Wednesday, October 29, 2014

Tolling Auckland motorways

I know a bit about road pricing.

So I've been following the debates about tolling Auckland roads for many years, and so given the latest stories it's time for some very clear thinking about the proposals being floated by "independent advisors" to the Mayor of Auckland, because it's very easy to give a kneejerk reaction to the idea.

So here's the quick and dirty summary of what it is all about:

  • Len Brown wants to spend a lot of money on (mostly public) transport projects that will lose money.  He doesn't have the money to do it.  His usual way of raising money is from ratepayers, and ratepayers don't want to pay for it.  
  • The projects he proposes will never generate enough money from fares to pay for the cost of operating the trains and buses, let alone pay for the capital costs of building the infrastructure. They will lose money, because Len knows that if he confronted users with those costs, they wouldn't use the services.
  • Central government isn't keen to spend national taxpayers' money on these services for the same reason, and because the net economic benefits are at best heroically optimistic.   At worst it is a transfer from taxpayers to a tiny fraction of Auckland commuters (and a few property owners who will gain increased value).
So Len has some pet projects he can't convince the users to pay for, or Auckland ratepayers to pay for, so he wants to tax road users to pay for them.

Now local authorities are permitted to toll any new road capacity they build, under certain conditions and with central government approval.  The key element being that it is new capacity, and the money raised is used to pay for the road improvements.  That's not what Len wants to do, he isn't interested in the approach of Oslo, Stockholm or Sydney, in charging road users to pay for improved roads.  He wants to charge them for improved railways.

The problem is that road users already pay to use the roads.  The roads he wants to toll, aren't his. The motorways are state highways paid for by central government, and fully funded by taxes on the use of roads.  All fuel tax, all road user charges and motor vehicle registration/licensing fees go into the National Land Transport Fund, and fully fund state highways.  Those taxes are enough to keep the motorways maintained and to fund expansion and improvements around Auckland.  They also pay half the cost of the roads Auckland Council does control (the rest comes from rates).

So Len wants Auckland motorists to pay more to use roads that aren't his responsibility, so that he can build some grand projects that will lose Auckland ratepayers money (he'd like the motorists to pay for those losses too) and wont generate net economic wealth.

Arguments that the motorists will benefit are grossly exaggerated, since very few motorists will switch from driving to using these services and Auckland Council has long given up claiming it will clear the roads - it wont, it doesn't.

The funny thing is that charging motorists directly would make sense, to reduce congestion simply by applying market pricing.  At peak times scarce road capacity should cost more, because demand exceeds supply.   If priced efficiently, traffic congestion would largely be avoided, and enough money might be raised to build more capacity.   Conversely, during off peak times it would be much much cheaper, as there is ample unused capacity and it makes sense to encourage greater use at those times to generate revenue.

That could be achieved by replacing the current flat fuel tax and RUC system with a pricing system, that would reflect demand and supply.   If the motorways were run like a business, that could happen.

Cheaper motoring off peak, less congestion at the peaks, buses could flow more freely at peak times and could expand services to meet demand from those who find driving too expensive.  More mobility, less emissions and yes more public transport, though not the kind some planners embrace, but the kind driven by what users want.

However, it wouldn't include Len's train set, and so he wont embrace that sort of solution for Auckland.

The government should tell Len quite simply no - he can't toll the motorways that are not his, to pay for his pet projects.  He might consider instead running his own roads more like a business, and lobby government to do the same for its roads, even selling the Auckland Harbour Bridge as a test case.

but I bet he wont...

Friday, October 03, 2014

NZ election 2014 post-mortem

Every election that comes about inevitably has some hacks saying it is “interesting”, “historic” etc, which of course they always are.  Elections always change governments in some way, even if not the ruling party. Psephologists (an area that I am often tempted to drop into) are keen to dissect some greater meaning from a vast range of individual decisions made at the ballot box or to not go to the ballot box, and political parties are even more keen to use that data to inform their future utterings of rhetoric, promises and contortions of fact.

The 2014 New Zealand General Election is, though, a bit more than all that.  For it needs to be seen in the context not only of 20 years of MMP politics, and an vigorous level of campaigning by opposition parties, that saw many pundits thinking the election would be close, either due to wishful thinking on their part, or because governments seeking a third term usually only scrape through (see 2005, 1996, 1981). 

In the height of economic recession, a majority of voters chose to change the electoral system, thanks to sustained campaigning by a coalition on the left, poorly focused counter-campaigning by those on the right (remember Janet Shirtcliffe?) and the feeling by a significant number of voters that they had had enough of radical reforms they neither understood nor felt were helping them.  Bear in mind in that same election in 1993, National won by one seat, with 33% of the vote.  First Past the Post meant that opposition votes were split between Labour, the Alliance and NZ First.

Today, opposition votes are also split between Labour, the Greens (which have succeeded the Alliance as the far-left faction in Parliament) and NZ First, but National has won an election in its own right, with the system many on the left thought would deliver them sustained so-called “progressive” majorities of Labour supported by a leftwing partner, and perhaps a centrist party maintaining a balance.  Not now.  Despite a campaign whereby the left DID campaign on a lot of policy, and dishing up a fair bit of dirt, a majority of New Zealand voters weren’t swayed.   National getting its best ever result since 1951 and Labour its worst since 1922 speaks volumes not of the split on the left (which has not grown, as the Greens are sustaining fairly consistent levels of support), but on a series of factors that should result in some introspection, particularly from the left...

Forgotten Posts from 2009 : Conservative Party ignoring its core?

Simon Heffer has written in the Daily Telegraph "Why is it deemed politically acceptable for Labour to suck up to and bribe its core vote, but not for the Conservative Party to do the same to its own?"

He doesn't mean bribe, he means demonstrate that productive, aspiring, entrepreneurial people matter.

Except, of course, in the counting of heads, called elections, they don't. What matters is attracting the masses bribed by middle class welfare in the form of child benefits, the large bulk of middle income people who are beloved of the NHS, because they have been told that the only alternative is the bogeyman of the US health system, and that only the government can make sure their kids get a good education.

"Caring" in the form of "we'll spend other people's money" is the order of the day, and many are convinced that the state should spend their money how they want it - and it is Labour that is far more adept at convincing voters that it can do that.  That's because Labour is philosophically committed to a larger state.  The Conservatives are, far too often, philosophically terrified of arguing that people should keep more of their own money.

Friday, September 26, 2014

Forgotten Posts from 2009 : Brown and Darling show what's wrong with democracy

Labour was been in power in the UK for 12 years. For most of that time, the UK economy has grown steadily, to the envy of some its poorer performing continental neighbours. During that time the public sector proportion of GDP has gone from 38.8% to 42%. Almost without exception every year there has been a budget deficit. As Chancellor of the Exchequer and subsequently Prime Minister, health spending has gone up by 66% as a percentage of GDP, doubling in real terms, yet the outcomes are barely an improvement. The economy of some parts of the UK, such as Scotland, is more dependent on the state sector than Hungary was in the latter days of communism.

So the last act, having ridden on a wave of asset price inflation, encouraging massive credit bubbles and then seeing them pop, has been to spend - spend - spend.  To ignore the collapse in tax revenue and the budget deficits since 2001, and to leave a legacy of overspending that the next government will have to face, and then be criticised for being "cruel" because inevitably it will cut spending on welfare, local government and other areas of social spending.

People vote time and time again for governments that spend money borrowed from future voters, and then when confronted with the true costs of those decisions, they will bite back.  What chance the next Conservative government will be a one term government because Labour's client welfare recipients and public servants will bite back.

Friday, September 19, 2014

Scotland votes No

It might have been fear about money.

It might have been dislike for Alex Salmond.

but Scotland voted to remain in the UK.

and so nationalists and socialists in Scotland, and those wanting to kneecap the UK worldwide will weep.

I'm having sparking wine in the Air NZ Koru Club in Auckland Airport....

but it isn't over, since the three main Westminster parties promised substantially greater devolution to Scotland as a last minute bribe.  That means the West Lothian question - the issue that Scottish MPs elected to the House of Commons get to vote on matters that do not affect Scotland - is unresolved.

That is now front and centre.

2014 New Zealand voting guide for lovers of liberty

1. Is there a positive candidate to endorse?
2. Is there a likely winner worthy of tactically voting to eject because he or she is so odious??
3. Is there a tolerable "least worst" candidate?

So I list by electorate, the status of the electorate and who I am endorsing, then if you care, an explanation why.  Just search for the name unless you want to have a very long read...  and of course I am happy to see contrary views expressed.  I am updating this as I am on a series of flights in the next couple of days, and it is dependent on the gap between flights, wifi access and access to laptop power...

2014 New Zealand voting guide for lovers of liberty complete

1. Is there a positive candidate to endorse?
2. Is there a likely winner worthy of tactically voting to eject because he or she is so odious??
3. Is there a tolerable "least worst" candidate?

So I list by electorate, the status of the electorate and who I am endorsing, then if you care, an explanation why.  Just search for the name unless you want to have a very long read...  and of course I am happy to see contrary views expressed.  I am updating this as I am on a series of flights in the next couple of days, and it is dependent on the gap between flights, wifi access and access to laptop power...

Thursday, September 18, 2014

Why Scotland should vote No

Today is the day that most of the Scottish electorate get to decide whether they want Scotland to break away from the UK and be an independent country.  

Well independent notwithstanding the passionate desire by its First Minister to tie it to the Pound Sterling, meaning that its monetary policy and by default fiscal policy (as it will affect public borrowing) will be driven by the Bank of England.  

Now that isn't a bad thing in itself, for if Scotland were to be truly independent, you can imagine the Scottish Pound being worth much less than the already devalued Pound Sterling, primarily because virtually all of the advocates for independence are socialists, committed primarily not to the earning of wealth, but the taking of it and "redistributing it" to those they deem worthy.   Such a vision isn't one that inspires confidence in money created out of nothing.

Furthermore, "independent" Scotland aspires to be a member of the EU, as it will lose EU membership the day it breaks away from it, and seeks to be a member so it can "earn" its cut of subsidies etc, although curiously the "Yes" campaign seems to think Scotland could be like Norway - except, of course, Norway has its own relatively solid currency and is not a member of the EU, because it doesn't want to share its wealth with Bulgaria or Greece, or its fisheries with anyone else.

"Independent" Scotland of course is happy to share its fisheries with the subsidised fleets of the rest of the EU.

"Independent" Scotland will still have the Windsors as head of state.

All of that is just political posturing by a campaign led by a megalomaniacal habitual liar.

There are solid reasons to not vote for independence, but there are also arguments in favour of the union.