Greens so wrong on trucks

Well why should I be surprised? The Green party response to the truckers protesting against a government that lied to them is to say "It is time to stop subsidising the trucking industry". I've fisked this nonsense before, but if you dare... read on.

You really do have to wonder how these people can say on one side of their face don't subsidise one industry, but go ahead, subsidise the competing one to the hilt!

The Greens cheer lead the renationalisation of the entire railway sector, cheer lead taxpayers subsidising rail maintenance costs, cheer lead taxpayers fully funding new railway lines which only a handful of rail freight customers will benefit from and generally slobber with excitement at the prospect of taxpayers' being pillaged to prop up their totems of twin ribbons of steel on concrete. Subsidising trains is good. Remember subsidising coastal shipping is good too, so is subsidising buses - in the Church of the Uninformed Transport Environmentalist (not quite a rude acronym) these are the holy words, not to be sullied by evidence or analysis, but full of nonsensical scaremongering.

Then they say "don't subsidise trucks".

Are trucks subsidised? Well as usual the simpleton kneejerk headline grabbing approach of the Greens obfuscates, confuses, distorts and frankly gets it very wrong.

Jeanette Fitzsimons says "At the moment, truck drivers only pay 56 percent of their costs to the economy, compared to rail freight users who pay on average 82 percent and ordinary motorists who pay 64 percent, according to the Ministry of Transport's Surface Transport Costs and Charges study from 2005"

OK let's pull that one apart:

1. "At the moment" is wrong, the study was a snapshot of 2001/2002 statistics. Before the government bought back the track or the entire railway, before it started subsidising the maintenance of the railway track and before it increased Road User Charges on heavy trucks twice. Rail freight users are undoubtedly paying less than the putative 82% and truck "drivers" (well the owners) will be paying more than they are now. That's if we accept those figures, and I don't. After all I've read the report, many times.

2. If you break down the costs, which are total costs, then we go from costs that are real and actual, to ones that are putative and notional. This is when it gets complicated.

The "56%" recovery of truck costs includes such things as return on capital of recoverable assets. Now since rail isn't expected to make a return on capital on the track and right of way, we can remove those from trucks too. Suddenly this 56% figure goes up to 72%. However that includes externalities mainly for pollution. The air pollution figure is telling, as it is back in the days when diesel was dirty with 1500ppm of sulphur (which is the dominant contributor to PM10 - particulate matter, which is by far the most damaging pollutant). Diesel now has 3% of the sulphur that it had in 2001/2002, easily stripping out the majority of the air pollution "cost". Then there is noise, which is valued at $87m. Now noise tends to be factored into property values, so arguably can be stripped out as well.

So now this 56% cost recovery figure is 91%. Remember heavy RUC has now been increased twice since then, although maintenance costs have increased as well, so let's be generous and say RUC has gone up to cover that.

We know that half of the cost of local authority roads is recovered from rates. This is deliberate and could easily be addressed by another increase in RUC (but councils better be required to cut rates in compensation). Simply recovering this additional cost from trucks would more than overcompensate for the 9% "subsidy".

Still following me? Thought not.

So the 56% is rather illusory, especially when you ask trucks to be treated the way rail is now treated, when you take into account the dramatic reduction in pollution simply through now having far cleaner fuel, and you eradicate the rather esoteric monetisation of noise. The gap is simply the cost of maintaining local roads which comes from rates - and local roads do not compete with rail.

So this subsidy is not only hypocritical, but at worst a rather insignificant contribution that is about local roads - which you could also argue is about property owners paying for access to their properties.

Funnily enough doing the same rejig for cars puts cars on the same figure of about 91%.

3. Jeanette says "It is important to remember that Road User Charges for trucks have been increased only once since 1989". This is nonsense. RUC for trucks over 6 tonnes has increased twice now as of 1 July. RUC for smaller trucks has been increased several times since 1989 (trucks 4-6 tonnes) so she is wrong. However there is a reason why RUC for heavy trucks has only gone up twice. The maintenance costs for roads have not gone up at the same rate as kms driven because of the efficiencies since 1989 of contracting out maintenance to the private sector on a competitive basis, instead of having the Ministry of Works and councils doing it. Something, no doubt, the Greens probably would have opposed as "privatisation". So revenue from heavy trucks has, pretty much, increased faster than road maintenance costs until recently, when the cost of oil has meant bitumen prices have risen considerably. So the point is, so bloody what Jeanette? Why should they go up faster than costs?

4. Jeanette says "If we want to see more of our heavy freight on rail instead of big trucks on the road, we need fair Road User Charges." Fair? You mean recovering more than the financial costs they impose? How about recovering all of rail costs? Oh yes forgot that, it's ok to subsidise the church of rail - but not roads.

Now there is no point reiterating the OTHER finding of the STCC study the Greens love quoting. You see the figures Jeanette talks of are total costs, but this doesn't tell you how much extra cost shifting a tonne of freight by rail or road imposes relative to those costs. Those are marginal costs (asleep yet?). As I have said before, the marginal environmental costs of hauling freight on a tonne km basis sometimes are higher by rail than by road (between Auckland and Wellington), sometimes similar (between Napier and Gisborne), sometimes lower (between Kinleith and Tauranga).

So you see, whether or not freight is greener by rail or road depends very much on the circumstances. However the followers of the rail religion don't want to hear that - it destroys the mythology they have around transport, which quite frankly is truly bizarre.

Will Zimbabwe run out of banknotes?

One can hope, now that according to the Daily Telegraph the German supplier of paper has cancelled its contract effectively as a political statement against the regime.

"The highest value banknote is worth Z$50 billion - which is presently enough to buy one can of baked beans."

If paper can't be sourced (which seems unlikely) then it may well bring things to a head - unless the regime effectively uses foreign currency amongst itself while impoverishing the public with its worthless "money".

Should liberal democrats take up rights of smokers?

Mark Littlewood in the Daily Telegraph argues that the Liberal Democrats ought to be more consistently liberal, and argue against the smoking ban in pubs.

Now I think the point should be more direct - this is about private property rights. The right of a pub owner (or any business) to decide what legal activities should be carried out on that property. Sadly most of those fighting for "smokers rights" don't argue that point, but think they have a "right" to smoke wherever they want - they don't. That right can only exist in public places and on private property is up to the person in legal control of the property.

However there is a wider point here. The Liberal Democrats are by and large not liberal. They argue for taxes for environmental reasons, state subsidies and intervention in others, the Liberal Democrats are the new leftwing party of the UK, wanting more government, more state spending and being opposed to privatisation. It's about time the party either went back to liberal principles or admitted the change and became the Socialist Democrats.

Truck protest

The symbolism of the truck protest is so very important - it's important because it demonstrates three things.

1. A sector that has been much maligned by this government (after all the buyback of rail is about heavily subsidising that mode to take business off of the trucking industry, with subsidies for coastal shipping about doing the same - REGARDLESS of the evidence that the government's own study demonstrates), has had enough. Labour is no friend of road freight, truck operators know this, and there are more of them than there are unionised railway workers or waterfront workers. Labour is not interested in a level playing field between road and rail, it wants to save rail because of a belief, not because of evidence. Trucking is a highly competitive industry with small margins, Labour has reduced those again without appearing to give a damn.

2. Labour broke a promise. Not one that can be obfuscated or ignored. Annette King said one thing and did another. So not only has it acted in a way that would be unpopular anyway, it has treated the road freight sector as if it doesn't even deserve the respect of openness. I have met Tony Friedlander a few times, he is a very upfront guy who likes to be informed and aware of what is going on, to avoid this sort of thing. It was always made clear that dialogue and frankness would result in at least a sense of mutual respect - Annette King has squandered this and paid the price.

3. The constant increases in transport spending have finally hit the level of tolerance. You see most of you lot swallow fuel tax increases and do nothing about it - you voted for the government to be re-elected twice. You swallow increases in rates for public transport too. Truckies make a living out of this sector. The increase in RUC has been justified because it would keep the parity between petrol tax and RUC for different types of vehicles - so because YOU accept fuel tax increases, RUC goes up as well.

So while you may cheer the truckies for putting the boot into government, ask yourself this...

Do you support a major upgrade in Auckland's rail system?
Do you support a major upgrade in Wellington's rail system?
Do you support finishing Auckland's Western ring route through Waterview with an underground tunnel?
Do you support building Transmission Gully?
Do you support building new southern and northern motorways approaching Christchurch?
Do you support putting Victoria Park viaduct in two tunnels rather than just widening it?

Just a sample, but you see the longer that list is, the more money is needed - and while you're willing to pay more fuel tax for this - the truckies aren't. So are you surprised?

So if these lines closed...

According to Stuff Dr Cullen has released a list of railway lines that were "threatened with closure" if the government didn't make you pay to buy the trains that ran on them.

Let's remember the government bought the track back a few years ago, so the lines themselves wouldn't close - someone else could have operated on them. Let's also remember that even before Labour was elected, the government owned the LAND under the track, so could always have let someone else re-lay track if the railway was going to be a good idea. So in truth nothing much would have been lost. However, let's look at the list:

- the Overlander. Not a line, but a passenger train service. Now given that Toll reinstated this train without subsidy recently, either it isn't going well, or it's a bluff. Either way it's hardly that important, just nostalgia that should say the government keeps it going.

- the North Island Main Trunk line between Te Kuiti and Palmerston North: Now that sounds like a bluff. If you close that, you essentially have dismembered the key north-south container route. If the electrified main trunk line isn't worth it then there is a serious issue about the viability of long haul rail freight in NZ. I personally doubt that would have been closed, but if the figures show it isn't worth keeping open then claims about its fuel efficiency and everything else seem specious.

- Northland: Assuming that means all lines north of Helensville (where passenger service ends or is about to), I'm hardly surprised. The trains are relatively short, lightly loaded, the infrastructure is very old, and the routes circuitous and long been height/weight limited. The scope to do more in Northland is low, which is why the proposed Marsden Point branch line doesn't have Northland Port lining up to pay for it.

- Taranaki: Assuming that means all lines from Marton (and Okahutuna) through all of the Naki. Well that means milk trains from Hawera aren't viable, nor is the container traffic. Now the line from the north to Taranaki is very expensive and hardly a surprise, but from the south is. I would expect Hawera south to be marginally viable, but the rest may well be questionable.

- Napier-Gisborne: No brainer really, a couple of trains a day is not a viable rail link. It would be missed for sentimental reasons, the logs in Gisborne leave through the Port of Gisborne, and the rest are trucked the short distance to Napier.

- Hawke's Bay line: Assuming this is all south of Napier, this isn't much of a surprise. It is at least marginal, although milk south of Dannevirke would seem to be marginally profitable.

- north of Wairarapa: Again hardly a surprise, main use is as a diversion from incidents on the Wellington-Palmerston North line. Nothing much to serve here.

- Greymouth to Hokitika: Expensive to maintain old line, a bit of dairy traffic but nothing that couldn't be trucked to Greymouth. The money on the coast comes from the coal traffic, which seems secure.

- Invercargill to Bluff and Wairio: Port at Bluff is served really by Southland which means distances too short for rail and for locations where no railway exists. Wairio is about coal and is a very old line. If the coal isn't worth moving then this line has no future.

Remaining then is Auckland commuter, Auckland-Hamilton-Te Kuiti, all of the Bay of Plenty log/timber oriented lines, Wellington-Palmerston North, Wellington commuter, Picton-Christchurch-Dunedin-Invercargill and West Coast-Lyttelton for coal.

If you leave out the main trunk (which I doubt would close), then there is a lot of rail left which appears to be profitable. So why the panic? Especially since the government owned the track anyway and could allow anyone else to use it (if they were so inclined).

UPDATE: So if you read another Stuff report it also says the Picton-Christchurch line is threatened, but then only talks about "lines in Northland, Taranaki, Hawke's Bay, Wairarapa and Invercargill." Not all then. Come on, can't the same news outfit get the same story consistent? Sheesh.