Wednesday, April 12, 2006

Transmission Gully needs more subsidies

That's right folks - not only was the Hearing's Committee (reported as if it was Godlike) wrong about there being enough money for this billion dollar boondoggle, not only does it have a benefit/cost ratio of less than 1.0 (meaning it produces less benefits that costs), not only does a toll only recover around 15% of the cost of the road (which means if the toll was high enough to pay for it, nobody would use it - showing how little users really want it), not only does Porirua City Council and Kapiti Coast District Council oppose rating the main beneficiaries of the road to pay for it, BUT
apparently (I say apparently because I don't trust the Dom Post much on these, since they got it wrong several times before as I described here and here) Dr Cullen has suggested a regional petrol tax to help pay for it.
This is a fundamentally flawed proposal, despite David Farrar's socialist faith in this think big project, for several reasons:
1. A regional petrol tax means ALL motorists from Masterton and Otaki to Miramar and Island Bay pay for a road that only SOME use. Wairarapa residents might ask why people in Levin don't have to pay, whereas more of them will use it than Wairarapa people.
2. A regional petrol tax means motorists that fill up north of Otaki or in the South Island don't pay to use the road as much as a grandmother driving in Island Bay to the shops.
3. A regional petrol tax means all trucks, buses and diesel and LPG cars don't contribute, since it doesn't apply to road user charges or LPG (and don't even try to apply it to them - RUC is often bought centrally by fleet operators and there is no way of knowing where kilometres bought in advance are being used, and 80% of LPG tax is refunded for non-road users - try having a regional tax on a tax that is mostly refunded)
4. There is no regional petrol tax at present, the last one, introduced by the 1990-1996 National Government was abolished because the oil companies found it administratively simpler to apply to ALL petrol sales nationwide, and hand the Auckland and Wellington Regional Councils the estimated revenue (so motorists in Invercargill paid a tax that was largely meant to apply to only Auckland and Wellington). The only way to change that would be a complicated administration system to account for petrol delivered within regional boundaries, and that means service stations close to boundaries either win or lose.
Now, the DomPost failed to report that the Wellington Regional Land Transport Committee has voted in favour of Transmission Gully - but, and it is a big but - there are still several hurdles left.
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Transit's board has to agree to the appropriate approach, and may decide against Transmission Gully, or decide in favour, or decide in favour, but in the meantime cannot neglect the current route (which it can't). I think it will do the latter - retain its commitment to Transmission Gully as the long term solution, but apply for fundable economic projects on the current route. The median barrier along the coast is one, an interchange at Paekakariki is another - Pukerua Bay Bypass perhaps another. Even then, Land Transport New Zealand needs to approve funding - Transit doesn't do this - something that politicians that helped set up this system (Peter Dunne and Maurice Williamson) tend to ignore in the rhetoric and which most journalists can't be arsed thinking about (they only report anyway).
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The simple point is - the money for Transmission Gully is not there - it does not stack up as a project of anything other than low national priority because it has bad economics, and the users are unwilling to pay, even the councils cheerleading it wont raise a dollar of their ratepayers' money to pay for it (meaning they wont risk their political lives on the issue - there is no risk in demanding others pay).
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So why should you be forced to pay for a road that you aren't going to use or benefit from? and if you are going to use it or benefit from it, then why wont you agree to pay more towards it? Agree to pay the $24 toll that would be required, or go tell the grandmother driving in Island Bay to the shops why she should pay more in petrol so you can go on holiday to Taupo 10 minutes faster?
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You might ask why supposed supporters of the free market like ACT and National, think this is ok. Even Maurice Williamson, who as Minister proudly refused to get involved in decisions on particular projects, because he believed projects should be decided on their merits by people able to weigh them all up objectively is now reported as guaranteeing the Penlink project in Rodney District will get funding approval if National is elected. Roll out the pork barrels.

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