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...