Free public transport is not an environmentally friendly policy

Auckland's leading leftwing Mayoral candidate, Efeso Collins, has as one of his key platforms making public transport "free" at the point of use, by which he means he'll force everyone else (ratepayers and he's hoping taxpayers, as well as car and truck drivers) to pay for it.

The Greens, who want everything to be free, except your property rights, speech, powers to buy and sell and contract generally, support this.

Given how much publicity has been given to this idea, it's worth giving it a review.  You'll say, quite rightly, that a libertarian could never countenance forcing people to pay for others to get around, and you're right. Philosophically, the idea that if you want to travel somewhere, for whatever reason, that other people should be forced to pay for your choice of travel, is an anathema to individual liberty.  

However, let me put that to one side.  Does the idea that public transport should be fully taxpayer funded, has some merits? Could it actually result in less traffic, less pollution?

Tallinn, Estonia implemented free tram and bus travel for local residents in 2013. The National Audit Office of Estonia reviewed the impacts of the policy and came to the following conclusions:

• It did not reach its goal of reducing car journeys
• Public transport use increased, but not significantly
• Bus network doesn't meet the need of car users

A more detailed study of the impacts was more damning and it was based on a large scale survey in the city.  Note Tallinn previously had a fare-box cost recovery level of around one-third, so one-third of operating costs were recovered from fares, so fares were not high before. 

• Trips by public transport increased by 14%
• Trips by car decreased by 10%
• Trips by walking decreased by 40%
• Average distance travelled by car increased by 13%, resulting in total vehicle kms driven increased by 31%

Much of the public transport trip increase was for 15-19yos, 60-74yos, those on very low incomes, the unemployed/not in education.  However public transport trips for those on higher incomes decreased due to crowding. Higher income people preferred to drive. 

In short, free public transport saw more trips, most of them came from active modes, meanwhile the reduced car trips were more than offset by the remaining car trips being longer distances.  

This shouldn't be a surprise, Hasselt, Belgium (78,000 people) introduced free public transport in 1996.  The experience of that city was mixed:

• Public transport trips went up ten-fold
• 63% of additional public transport trips were existing users travelling more frequently
• 37% of additional public transport trips were new users, but only 16% came from car trips, the remainder were from bicycle and walking.  So the majority of mode shift was from active modes.
• There was also a five-fold increase in the bus fleet, doubling in bus routes and significant increase in frequencies at the same time as abolition of fares
• There was no noticeable impact on car ownership or change in trip mode share
• Free fares were dropped in 2014 because of the cost, with fare concessions applying only to only a small minority of passengers.

In short, free public transport saw people who already used it, used it a lot more often, and the majority of new users switched from walking and cycling to riding public transport.  

Templin, Germany (15,000 people) also introduced free public transport, in 1997.  The result were:

• 12 fold increase in patronage, with the majority being young people and children
• 35-50% of the modal shift came from walking, 30-40% from cycling, with only 10-20% coming from car trips
• Vandalism increased attributed to the higher numbers of younger passengers.

Once again, the main impact of free public transport is to attract people from active modes, so people ride buses instead of walking and cycling.  This costs more for taxpayers, costs more for the environment and so is a negative net impact overall. 

In NONE of the case studies of free public transport was there a meaningful impact on traffic congestion.  

In ALL of the case studies the two main impacts were:

• to encourage people who already use public transport to travel a lot more often
• Reduce walking and cycling (because people who walked and cycled found it quicker and easier to just hop on a bus)

Free public transport has a small impact on driving, but it is hardly worth the cost. It has a big impact on walking and cycling, which is a transfer from zero emissions transport to transport that generates emissions, both directly (fuel and electricity) and indirectly (production of buses/trams/trains, road/rail wear and tear).  

Some may say there is utility in people doing more trips by public transport, but if they were trips that weren't going to happen anyway, then the question is why should taxpayers/ratepayers pay for people to do joyrides, to visit friends, visit places they never thought of going before, just because it's free? Why is that a good use of taxpayer/ratepayer money?  

The simple truth is that free public transport is a political bribe that sounds nice, and gets a lot of support from some on the Green-left despite the evidence being that it is anti-environmental.  It might make a small difference to car trips, but it makes a big difference to reducing walking and cycling - and it generates a lot of arguably unnecessary trips.

So maybe consider that when voting in the local elections.

Auckland light rail - some thoughts UPDATED

The Government's announcement that it has chosen a nearly $15b option to build a single light rail metro line from Wynyard through the Isthmus to Mt Roskill then Mangere and the Airport utterly astonishes me, Although I obtain some schadenfreude from the urbanists upset that it isn't a street tram (in part because they WANT it to take away road space from other traffic), I remain utterly gobsmacked that the amount of money concerned and the hype surrounding what it is mean to do doesn't appear to have much concern at all from The Treasury.

On purely opportunity cost alone the idea that it is worth spending that amount on money on ONE fast tram line ought to be shades of the Think Big debacles of the 1970s and 1980s.  Sure it is easy to question whether some of the motorway projects the National Government advanced were the best use of road users taxes, but this is in another league.   If you were to put all of Kiwirail on the market, and even guarantee ongoing operating subsidies for commuter rail in Auckland and Wellington, I doubt you would get one-tenth of the capital costs of that single line - that ought to put in perspective what this is about.

What gets me the most is that the very basic pure public policy questions surrounding this project haven't been asked, it looks just like a politically driven legacy project, fueled by Phil Goff on the one hand, with Michael Wood and Grant Robertson willing to jump on the boondoggle.

Of course it has an "indicative business case", which like all massive government projects aren't business cases at all, because there is no business here. Auckland Light Rail will never generate a financial surplus of revenue over operating cost, let alone a return on capital.  Of course, large government transport projects rarely do, but the language used is instructive, because some companies will make a fortune from Auckland Light Rail, in construction and technical consultancy.  A common assumption that NZTA historically used for major projects was that 15% of construction costs were consultancy and technical advisory services, and there are multiple companies circling around that trough, after all it's over $2b in fees. NO consultancy has a commercial interest in being critical of this opportunity to obtain serious bonuses for their New Zealand operations. 

Anyway, what about this business case (PDF).

It says:

The following sets out the problems that the proposed investment in rapid transit will address:
• A high reliance on cars is adversely affecting the climate as well as increasing harm from injury and pollution
• Increasing congestion will further disrupt and lengthen travel times, threatening investment and quality of life
• Some communities have worse access to public transport connections, creating inequity and reducing social cohesion

This is frankly pathetic.  So the problems are "too much car use", "congestion" and "poor public transport connections".

Even if you leave to one side the absurdity that high reliance of cars in Auckland is adversely affecting the climate (like a child urinating in Lake Taupo is poisoning it), climate change policy is addressed through the Emissions Trading Scheme, which caps emissions from transport.  The efficient tool to address this is to lower the cap, increasing the price of fuel, so people drive less. If this is about climate change it's a monstrously wasteful way of doing it, and it wont have any meaningful impact.

The claim of "increasing harm from injury and pollution" is questionable.  MoT resources state:

and there is no evidence of increasing pollution, largely because engines are getting cleaner and there is a growing number of low and zero emission vehicles.  However, it doesn't really matter.  If you think a primary reason to build a light rail metro is to address injuries and pollution on the roads then you're a moron.  You can reduce injuries by better enforcing drink driving laws, speed limits, traffic light violations dangerous driving, not build a light metro line.

Then there is congestion.  The reason there is traffic congestion is that demand for roadspace exceeds supply and politicians choose to price that roadspace the same, everywhere in NZ at all times. Price it higher at peak times and locations and congestion will ease. Price the roads properly and there is more space for buses, and buses can run more frequently and reliably, but that's not exciting for politicians.

Building a light rail metro wont ease congestion, although it WILL provide a fast link, given that passengers are forecast to not be willing to pay more than a small fraction of the cost of building and running it, suggests they don't value time THAT much, and more importantly, that congestion isn't bad enough for them to pay a lot more to avoid it. 

"Threatening investment" by whom? If you think Auckland Light Rail will relieve congestion across Auckland you're a moron, in fact you're a moron if you think it will relieve congestion on the corridor it will serve too.

Finally there is the badly worded "Some communities have worse access to public transport connections" worse than what? This is no doubt true in some form, but do you really think $15b is best spent on a single light rail metro line when you could almost certainly spend a tenth of that on frequent cross-city buses and bus priority measures to seriously uplift the city's public transport network? 

After all this connection will be nice for people in Mt Albert and Mt Roskill wanting a quick trip into the CBD (remember only 13% of Auckland jobs are in the CBD), noting that Mt Albert already has a railway station connecting to the City Rail Link underground electric railway under construction.  Who wants to go from Mt Albert and Mt Roskill to Onehunga and Mangere? I doubt many do.  From Onehunga, the light rail metro will probably be slower than the existing train service, and from Mangere it is quite the indirect route to the CBD, but it is good to get to the airport.  Remember that, this will be a slow route from the airport into the city centre, but be marginally useful from Mt Roskill.

Then take this utter drivel from the "business case":

Using public transport to travel from Māngere to the city centre takes more than twice as long than using a private vehicle. As a result, private vehicles account for 85 percent of all journeys to work by Māngere residents

According to the census (using this remarkable visualisation), the number one destination for people from Mangere Central to work or school is Auckland Airport

It's a logical non-sequitur to claim that because it takes twice as long to go by public transport to the city centre than by car that this means that most journeys to work by Mangere residents are by car, because in fact only 5% of them actually work in the city centre.  

So when it estimates that nearly 32m rides will be taken on this line by 2051 you have to take it with a pinch of salt.  In 2019 there were 103m rides across ALL railway, bus and ferry routes in Auckland, so to expect ONE line to carry about a third of that is ludicrous. For that travel it is going to cost $109m a year to operate, so it needs to charge $3.40 per fare to break even on operating costs, but that's not going to happen is it? It is meant to have the capacity of 32,600 people per hou, this is not far short of London's Victoria Line (at 37, 226), does anyone seriously think that EVEN with intensification there is going to be that level of demand on this line?

So given THOSE problems to solve, Auckland Light Rail is an abject failure, it doesn't address any of these effectively.

So I'll make some not-so-bold assertions, that I would happily have refuted:

1. Auckland Light Rail will make next to no impact on traffic congestion (and the business case ADMITS this on pg. 59. 
2. There isn't going to be continuously growing demand for travel on this corridor to and from the CBD.  In fact, Covid19 and changing work trends mean that the norm will be that people wont be in offices five days a week, which completely undermines the case for large scale peak transport capacity in cities
3. For 1% of the cost of this project, there could be some significant improvements in bus reliability and travel times along corridors, with bus rapid transit, bus priority measures at intersections and use of road pricing
4. For 3% of the cost of this project, Auckland could have an interconnected cycle lane network across the whole city
5. For another 6% of the cost of this project Auckland could have a comprehensive network of bus lanes and bus priority measures, higher frequency services AND payment using contactless debit and credit cards which would address all of the social issues, and encourage people to drive less.
   
6. Auckland Light Rail not only wont and cant stop urban sprawl, but also is unnecessary to support housing intensification, primarily because most jobs are still not going to be anywhere along the proposed corridor.  Furthermore, housing intensification along the corridor will have a marginal impact on housing pricing
   

and no, there is even LESS point building the slow tram along the street that the Greens want, because they mainly want it to take away road capacity.  Tradespeople, freight and delivery are unimportant to them, it's just the war on driving, so that rightfully has been dismissed.

Auckland Light Rail is an incredibly expensive folly, it isn't transformative (but the money it costs COULD be transformative in more subtle, more geographically spread and more effective ways that aren't so exciting to politicians) and it is almost certain there wont be anywhere near enough demand to justify it. 

Fares wont pay a cent towards its capital costs, and even property taxes that could be levied to pay for it, wont pay for more than a small fraction of the project. Ratepayers aren't willing to pay for it, and there isn't enough money raised from motoring taxes to pay much towards it either. It needs to be scrapped, and Auckland transport planners (and both Auckland and national politicians) need to focus on how to make existing networks work better, rather than the exciting fetish of a big shiny high capacity boondoggle....

UPDATE:  Of course taxpayer-funded radio (RNZ) discusses light rail with a critical view from.... the Green/left perspective.  The argument Matt Lowrie from the urbanist blog Greater Auckland is partly opportunity cost (it's cheaper to build a slow tram than a fast metro, so there is money to spend on... more slow trams), but then he's quoted as saying it is needed for Wellington, Christchurch, Hamilton and Tauranga? It's economic insanity, but why should anyone be surprised that state radio regards a different perspective to only be from its own tribe of Green Party supporters.

Transport policy with a vacuum of critical analysis

Politicians love transport policy.  I used to think it was some throwback for the men who engaged in it, who as boys may have played with model planes, trains, cars or whatever, and perhaps didn't get a chance in adulthood to get to play with full sized equivalents, because they chose a different career path.  Yet women in politics are quite keen on it too, although in most cases it tends to reflect one side of politics - the desire for control.

Transport is a sector which almost everyone has an opinion about, because almost everyone travels on a regular basis whether it be short trips in town, commuting or long distance travel.  However, as in most sectors, a little knowledge isn't really enough to make informed decisions about what should actually happen (except for your own choices).  The problem with transport is that almost all politicians have just that - a little knowledge.

That's exactly what you can see today in New Zealand, and if you think I'm just picking on the Labour Government you're wrong.  The previous National led government was far from perfect, nor was the previous Labour led government. All of them have been unwinding what was around 20 years of reforms in transport policy that progressively reduced or removed political roles in the supply and prices of transport infrastructure and services.  It started under the Clark Government, which renationalised the railways and Air New Zealand, for quite different reasons (both of which were a result of its own failure to continue previous reforms), and undertook a series of reforms that increased political control over central government funding of roads and public transport.  It renewed Wellington commuter rail system, and poured hundreds of millions to revive Auckland's system.  The Key Government took that new politicised framework, and reprioritised it to large motorway projects (Roads of National Significance), but it also funded the electrification of Auckland's commuter rail system and the City Rail Link (underground rail loop) in Auckland.  

Now, of course, the Ardern Government is moving away from motorways and focusing on trams.  

It announced its "Government Policy Statement" which is effectively a way of declaring its priorities for spending the money collected from road user through fuel duty (which it wants to increase), road user charges (which it also wants to increase) and motor vehicle registrations and licensing fees.   Phil Twyford might have announced it, but Julie Anne Genter, former junior transport planner, has also been influential. 

To understand what it means you need to also understand that in transport policy there isn't an agreed single point of view as to what works best or the impact of different policy instruments.   

The market-oriented approach

On the one hand is a belief that allowing market mechanisms such as user pays, competition, private enterprise and choice for users will enable better outcomes overall.  Indeed, you can see the results of this in many parts of the transport sector.  In shipping, aviation, freight and even intercity passenger transport in New Zealand, there is a light handed approach to the role of government.  Advocates of a more market approach seek to move away from politically based funding of transport infrastructure and services, encouraging transport users to pay for the costs of the services they use, which also includes a move to forms of road pricing.  Advocates of a market based approach tend to consider that there is little reason for government entities to own or operate transport service providers and that there are merits in moving towards more private ownership of private infrastructure as well.  They regard the negative externalities of transport (congestion, accidents, pollution) as being able to be managed through more market mechanisms and technology, rather than by controlling user behaviour.  Market oriented advocates are neutral across transport modes or user decisions, as long as users pay for what they use.

New Zealand transport has a lot of the free market

Ports are all run as businesses, some with private ownership, and all shipping (except the Interislander - which is profitable in its own right anyway) is operated competitively by the private sector.  Prices are set by the operators depending on competition and demand.

Airports are largely all run as businesses, some are partially privatised, and the airline industry is completely open to competition.  Air NZ may be (just) majority state owned, but it receives no subsidies, and New Zealand has one of the world's most open aviation markets.  The main restrictions are bilateral ones, many have "Open Skies" agreements with NZ, others have limits on the number/capacity of flights.  Airlines set their own fares, which was not at all the case until the late 1980s.  Airways Corporation is still an SOE, but is not subject to any political interference.  Unlike some countries, such as the USA, the NZ aviation sector funds itself, with airlines paying airports and the Airways Corporation for their services.

It's on the land that the role of politicians is most intrusive.  Yet in many areas they have little role.  For freight transport (on road), there are no significant barriers to entry and operators set their own prices depending on competition and demand.  Goods move around the country and in cities with relatively few restrictions, except some limits on road use due to noise and limits to the network.  For passenger transport between cities, besides aviation, most people drive, but for those who don't, coach services operate as an open market, with competition and prices set by the market.   Even though Kiwirail is state-owned (and has received well over $1 billion in new capital from the past two governments), it operates non-commuter passenger services as a business and is the same with freight.  It just happens to not be able to charge some of its freight customers enough to pay for the renewal of its infrastructure - which is where your taxes come in.  The taxi sector too is reasonably open, which is why Uber has been able to set up successfully too.

Now you're going to say - hang on, the roads are all government.  That's true, but it's also important to separate the roads into what are two networks. Firstly, the state highways (this includes all motorways). These are fully funded by road users from fuel taxes and road user charges.  All revenue from those charges goes into the National Land Transport Fund, and road user charges are set to recover the higher costs heavier vehicles impose on the road network, through greater wear and tear.  Secondly, the local roads. On average about half of the money spent on council roads comes from the National Land Transport Fund, the remainder from local rates.  Some argue that this means local roads are "subsidised", but there is an argument for ratepayer funding of local roads, because the presence and standard of local roads influences property values.  They could be seen as a proxy for an access charge to the road network for property owners.  However, it's not as if local roads typically "compete" with other transport modes like railways.  It is state highways that do that.

So all public roads are dependent on funding from the National Land Transport Fund allocated by the NZ Transport Agency, which also happens to manage the state highways.  Local roads are also dependent on ratepayer funding. This is far removed from the United States which funds a reasonable proportion of road spending from general taxes, or on the other hand from the UK, where road funding is around a quarter of the revenue raised from motoring taxes.  For NZ the emergence of taxpayer funding of roads has been a recent policy initiative, and not a welcome one.

The central-planners' approach

Unlike the advocates of a market oriented approach, central planners believe strongly in politically directed funding, regulation and provision of transport infrastructure and services.  They tend to be  advocates of central or local government owned and operated transport providers, and unquestionably support government ownership of transport infrastructure.  They seek control of service standards, frequencies, routes, fares and charges.  The primary focus of central planners is on urban transport, although they drift into intercity transport of people and goods as well.  They largely show limited interest in the shipping and aviation sectors.

The central planners are now heavily focused on environmental objectives, with strong enthusiasm for scheduled fixed-route public transport.  That's because they are particularly focused on inputs, on what infrastructure and services are provided.  This is interesting because the current generation of transport central planners like to think of themselves as showing "new thinking", because they reject the previous generation of central planners selection of inputs.  Both generations embrace the "predict and provide" methodology of deciding what transport infrastructure to build.  The difference is they disagree on the inputs.

The previous generation were strong advocates of building more roads, large urban motorways and car park buildings to accommodate the predicted unfettered growth in car traffic.  They weren't interested in road users really paying for those motorways (or at least not just the ones riding them, with the exception of tolls on some crossing), but saw the future as one where private car use could be accommodated in cities.  On the scale some planners predicted that was clearly neither going to be affordable, nor desirable, but when such roads were built they did encourage development at the locations they served, and by lowering the cost of driving (in terms of time and fuel), they helped generate demand (that's where the widely misused "if you build roads they just fill up with traffic" cliche comes from).  The "motorway planners" regarded public transport as antiquated and increasingly just existing for those who do not own cars, or in high density cities, accepted as commercial metro systems.

The current generation of planners are strong advocates of building more urban railways, building tram lines (now called "light rail") and uses buses to connect to these, as well as supporting cycling infrastructure.  However, most notably they also support measures to reduce the speed of other road traffic, by reallocating road space to trams, buses, bicycles and pedestrians, and to provide priority to the preferred modes (rail, bus, cycling, pedestrians), over cars, trucks and vans (freight isn't that important to the central planners - either it should go on rail or be moved at off peak times, or it is ignored altogether). The "public transport" planners regard private motoring as not just antiquated, but almost malignant. Some of the language used to describe motorists is either hostile or treats them as is need of help.  The term "car dependent" or "addicted to their cars", is language you'd expect of those who abuse narcotics, not people who choose a mode of transport.  It's designed to support a narrative that "if only" more money was spent on public transport, people could be "weaned away" (as they are children) from their cars.  For the central planners, the only choice worth making is away from driving.

It's all about emissions

Now the policy is singularly focused on climate change, despite existence of the Emissions Trading Scheme which means every time you refuel your car, or ride a bus or fly domestically, you are paying for your CO2 emissions. The Ardern Government thinks it is responsible for helping save the world by making it more expensive to own (the wrong) cars and use them, and to take money from you for driving and put it into their preferred modes of transport. Similarly the Vision Zero strategy around eliminating road fatalities is as much about making driving less convenient and less fast - enforcement of bad driving behaviour comes second to reducing speed limits and instituting speed bumps, because slower traffic is safer (it's also more competitive with modes that are demonstrably slower). 

That's why even if road transport emissions dropped dramatically because of takeup of electric vehicles and the like, that isn't good enough.  You see the policy is not so much about reducing emission, but reducing emissions the right way.  It doesn't matter that it makes no difference.

The moral imperative of the Ardern Government's transport policy is not one based on trusting people to make their own decisions, but rather to direct them and to spend money to provide choices that are approved and recommended (like the Te Huia train) having taken it from those that are not approved or recommended (car drivers and truck operators).  There is policy obscurity in that having concepts like "user-pays" or "economic efficiency" are not desired, because they don't deliver a tramline, nor do they deliver a bicycle bridge over Auckland harbour.

Is it because the Ardern generation are too young and too narrowed minded in their understanding of history (and too full of conceit about the capabilities of their power and the ability of the state to figure out what's best for everyone)?  Have they swallowed the hyperbolic nonsense of the Greens that the whole system is set up to "favour" driving, even though motorists buy their own vehicles and pay a much higher proportion of the costs of their transport choice than public transport users?  Do they really think the common people would be happier and better off if they only just walked and biked a lot?  Do they really think that many people don't use vehicles for their "legitimate purposes"?

That last point is instructive, because it shows the philosophical starting point of Ardern and Wood.  They think the ordinary folk make endlessly foolish decisions, and they need correcting.  So they will take their money and give them "correct" choices, like the slow train from Hamilton to.... Papakura (soon Puhinui... wow).  Like the slow tram down Dominion Road (maybe), which isn't really about relieving congestion, but about a vision around urban form (it doesn't matter that most jobs wont be accessible with the tram).  Now most recently the Let's Get Wellington Moving project which was once a collaboration between central and local government to plan a major uplift in road and public transport infrastructure, now relegated to proposing a pedestrian crossing on a part of SH1 near the airport of which one side is over a kilometre from anyone's home.

It's not quite the 1970s, it isn't illegal to send freight by road if there is a parallel rail line, and petrol prices aren't regulated, nor is Kiwirail a department yet - but any sense that users should drive spending and users should, by and large, pay for what infrastructure they use is evaporating.  This is a government that thinks it knows best.

Te Huia - a nice idea, but a lot of money to achieve very little

The launch of the Te Huia commuter train from Hamilton to Papakura has obtained a lot of publicity today, showing how journalists love an excuse for a train ride, and the lack of any high profile easy to understand positive news in New Zealand.

It is easy to see why some would be convinced this might be a good idea.  After all, there has been a daily commuter train from Palmerston North to Wellington (the Capital Connection) since 1991, running until very recently, as a commercial (unsubsidised) service, although it carries more people from intermediate stations like Levin and Otaki especially, than from Palmerston North.  However, experience for passenger rail travel from the Waikato to Auckland has been not so good.  The last time this was attempted was in 2000, commercially, by the then private TranzRail with a train called the Waikato Connection.  It ran once daily from Hamilton to Auckland, but had most of its passengers boarding at Pukekohe (which then had no service) and Papakura (because it basically offered a faster/non-stop more luxurious option than the basic diesel commuter trains), so that at the end less than a seated bus load of passengers used it from Hamilton. 

The latest attempt is not even a train from Hamilton to Auckland, it is from Hamilton to Papakura, to connect with the electric commuter train to Auckland, so it actually takes 2.5 hours from Hamilton to downtown Auckland.  This isn't exactly competitive with driving, which is around 1hr 40-50 minutes from station to station (and realistically almost everyone isn't starting or finishing their trips at either) although congestion can worsen that towards 2hrs.  The train has two stations in Hamilton and one in Huntly, with no other stops, so it offers nothing for any commuters in Ngaruawahia, Taupiri, Mercer or Pokeno for example, although those in Ngaruawahia or Taupiri might drive to Huntly to leave their cars.

The cost is eye-watering, at $67.6m in capital spending, $58.5m from road users' taxes and $9.1m from local authorities. Another $29.3m in being spent over 4.5 years in subsidies, mostly $22.1m from road users' taxes.  Over $1m has been spent to make Huntly Station operational in itself.  Given $55.1m is being spent on public transport subsidies for all other Waikato services in 2018-2021, this is a lot of money to take from road users and ratepayers for one service, operating two times a day weekdays.

The media reports indicate it could remove 73,000 cars off the road... a year.  The train has capacity for 150 people (not much at all bearing in mind that the Capital Connection has 448 seats).  Now given there are 262 working days a year, this means it should take 279 cars off the road each weekday return. Page 16 of the last Household Travel Survey 2015 indicated mean NZ car occupancy per trip is 1.51 so if we optimistically assume this is car occupancy for potential users of the train, that means that the train need to carry 421 people per day (which is significantly above its capacity of 300) to remove 73,000 car trips a year.

Media reports today variously indicated 90 people arriving or 70, but even if 90 all drove a car each, for each service (and don't now) it would still only be around 47,000 car trips a year removed from the road.  However, it is highly unlikely 90 all drove or would drive separate vehicles, so it all seems a bit far-fetched.

Even if it DID do this, at what cost? is it worth nearly $100m to take 279 cars off the road a day? In emissions terms it is meaningless, because the ETS means that the emissions from cars simply get consumed by someone else (and if the cars still drove someone else wouldn't be using those emissions).  In congestion reduction terms it might make a small difference to travel times, but it isn't worth $100m

Road pricing in Auckland

A simple guide:

1.  The proposal now on the cards is not "road tolls", tolls are when individual roads are subject to an additional fee on top of existing motoring taxes.  

2. The Auckland Mayor's "motorway tolls" proposal has been comprehensively rejected, as it has been before for sound reasons.  Quite simply, the motorways are not Auckland Council's to charge and just charging them diverts traffic onto the local road network which has traditionally been neglected in Auckland.

3. The proposal put forward by the government is to replace fuel tax with what is essentially an updated version of road user charges (which already is provided now by three private companies collected RUC), that varies by vehicle type, location and time of day.  It should be absolutely clear, as are vaguely similar proposals in Oregon and California, that fuel tax must go if roads are to be charged directly. 

4. The Auckland Transport Alignment Project (ATAP) has made it abundantly clear that the current "build lots of rail based public transport" trend beloved of new-urbanist planning enthusiasts (and the Green Party) will have next to no impact on traffic congestion. It's hardly surprising, because the reason traffic congestion exists is because the provision of roads and the pricing of roads is not done under market conditions, but is subject to a political/administrative process that results in demand exceeding supply.  Nowhere in the new world (NZ/Australia/US/Canada) have any cities noticeably eased traffic congestion by building new bespoke passenger rail networks.  Which is why, when questioned, the enthusiasts for highly subsidised (by taxes from road users) urban rail don't talk about addressing the problems of urban transport, but sell how "wonderful" it is for people to have a choice that they pay a fraction of the cost for.

5. There is no need for road pricing to be accompanied by highly subsidised alternatives.  Full market based road pricing has four major effects:

-  Prices go up at peak times, encouraging users to make different choices, such as drive at a different time, use a different (less congested) route if available, use another mode (increasing revenue for that mode), or not take a trip at all (consolidating trips);

- Prices go down at off peak times, encouraging greater use and facilitating more trips at those times;

- Congestion is greatly reduced, providing capacity for more public transport on existing roads at peaks, and making such public transport commercially viable.

- Higher revenues at peak times on busy roads sends a signal to invest in more road capacity when revenue from additional users will pay for the cost of the new capital investment

The primary economic argument for subsidising peak time public transport in cities has always been that roads in cities at peak times are underpriced (and historically the technology did not exist to adequately address this).  Once roads are priced efficiently, the case for subsidising urban public transport is weak indeed.  Notice that intercity bus and airline services are not subsidised, neither are road freight services (in or between cities).  Why should urban public transport be special when roads are subject to market forces?

6.  Market based road pricing inevitably should mean the management of roads is taken away from politicians and bureaucracies and towards a more commercial model.  State highways could be shifted into a state-owned-enterprise that could be privatised by giving away shares to all registered vehicle owners.  Local authority roads could be transferred into similar enterprises, but with shares held by local property owners (as ratepayers currently pay for half of all local road costs).

The price of roads should then be set by these organisations.  They would be owned by those with the greatest interest in their networks being run efficiently and meeting their needs.  

7. The ATAP road pricing proposal can only work nationwide.  It isn't just for Auckland, it's a change in how roads are priced everywhere.

Auckland Council wont like this, because it knows that the only way to address congestion is through road pricing, but it doesn't want to lose control of its large rail vanity projects (now including trams - which are buses on dedicated rights of way for 3-5x the price to taxpayers).  It wants control of the revenue to spend on its politically/central planner driven projects, but it shouldn't get it.

Bearing in mind the government wont do what I say, this is what it could do:

- Move all of the state highways into a new SOE, empower that SOE to charge users but only if it gives them an equivalent refund in fuel tax or RUC

- Tell Auckland Council that if it shifts its roads into a new Council Controlled Organisation, it can be fully funded from fuel tax and RUC (and any road pricing that replaces them), but on condition it gives all Auckland ratepayers an equivalent permanent cut in rates and that it has no political direction at all on its activities.


More background on Auckland road pricing debate in recent years:
Auckland motorway tolls re-emerge as revenue raising option
Auckland transport funding report promotes urban road pricing and tolls
Auckland congestion charging, not happening yet

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...

Auckland road pricing?

Some questions:

- Is there a funding gap if large totemic projects that the users would never pay for themselves are dropped? (yes rail and road)

- Why does Auckland Council assume fuel tax will still exist in 30 years time when multiple states in the US and the Australian Federal Government are considering whether it has a future at all when vehicle engines become so fuel efficient that the tax would have to be very high to collect enough money at all?

- Why does Auckland Council think that two road pricing options, both highly criticised in a previous report are still worth considering, especially since technology has moved in leaps and bounds since then?

- Why does Auckland Council think that if there is user pays on the roads, directly, not through fuel tax, that there shouldn't be user pays on the railways?

- Why do options to fund transport in Auckland automatically exclude any evolution of the existing road pricing type system in the form of national road user charges?  A system that now has increasing numbers of people paying through a privately provided electronic system that measures where and when vehicles use the roads, and has competitive delivery.

- Why did Auckland Council completely ignore other road pricing options used elsewhere?  Is it because its consultants know nothing about them? (I very strongly expect this)

- Why does Auckland Council think roads shouldn't be run like a business?  Just because Auckland Transport Blog wants to plan, tax motorists and subsidise public transport in its eager bright eyed bushy-tailed attempt to push people into doing what it thinks is best for them, doesn't mean people will comply, or that it is good for them.

- What is Auckland Council's view on the automation of road transport, including the increasing likelihood that road vehicles will increasingly be self-steering and self-driving, at least part of the time?  Given this could treble the capacity of existing roads,  virtually eliminating congestion, dramatically cut pollution and eliminate one of the few advantages of rail over road, why ignore it?

Brian Rudman - a little knowledge isn't dangerous, just ignorant

Brian Rudman is perhaps the most regular of the NZ Herald's columnists to comment on transport issues in Auckland.  He comes at it from a rather predictable standard point of view which blends the railevangelism of the Greens with the cynical populism of NZ First.  To be fair to him, he does a bit of research, but the conclusions he comes to shows a rather dire lack of understanding of economics, a paucity of depth of knowledge about the sector and an unfortunate tendency to be driven by faith rather than evidence.

His latest column is headlined "tolls alone won't unclog our roads".  The implication being that someone claimed that they would.   A more honest headline in response is "trains wont unclog our roads", since column after column he has been preaching the gospel of the church of passenger railways.

What he is talking about is a proposal to introduce new tolls on Auckland's existing motorway network to "raise revenue" tax road users to pay for Auckland Council's grand transport plans, much of which is to fund infrastructure for subsidised public transport services.

There are three substantive issues here:

1.  Is the NZ$11.7 billion "funding gap" real and justified?  (i.e. should that much extra money be spent on transport in Auckland? What is gained by that? Who are the winners, and are they the same as the losers?  Why should anyone trust Auckland Council on this?  Given that all of the future money taken from motoring taxes and rates is already taken into account, has anyone asked Aucklanders whether they are willing to pay more?

2.  If there is a gap, how should it be funded?  Should users pay more for infrastructure and services they will benefit from?  Should ratepayers pay for infrastructure that increases their property values?  Should existing taxes go up? Should there be new taxes?

3.  Should Auckland roads have direct tolls/road pricing introduced as a different way to charge for road use, which could also reduce congestion by introducing the price instrument?

Is the NZ$11.7 billion "funding gap" real and justified?

On the first question, Rudman fails.  He doesn't ask this question.  With some irony, the Greens are attacking (with some good reason) central government's Think Big highway spending plans for being poor value for money.  Neither the Greens nor Rudman apply a similar test to the Auckland Council project list.  For many years, the former Auckland Regional Council had unfunded transport wishlists, is it any surprise the new Auckland Council has simply grandfathered that wishlist and added to it?

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.

So let's take the highest profile project that he and the Greens advocate - an underground CBD rail loop.

The Treasury/MoT report that reviewed the Auckland CBD underground rail tunnel states that this project, estimated to cost NZ$2.4 billion in capital, with ongoing additional costs of NZ$37 million per annum (although revenue offsetting that is not mentioned), will only reduce car trips into the CBD by 2,000 a day - out of a total of 40,000.  Now 88% of commutes in Auckland are not to the CBD.  That stark fact is constantly ignored by almost all advocates of rail in Auckland.

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.

So his pet rail project, will reduce 5% of 42% of 12% of Auckland commutes, which means only 0.25% of Auckland commutes will be shifted from car to public transport.  It's a brave person indeed who claims that is worth NZ$2.4 billion.

However, he completely blanks out the other effect.  The CBD rail project reduces bus trips to Auckland CBD by 10%, with double the number of people taken from existing bus services, both subsidised and unsubsidised, than from cars.  NZ$2.4 billion would in part be about shifting more people from buses than cars.  In short it is estimated to accommodate only 19% of the growth in future trips to the Auckland CBD.  The rest would be travelling by bus, car and ferry.  In his own article on this very report he blatantly misses this point by saying that other improvements wont be able to "cope with the predicted 32,000 extra passengers into the CBD in the 2041 morning peak. For that we need the rail loop." No Brian, only 6,000 of those 32,000 will use the loop.  It's deception to claim otherwise.

So it has a negligible impact on congestion, in fact the effect is so low it will be more than offset by forecast growth in traffic.  It reduces bus use more than car use, and only 1 in 5 future Auckland CBD commuters (which are themselves a subset comprising 1 in 5 of all Auckland commuters) would use it.

Even if you presume that all of the car commuters to the Auckland CBD benefit from the 5% reduction in car trips (and presumably a handful of fewer buses), that means that only 5% of all Auckland commuters experience a reduction in the negative externality of congestion.  So quite why should anyone pay over NZ$2 billion, plus ongoing operating subsidies, for 6,000 new rail commuters and for 5% of car commuters to save time (which they would do, on the margins), is a mystery.  It either hasn't occurred to Rudman (the report is rather clear on this) or he is evading it.

If there is a gap, how should it be funded?

However, let's leave that to one side, because his column does.  How should the money be raised if it was legitimate in the first place?  He doesn't spend much time on how it should be funded, rather how it should not be.

The solutions be posits are to both spend existing funds differently and raise new taxes from motorists.

He wants the state highway budget "redirected" towards public transport. Beyond the Puhoi-Wellsford motorway project, he isn't too clear on what other funded road projects shouldn't proceed.  In the past he has bemoaned other parts of the country getting money for roads, when his beloved Auckland can't get enough to pay for what it wants.  What he neglects is that outside Wellington and Tauranga, virtually all state highway projects are about reducing accidents, not reducing travel time.  However, he is an Auckland advocate so let's just accept that bias as being natural to him.  To be fair to the Greens, they do seek to abandon large swathes of road projects, including the Waterview connection, Puhoi-Wellsford and Waikato Expressway series of projects. 

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.

In other words, his bright idea for new money is full of holes, but since Labour tried to do it (against official advice) it must be ok, because he trusts politicians of a leftwing bent.

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?

Len Brown's Think Big plan - 10 questions

When you look at Len Brown's plans for spending a fortune on transport infrastructure in Auckland and his plans to charge those using it rather than tax various groups to pay for it, you might ask some real fundamental questions about what he isn't saying and in fact why you trust politicians to get these things done at all.

You see when you look at the underground rail loops, with cold dispassionate eyes, you can see this:

-  An underground rail tunnel and stations costing NZ$1.5 billion plus, that wont be a saleable asset.  Nobody will want to buy it outright for anything approaching 5% of that cost, without getting some subsidy for doing so.  In other words it is a wealth destroyer on the face of it.

- Those who would be forced to pay for it wont be those using it, regardless of what taxes are imposed to force others to pay for it.  Indeed those using it wont even be paying for the cost of running the trains through it.  At best they might pay half the operating costs, one day.  They are not paying for the trains either, you are.

-  Besides the users, the others benefiting are those businesses staffed or patronised by the users, who also wont be paying for it directly, well no more than you are paying.

-  There will be no discernible difference in traffic congestion, because both central and local government run the roads as Soviet style assets charging all users similarly regardless of time and location, with no attempt to ration scarce resources except by queuing or to invest in new capacity unless it is approved by political fiat.

The biggest problem I see in considering urban transport in Auckland is the complete lack of context of the debate.  You see if you want to fly to London, there is precious little involvement of politicians deciding, anymore, the prices, the frequencies of services, the types of planes, the timetables or in getting taxpayers to cough up money for the planes, or the airports.  Similarly if you want to send a container from Albany to Manukau.  You find a company that does the job and you pay it, with the company finding a truck, setting the price and then using the road - and paying road user charges for the privilege (and hopefully avoiding the queues inspired by the Soviet style rationing of the state and council's roads).  In neither case does what the Mayor of Auckland think have too much influence, although in the latter he'd clearly like to tax it more to pay for some unrelated infrastructure.

Yet when it is about people commuting, it suddenly becomes interesting.  Compare even simply getting a bus from Auckland to Whangarei, which is a service run by a private company for profit, buying its own buses, setting its own timetable and prices and providing a service for passengers willing to pay admittedly using State Highways.   Getting a train from Auckland to Manukau involves a train bought by the government, owned by the council, running at prices and times set by the council, managed by a private company, with its costs paid for by ratepayers, taxpayers and road users.

1.  Why are there always alleged "funding crises" for "Auckland transport", mostly involving shifting large numbers of people short distances, but not for moving freight short (or long) distances and not for international passenger or freight transport?  Could it be because the latter is virtually always the responsibility of private companies operating for profit, but the former is dominated by local authorities and planners deciding how they people should move, rubbing up against most Aucklanders who decided long ago they can buy a car and figure it out for themselves?

2.  Why is it that new ships, aircraft, trucks, buses, bicycles and cars (i.e. NOT infrastructure, just the objects that use it) are always  paid for by their owners, because in almost all cases they get enough from their users (if they are used to offer paid for services), but not trains?  Could it simply be that the people that use trains don't like them enough to pay for new ones?  Could it be because government is too lazy to spread the cost of capital of new trains over the life of the asset? 

3.  Why is it that users of ports, airports and the state highway networks all pay for the full costs of maintaining and building them, but users of railways and local roads don't?  Why are they special?

4.   If Aucklanders so desperately want an underground railway loop to use, why does no one, not even the uber-council of Auckland want to borrow the billions required to build it?  Could it be because there wont be enough money raised by the users of the railway to pay for the cost of operating a train through it, let alone pay for the railway in the first place? 

5.  If the underground railway loop is not about the people using the trains, but about revitalising the Auckland CBD, why wont the property owners of the area served by it invest in the loop, or at least support a specific rate to pay for the cost of it?  Is it because they know they Mayor and government are a soft touch with taxpayers money, or do they really simply not believe that the underground rail loop will make a lot of difference?

6.  Given the government has committed to spending NZ$1 billion of other people's money electrifying the current network (with the users not paying a cent towards it), predicated on ambitious prediction for growing usage (and reducing usage of the roads), why would anyone commit to spending several billion more before it actually being demonstrated that the earlier predictions for the results of destroying taxpayers' money on an unsaleable liability would meet expectations?

7.   Why is it good to shift large numbers of people from using a mix of subsidised and commercial bus services to using far more expensively subsidised rail services?  Could it be that advocates of the rail strategy don't like this inconvenient issue being highlighted?

8.    Outside peak times, how much of the capacity of Auckland's rail network lies idle, how much more will lie idle after electrification and the rail loop (I suspect around 66% given international benchmarks)?  How does that compare to the recent extensions to the motorway network?

9.    Why should road users across Auckland, on all roads, at all times, pay for a piece of unprofitable infrastructure that will

10.   Finally, why wont Auckland's Mayor and grand council face up to the fact that if it replaced rates funding of local roads with a form of direct tolls with congestion charging, that it would do far far more to relieve congestion and improve mobility than any rail scheme at next to no cost (whilst giving Aucklanders that don't contribute to peak jams some tax relief)?  Or is it far simpler politically to promise people big infrastructure baubles they don't have to pay for?

Want to know the common denominators with all of these?  A hint is this:

-  Planners don't like people moving about at times, places and in ways that they don't understand and can't organise.  They inherently fear this.  What they ignore is that there are planners in the transport sector that make things work smoothly, but they are commercial planners.  They make airports work like clockwork, logistics companies arrange for parcels to go from Dunedin to Dar Es Salaam and major to do all of this, because the incentives are right.

- Politicians don't like telling people they can't continue to have recourse to other people's money to subsidise their activities any more.  They much rather offer people something for nothing the cost of taxing others.

- Privatising the roads terrifies people because they have been inculcated with legends of fear from past privatisations perpetuated by hysterical socialist doom merchants. 

You see anyone who pretends that an underground rail loop will fix Auckland's transport woes is either a fool, naive or a liar.  Have a guess as to which one the people who should know better are.  If they don't like answering any of the questions above with a straight answer, then you'll know it isn't because they are stupid.

Banks backs boondoggle blow out

Cut wasteful spending, implores ACT Leader Dr. Don Brash.

Build the underground rail loop, using taxpayers' money says ACT candidate John Banks according to the NZ Herald.

For every dollar of costs it generates benefits of 40c, says an independent Ministry of Transport/Treasury review of Auckland Council's wildly optimistic demand for taxpayer funding "business case", even taking into account so-called "wider economic benefit".

So why is Don Brash supporting him?

Does a party that supports smaller government and less government spending believe in pouring NZ$2.4 billion into a project that:

-  Will continuously require subsidies to be used and maintained because the people who would use it wouldn't pay the fares necessary for the trains to operate, let alone dig the hole and build the stations for the trains to use;

-  Is based on a substantial portion of new Auckland commuter trips being from as yet unbuilt high density housing built adjacent to railway stations, even though there is little evidence Aucklanders want housing more closely akin to London, Manhattan and Paris, than New Zealand;

- Will not cater for the majority of increased trips forecast, as buses are meant to cater for those;

- Will only remove 3,800 car trips a weekday from the roads, which over a thirty year period is over $100 per car per day if you consider the capital cost over that period including interest.   It would be cheaper to give all of those people a free daily commute sharing a door-to-door shuttle with six people in each one;

- Wont cater for the 89% of Aucklanders employed who do not work in central Auckland.

So does Don Brash have to give John Banks a slapdown, otherwise nothing will really have changed.

My birthday rant

I've been extremely busy, so have had little chance to rant.  So here are my two cents on the events that have provoked me:

Mladic the thug:  Few events were more shameful for Europe (and the United States and New Zealand as a member of the UN Security Council at the time), in my view, that the brutal neo-nazi style genocide inflicted in the Balkans in the 1990s.  It is astonishing that if a civilian kidnaps children and then massacres them en masse, that there is more horror than when a "general" is given endorsement by politicians to do the same, that there is craven appeasement to it all.   UN peacekeepers sat by and did nothing whilst Srebrenica - a town declared a "safe haven" (for whom!) by the UN Security Council, was "ethnically cleansed" by Mladic and his knuckle dragging fascists, all happily appeased by the Serbian Orthodox Church as well.  The role call of dishonour and shame at the time is long and disgraceful.  It took Slobodan Milosevic's attempt to do the same to Kosovo for serious action to be taken, by then thousands of men and boys had been slaughtered in a style reminiscent of the Nazi death squads that rounded up and annihilated Jews in Lithuania.   The other victims, the women and girls (don't think too long about the cutoff age because there really wasn't one) who were raped, not only as conquests by the semi-literate Serb brutes, but also to breed little half-Serbs as part of a deliberate "race" driven policy.   However, as blatant and disgusting as was the Serbian ethno-fascism, one shouldn't forget Croatia was led by men who were not much better.  Visit the Krajina region of Croatia today, and try to find the Serbs who still live there, after Croatia's military terrorised the Serb population and chased them from their homes and farms, families with roots there for generations.  It is a primary reason why Croatia should not be allowed to join the European Union - for it must fully face up to its past.

The arrest, trial and condemnation of Mladic should provide an opportunity to remind us all of this period in history and how easy it is to provoke poorly educated, semi-literate young men to perform atrocities with the endorsement of politicians and religious leaders.  It should also remind Muslims that the Western interventions in this case were to save Muslims (albeit moderate or even nominal ones).   It should also provoke at least some consideration from the self-styled "peace movement" about what should have been done, since the left was divided about humanitarian intervention in this case. 

Brash ACT:  Don Brash's takeover of ACT is a lifeline, and also notable among libertarian circles is Lindsay Perigo's employment related to ACT.  I'm cautiously optimistic.  The greatest weakness Don Brash faced in 2005 under National became those in National who sought to spin and populise messages in ways that backfired.  His willingness to address state activities that granted differential treatment of Maori was not portrayed well with "Iwi, Kiwi" which implied something it should not have.   However, Brash is both economically and socially liberal.  He has the intelligence and the ability to take ACT down a path of being consistently in favour of less government and being tough on crime that involves victims.  He is no libertarian, but if this is a chance to shake up the next National government and wean it off of the statist racists in the Maori Party, then it shouldn't be dismissed out of hand.  I'm going to be watching this space very closely.  It is clear I have always been affiliated with Libertarianz and remain so, but Brash's leadership could cause me to think carefully about who to vote for this year.  

Auckland rail boondoggle hog-tied:  The Ministry of Transport and Treasury have reviewed the Auckland underground rail loop business case and found it wanting. It is hardly surprising.  Auckland rail has been a faith-based initiative from the start, primarily because the enormous cost premium to move people by rail, compared to bus is not justified by the change in behaviour it provokes.   Auckland rail advocates think because it is attracting lots of passengers (all of whom pay less in fares than the cost of operating the service, let alone the cost of capital) it is a good thing, but scrutiny about where those users are coming from indicates some pretty clear home truths.

First, around half of all trips into central Auckland in the morning peak are by public transport today.  This mode share is high by the standards of any new world city, and most of them are travelling by bus.  Trying to increase this in the absence of any form of congestion pricing is difficult, as the current strategy is to take money from all motorists to subsidise a minority of trip.  The number of trips by public transport has increased by 50% in ten years.  However, 40% of that increase has been by rail, 33% by the Northern Busway alone (bear in mind this is one route that has cost around a tenth of the cost of the rail network which has 2.5 lines) and the remainder by conventional bus and ferry services.   Rail has been important, but for the money spent on it, has not delivered compared to the other modes.  

The notable figure is the 15% decline in car trips, which are partly a function of increased fuel prices.  This will have had an effect on reducing congestion, although not as much as the figure may suggest.

Given only 11% of employment in Auckland is in the CBD, this modeshift is minor in the scheme of transport in Auckland.  However, the officials and politicians involved are totally CBD focused.  In short, the impact of more trips to the CBD by bus and rail is very low on congestion.  

Furthermore, the scope for significant increases in public transport usage is limited, most new world cities would be thrilled to have this sort of CBD mode share.  

However, there is something else the rail enthusiasts ignore.  There is already a NZ$2 billion taxpayer funded commitment to electrify Auckland's rail network with projections of a doubling in rail patronage.  However, these forecasts are not realistic because, as the MoT/Treasury report states:

Much of the future patronage growth forecast for the rail network comes from areas where significant intensified residential land use in growth nodes has been assumed in the model. Future rail patronage growth, including from the electrified do minimum, is therefore likely to rely, in part, on the realization of these land use assumptions.

In other words, it will come only if Aucklanders choose to live in medium to high density housing near railway stations AND work in the CBD AND choose to commute by rail.  A bold assumption, that is not exactly plausible.  It is part of the planners' wet dream that Aucklanders are gagging to live in London, Paris or New York style apartment conditions near railway stations in the suburbs.  Yes, apartment living has appeal for some, by only typically for living near the city so one can walk.  Quite why people in Auckland would want to live in such housing in the suburbs is unclear.

In essence, a fortune is being spent upgrading Auckland's rail network based on patronage forecasts that are fanciful and difficult to believe.  If they prove to be correct, then the network will be constrained without an underground loop (although the constraint will only be in the morning and evening peak - a few billion dollars for a few hours a day).  If wrong, then not only will an inner city underground loop be a destruction of wealth, but so will the electrification.

What is most damning is this statement from the review:

Significant parts of the Business Case assessment were not compliant with the procedures outlined in the NZTA‘s EEM for calculating transport benefits.

In other words, Auckland Council gerrymandered its assessment to suit its own needs.   That isn't even counting the gross exaggeration of wider economic benefits on a scale not seen on comparable projects in other countries.

The Green Party of course went along with this, at the same time as it damned the government for supporting road projects that - analysed correctly - had negative benefit/cost ratios.   

In short, the underground rail loop in central Auckland is a boondoggle. A complete waste of money that ranks alongside the grandious highway projects the government is funding north of Puhoi and north of Wellington.   Those who damn one should damn the other and vice versa.   For the government to embrace negative BCR "roads of National significance" but not the railway, is partly hypocritical.  Partly, because roads are funded from road users, railways are NEVER funded from rail users.  However, for the Greens, the Auckland Council and the railevangelists to damn the roads, but bow down to the altar of the railway is at least as hypocritical.  It is time for the railevangelists to be honest - their belief in rail is no more than that - a non-evidence based feeling that trains are good, better than buses and that whatever it takes to build railways is justifiable.  One need only read the Auckland transport blog regularly to see the evangelical enthusiasm for spending other people's money on new rail lines all over the place.  None of it is linked to demand forecasting, willingness to pay or economic evaluation - it is just a rail enthusiasts build-fest. 

Oh and the same should apply to road building too.