Is the NZ$11.7 billion "funding gap" real and justified?
He simply parrots the simple line that Auckland "needs more public transport " and the myth of "building the passenger transport options that might well help unclog the roads without the need to build more". Might well? Where in the new world have major rail projects actually unclogged roads? What city has accomplished this successfully? It's a simple belief system - it is one the Greens share - but it is just that, a belief. The bare fact is that no new world city has significantly reduced traffic congestion from construction of a new rail link - none. Advocates may argue that congestion would be worse without them, but that's just hypothesis, and it isn't based on any significant difference in mode share from car driver to rail after a line has been opened.
Of the remaining 12% around, 42% of motorised commutes to the CBD in Auckland are by car - yes a majority go by public transport now. You might ask why that is a problem.
If there is a gap, how should it be funded?
The solutions be posits are to both spend existing funds differently and raise new taxes from motorists.
For new money, he supported the regional fuel tax Labour tried to introduce, but which the National government scrapped. This was a stupid idea, and tends to be embraced only by those with a paucity of understanding of such taxes and their role in New Zealand.
For a start, regional fuel taxes in the past have been opposed by oil companies because of the administrative cost in applying differential taxes for a commodity distributed nationally. Service stations near the boundaries of Auckland (which most people wont be aware of) would be winners or losers for fairly obvious reasons if applied regionally. National tried regional fuel tax in the early 1990s and had to abandon it because oil companies calculated the revenue that should have been collected based on consumption in the regions, but applied the tax nationally to save on the administrative costs and boundary effects. Regional fuel tax for Auckland risks being applied nationally again, unless government applies stiff enforcement procedures to stop oil companies repeating this - which adds another cost. Something Brian curiously ignores given his pleading on the cost of operating tolls.
Secondly, he ignores the effect on diesel. There is currently no fuel duty on diesel, because diesel powered vehicles are liable for road user charges (RUC), paying in advance for distance travelled on roads based (shortly) on maximum vehicle weight. There are various reasons for that, but what it means is that RUC, in its current form, cannot be applied regionally because diesel vehicles have distance bought before they travel regardless of where the roads are. So regional RUC wont work for now, without a significant change in technology. Regional diesel tax would mean the 36% of diesel usage off road would have to have a refund scheme (as applies to petrol tax), which imposes an administrative cost on the agriculture, industrial and fisheries sector to which this largely applies - unless Brian thinks that off road users of fuel in Auckland should pay for Auckland transport, in which case he is arguing to get rid of refunds for off road use of petrol and LPG as well (and why only abolish refunds in Auckland). He simply wont be aware of these implications of imposing new costs outside the transport sector.
Should Auckland roads have direct tolls/road pricing?
Most of Brian's latest comment is a diatribe against road pricing. That puts him firmly in a camp I describe as populist left-wing opposition to tolling - he shares this with NZ First.
I am, in principle, in favour of road pricing as a replacement for taxation of motorists, because it creates a direct relationship between the road user and road provider, sidestepping the interfering influence of politicians seeking to spend motoring taxes on pet projects. However, from an economist's point of view, it enables the price instrument to be applied to roads. That alone means road users can be charged directly for the costs of the roads they use, accordingly to the proportion of usage, according to the wear and tear they impose on the roads, and according to the vagaries of demand and supply. Congested roads would cost more, managing demand, but generating revenue that might be enough to remove bottlenecks and build new capacity, or may simply mean off peak charges are lessened to spread demand. It is this lack of the pricing instrument, which affects both demand for road use, and the funds to supply roads, that is the biggest single factor in facilitating traffic congestion, and the negative externalities from that in the form of wasted fuel and increased pollution. Even when applied bluntly, the effects of pricing on congestion have been seen clearly in Singapore, Oslo, Stockholm and London.
It would appear Rudman is almost oblivious to this, or at best dismissive of it.
He claims tolling is "not fair", because he doesn't believe Aucklanders should pay more for their roads and public transport than other New Zealanders. Rather odd that, if Aucklanders actually wanted more roads and public transport than other New Zealanders, they shouldn't pay. Who should pay? Aucklanders pay more for land and property now, does he suggest people living in Oamaru pay a land tax to equalise it, or should Auckland land be subsidised? However, this is a man advocating a REGIONAL fuel tax, which would mean Aucklanders would pay more. He can't make his mind up. It is a specious "argument" worthy of a drunken talkback caller. Aucklanders should pay for the transport they want, maybe if they did, they may want less of it (and nothing could be "greener" than that).
He repeats the claim by Chairman of Auckland Council's business advisory panel Cameron Brewer that "tolling is a flat tax that hit the poor the hardest". Yet I have never seen Brian advocate that poor motorists get a discount on their petrol tax (the equivalent to a toll now), or discounted train fares, or discounted phone line rentals. Why is a user charge for one service a "tax" when it doesn't apply to others? Again, a specious argument. Even though Brewer's sensible suggestion that "it be levied at a reduced rate for service sector shift workers in off-peak times" has economic merit in that tolls should be lower at times of low demand. Brian's regional fuel tax, which would be paid most by those in least fuel efficient (i.e. old) vehicles on slow lengthy trips would be paid more by them, but he blanks out even considering that.
His next claim is that tolling targets private motorists, whereas commercial road users and councillors (cue NZ First type rhetoric here) can pass it on. Well what would a regional fuel tax do Brian?
However, moving beyond this rather facile rhetoric, his big opposition to tolls appears to be because the collection costs are higher than fuel tax. Now I've already fisked him on fuel tax given that the regional fuel tax would cost more than he thinks, and so would mean costs for administration by both government and oil companies, and for those off-road users of diesel facing a new refund regime. However, he does use both the Northern Gateway toll road and the earlier Auckland Road Pricing Evaluation Study work to back up his claim that, yes indeed, having a direct customer relationship with users one by one and being accountable to them is more expensive than a tax. However, as I have written before, the costs now claimed are for a government specified bespoke system that is far more expensive than it should be. Work I've done elsewhere indicates the costs of collection can be much much less if you have the volume to sustain it and outsource much of it effectively, like utility companies do. So this argument is less worthy that it appears on the face of it.
Yet the real benefit of tolls, compared to taxes, is that they can charge according to costs and demand. The benefits to Auckland of road users paying tolls to use roads, compared to more taxes, is that they could be charged more for roads close to capacity and could be charged less for roads at off peak times. This can spread demand, encourage use of other modes at peak times, and cause people to think again about whether it is worth using that rather expensive piece of infrastructure when it is highly priced. Yes for "revenue" alone it isn't clever, but if that was the only measure, then electricity would be free and everyone would have paid for it through their taxes, so would phone calls etc. The effect on use of electricity if it was paid for through your rates or income taxes would be dramatic.
To be fair to him, he is right in quoting the Auckland Road Pricing Evaluation Study work in opposing tolls on the motorways only. I don't believe this can be justified in Auckland today, but I do believe that a shift from rates and fuel tax based funding of roads to tolls is justified. The issue is how that is done (privatising Auckland Harbour Bridge might offer a clue).
If Auckland did have largely privately owned roads, charging usage on various basis (e.g. tolls, distance charging, property access charges), it would transform transport in Auckland, particularly by eliminating rates funding of roads (cutting your rates by 10-15%) and fuel taxes (cutting fuel prices by 20%). It would mean users of main roads at off peak times would probably pay less, whilst at peak times they would pay more. It would mean buses wouldn't need bus lanes in most locations, except where bus companies were willing to pay for special access. Truck operators would probably change times of travel. Short car trips would be more likely to be replaced with walking and cycle trips. The legacy railway might even have a financially sustainable life, somewhere where it parallels road corridors too expensive to expand (or it gets taken over by them).
Quite simply, it is Rudman who doesn't have a transformational state of mind. He, and the Greens, are trapped in tired old solutions implemented en-masse in the United States in the 1970s and 1980s that have failed - in the form of new government provided rail transit systems. He ignores road pricing, like it was ignored then (except at least then, technology was a bigger limiting factor than it is today). He swallows the hackneyed and overused line that "building more roads leads to more traffic" (given Auckland has had a lot of new roads lately but no more traffic, he has failed to join the analytical dots). He wants taxpayers to spend a lot of money for what are pet schemes, whilst he resists economics and employs contradictory arguments.
Auckland's transport could be transformed, with technology, pricing instruments and a more commercial and market oriented approach to the provision of infrastructure and services. Cities from London to Stockholm to Singapore to Tehran even, have had success in better pricing of roads to reduce congestion, yes reduce. New technologies in San Francisco and Los Angeles are offering real time information on parking availability with the scope for dynamic pricing of parking. Bus rapid transit has demonstrated enormous success in Auckland in limited form as it is, and has also been a success in cities in the US, Brazil, Germany and Australia.
It is overwhelmingly clear that the advocacy of rail in Auckland is not about transport policy outcomes, but a broader agenda that is about intensification of the Auckland CBD, moving more Aucklanders into high and medium density housing, for environmental policy reasons, and because of a warm fuzzy feeling that electric trains are just great, but cars and roads are just wrong.
It isn't about Aucklanders making the best choices about how to get around based on the costs of travel, it isn't about balancing what people want in homes, businesses and leisure activities, it isn't about real environmental outcomes (because road pricing would deliver a bigger constraint to sprawl and reduce pollution due to traffic jams, than any rail scheme), it is about grand centrally planned visions that look nice in drawings and in theory, but don't actually deliver the real-world trade-offs people actually want.
The biggest irony is that the greatest beneficiaries of this agenda, if it gets pursued, are owners of commercial property in downtown Auckland. Now they are far from willing, it would seem, to pay for more than a tiny fraction of the grand CBD rail project. Is it not ironic then, that Rudman and the leftwing promoters of this plan are advocating a massive transfer in wealth from taxpayers across the country, to this small, some may say, elite group?