else as well. But there has been plenty of research into this and my understanding is people do in fact value their time.

  20. General rant! I enjoy this blog and I learn a lot (although much of the technical detail passes me by).

    But an overwhelming impression I get from it is how privileged the authors and most of the commentators are and how narrow your life experiences must be. And yet many of you seem so unaware of this.

    Congestion charging is regressive and it will hit the poorest hardest. The poor are hit two ways (1) they have less disposable income with which to afford the fees and (2) they have fewer life choices so will find it harder to avoid them.

    Everyone who says people can vary their hours of work, their route, take public transport, change their jobs or shift houses has no idea how some people are stuck in dead end poverty traps lives. How some people just don’t have choices – they take what work they can get and what hours they are given.

    Dismissing concerns with stats like – lots of people earning under $20k don’t own cars OR the average time spent in a job is 18 months therefore kiwis have a culture of job change – just reflect your own privilege and refusal to think outside your own experience. (Hints: averages conceal huge variations in experience; also, people “leave” jobs sometimes because they are made redundant or their 90 day trial ends not because they choose to and they accept whatever new job they can find because finding work can be tough – it’s not about “choice” or change for the better.)

    How often does this blog interview disabled rights activists about transport and urban planning? Or seek the views of someone who understands the daily lives of the poor? And then integrate some of that knowledge into your mainstream posts?

    At the very least, how about not dismissing the concerns of commentators who raise equity issues just because you don’t experience these things in your own lives.

      1. I’m not a transport or urban planning specialist; but for any policy to be fair, it has to consider distributional issues at the start, not pretend they don’t exist, or tack something on later. I come here to learn stuff. I really don’t have much to contribute. I just wish the authors would acknowledge the uneven distributional impacts of some of the things they propose and take them seriously.

      2. There could be acknowledgment that there needs to be a proper integrated system and that will include roads/motorways. Buses have their place in PT but buses require roads. To believe that everyone will take PT just because you want them to is in itself more short sighted than the transport and town planers of Aucklands past. Too many people on here take what AT say as gospel when some of us know they only tell you stuff that suits their agenda but take a closer look at the data and you get very different results to what they have told you.

        There is also a group that post here that w*nk themselves so hard over light rail and give so much misleading information in the comparison between HR and LR that they must have some interest in a company that supplies LR.

        1. You know that the blog accepts posts by guest authors in which you could attempt to point out a single way in which AT are caressing the figures on LR vs HR rather than simply insulting people like me or Patrick for making a rational decision based on available information, and a healthy (but not excessive) sense of scepticism, right?

    1. Hi Me Too

      Glad you’re enjoying the blog, and thanks for coming by and commenting.

      A few unstructured responses:

      1. The blog is written by volunteers in their spare time, and we’re always looking for guest posts or new perspectives. If you feel like we’re missing something, please contact the editors and propose a guest post on the topic.

      2. Part of the reason why I prefer to talk about statistics rather than my own personal experiences is that they *do* provide a window into how others live. I hope you can agree that relying on data is better than simply extrapolating from what’s happened to me lately and assuming everyone else is similar.

      3. Finally, if you’d like people to hear your perspective, perhaps don’t start by lecturing them on how privileged they are and how “narrow” their experiences are. If you want to be heard, it’s not good form to begin by delegitimising the views of others.

      1. Thanks for replying. I know you’re all volunteers doing this after you finish your day jobs, and those day jobs are what give your blogging expertise. And I know this blog has been influential and so deserves thanks.

        Although reading the comments on this post prompted me to write my comment was a general one not aimed at you specifically – it’s an observation I’ve had for a long while about the place in general. The blog frequently deals with changing people’s behaviours and how they live their lives but the distributional impacts are rarely part of these discussions and never (?) central to them. The impacts of these changes do not fall evenly and some people are better placed to adapt to change than others.

        1. “The blog frequently deals with changing people’s behaviours”.

          Really? My impression is the blog offers solutions and ideas that reflect peoples behaviours that are changing all on their own, but for which local and central government haven’t caught up (or won’t) with. Increasing demand and stated preference for PT spend, for example.

          Other than that, my impression is that the bog promotes choice. Intensification, as an example. That isn’t changing anyone’s behavior – they are not advocating forcing people into them. Just that they be a solution to the housing problem and an option for those who want it.

          Of course, I accept congestion charging would change behavours. But besides being the exception rather than the rule for the blog, this was an idea put forward by local and central government. The blog and its contributors are just providing their opinion.

  21. “Congestion charging *on it’s own* is regressive”, maybe

    But a citation is seriously needed. For all we know wealthier people are driving further, in the peak hour, on congested routes. Abolishing say petrol tax to implement congestion charging, or using the charge to provide a cash stipend to all residents may be progressive for all we know.

  22. I’m no fancy economist or anything but usually when people talk about regressive taxes they mean flat taxes or charges which form a disproportionately high % of lower incomes. If I’m on a higher income paying four bucks each time I go through a charge point is small change. If I’m on a tight budget where every penny is accounted for, it has a massive impact.

    I don’t believe this logic needs a citation: the poor can less afford extra charges than the rich can.

    1. An excise tax on cigars and champagne wouldn’t be regressive for obvious reasons. Taxing rental income is not regressive for the same reasons. You need to prove that low income earners would actually pay this tax to prove that it is regressive.

      ‘m not saying that it necessarily isn’t. But no one has produced evidence that it is.

      1. Surely any negative impact also has to be offset by the positives.

        De-congested roads for those still paying the tax leads to less time in traffic, more time with family and less money on the petrol tank (perhaps).

        And as harsh as it sounds, if the rich and poor are equally contributing to a cost (the impact of congestion) then shouldn’t they be bearing the “tax” equally? (at least in nominal terms). For what its worth, I am OK with some form of rebate back to low income households, but its a legitimate question, regardless.

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