tag:theconversation.com,2011:/us/topics/transport-funding-27166/articlesTransport funding – The Conversation2022-05-24T01:56:17Ztag:theconversation.com,2011:article/1810532022-05-24T01:56:17Z2022-05-24T01:56:17ZDon’t believe the backlash – the benefits of NZ investing more in cycling will far outweigh the costs<figure><img src="https://images.theconversation.com/files/464098/original/file-20220518-25-n2rgv.jpg?ixlib=rb-1.1.0&rect=143%2C242%2C5847%2C3610&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock/Tanya NZ</span></span></figcaption></figure><p>The Dutch have long been recognised as <a href="https://dutchreview.com/culture/how-the-netherlands-became-a-cycling-country/">leaders in cycling</a>. Denmark is not far behind, with more bikes than cars in its capital Copenhagen. This is the result of many years of investment. Even the UK, with less of a cycling tradition, is investing and showing growth in cycling. </p>
<p>New Zealand is starting to follow suit. The <a href="https://environment.govt.nz/publications/aotearoa-new-zealands-first-emissions-reduction-plan/">Emissions Reduction Plan</a>, released last week, includes NZ$350 million to <a href="https://www.rnz.co.nz/news/political/467196/first-emissions-reduction-plan-spends-2-point-9b-from-emergency-response-fund">encourage walking, cycling and public transport</a>. </p>
<p>Investment in cycling is often motivated by the need to curb emissions and to increase rates of active transport. But the backlash can sometimes seem as large as the level of spending.</p>
<p>New Zealand spends around $5 billion per year on transport. On average, over the past decade, 41% was spent on maintaining existing roads, 38% on building new roads, 17% on public transport and 1.7% on walking and cycling. </p>
<p>Some critics argue cyclists do not pay for cycle infrastructure.
But transport funding comes from several sources, including central government funds such as fuel excise duty (paid on petrol purchased), road user charges (paid by diesel vehicle owners), vehicle registration and licensing, and local government funds from rates. One-off investments have come from the <a href="https://www.nzta.govt.nz/projects/northern-pathway/">NZ Upgrade Programme</a> and the <a href="https://www.growregions.govt.nz/about-us/news/new-west-coast-trail-provides-tourism-boost-thanks-to-pdu-funding/">Provincial Growth Fund</a>. </p>
<p>Many of these sources come from general taxation, which cyclists pay. Most people who commute by bike usually also own a car and therefore pay for registration and licensing. </p>
<p>Increasing the number of cyclists will benefit the economy since research shows cities with more physically active people are more productive. The evidence for investing in cycle infrastructure is compelling. </p>
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<img alt="This graph shows the annual government spending on transport." src="https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=459&fit=crop&dpr=1 754w, https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=459&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/457527/original/file-20220411-18-2ldfjp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=459&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Road building and maintenance take up most of transport funding, with less than 2% spent on cycling and walking infrastructure.</span>
<span class="attribution"><span class="license">Author provided</span></span>
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</figure>
<h2>Health benefits from cycling</h2>
<p>Active commuting has been shown to <a href="https://doi.org/10.1136/bmj.j1456">reduce the risk of disease</a> and to <a href="https://www.nzta.govt.nz/resources/research/reports/675/">enhance mental health</a>. <a href="https://doi.org/10.1007/s11116-014-9521-x">Research</a> has even found that cycling is the happiest way to travel.</p>
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<img alt="Bike lanes separated from the main road." src="https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=799&fit=crop&dpr=1 600w, https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=799&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=799&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1004&fit=crop&dpr=1 754w, https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1004&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/464092/original/file-20220518-23-ixh8mx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1004&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cycling has benefits for physical and mental health.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>A recent <a href="https://www.newscientist.com/article/2309343-pedestrian-friendly-cities-have-lower-rates-of-diabetes-and-obesity/">review</a> of over 170 studies found places designed to encourage walking and cycling have lower rates of obesity and diabetes.</p>
<p>New Zealand <a href="https://www.nzta.govt.nz/resources/research/reports/457/">research</a> confirms overseas findings that cyclists are exposed to healthier air than car drivers. Segregated cycle lanes, even a small distance from traffic, <a href="https://doi.org/10.1016/j.jth.2016.10.002">improve air quality</a>.</p>
<p>Some people raise concerns about the safety of cycling, with data showing injury and fatality rates are higher for cyclists for each kilometre travelled. However, the more people cycle, the <a href="https://doi.org/10.1136/ip.9.3.205rep">safer it becomes</a> for all <a href="https://doi.org/10.1016/j.jth.2019.03.004">road users</a>. </p>
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Read more:
<a href="https://theconversation.com/will-the-budget-be-another-missed-opportunity-to-get-more-new-zealanders-out-of-their-cars-182428">Will the budget be another missed opportunity to get more New Zealanders out of their cars?</a>
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<h2>Build it and they will come</h2>
<p>The standard tool to inform transport decisions is the benefit-cost ratio. A <a href="https://tfl.gov.uk/corporate/publications-and-reports/economic-benefits-of-walking-and-cycling">UK government report</a> found the average benefit-cost ratio for walking and cycling projects delivers benefits 13 to 35 times the cost. </p>
<p>In New Zealand, transport planners estimate money spent on high-quality cycling infrastructure yields benefits between <a href="https://doi.org/10.1289/ehp.1307250">ten and 25 times the costs</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1480639497788219392"}"></div></p>
<p><a href="https://www.nzta.govt.nz/resources/research/reports/449/">Research</a> clearly shows the biggest barrier to cycling is perceived safety. Segregated cycleways are key to feeling safe, and infrastructure should be a mix of separate cycling facilities along roads with heavy traffic and at intersections, combined with extensive <a href="https://doi.org/10.1080/01441640701806612">traffic calming</a> of residential neighbourhoods, coupled with lower speed limits. </p>
<p>The physical separation from traffic comes at a higher cost and these expensive projects tend to attract the headlines, such as the <a href="https://www.stuff.co.nz/business/industries/127427327/nz-govt-to-spend-150m-on-abandoned-auckland-bike-bridge-alternative-crossing-options">proposed Auckland Harbour crossing</a>. </p>
<p>But many cycle routes use lower speeds and simple traffic management to create a cycle-friendly environment. Overall, cycleways are cheap compared with other transport infrastructure. </p>
<p>Evidence shows the number of people cycling is related to the quality and quantity of infrastructure provided. This has been <a href="https://doi.org/10.3141/1828-14">demonstrated in the US</a>, <a href="http://dx.doi.org/10.1136/bmjopen-2015-007593">UK</a>, <a href="https://ecf.com/news-and-events/news/new-danish-evidence-build-it-and-they-will-come-approach-works">Denmark</a> and most recently in a <a href="https://doi.org/10.1073/pnas.2024399118">European study</a> which examined the impact of temporary cycle infrastructure “popping up” as a COVID transport solution. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/3-in-4-people-want-to-ride-a-bike-but-are-put-off-by-lack-of-safe-lanes-172868">3 in 4 people want to ride a bike but are put off by lack of safe lanes</a>
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<hr>
<h2>Registration for cyclists</h2>
<p>The issue of whether cyclists should be registered or licensed has generated debate. The arguments for registration include: </p>
<ul>
<li><p>some form of registration would provide legal accountability</p></li>
<li><p>registration could raise funds to pay for cycle infrastructure</p></li>
<li><p>the process would include a cycling test to improve cyclists’ safety. </p></li>
</ul>
<p>The arguments against include: </p>
<ul>
<li><p>complication and confusion deciding who and what to include (children, tricycles, people who never ride on the road etc)</p></li>
<li><p>creating a barrier to people on low incomes who use a bike because they cannot afford a car</p></li>
<li><p>cyclists already paying for cycle infrastructure through their taxes. </p></li>
</ul>
<p>Ultimately, the main reasons against registration are bureaucracy and cost. The UK government concluded the cost and complexity of introducing such a system would significantly <a href="https://hansard.parliament.uk/lords/2019-03-18/debates/E7840EBD-E0A1-49DA-BDB1-E5EEB0D331E7/Debate">outweigh the benefits</a>. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/electric-cars-alone-wont-save-the-planet-well-need-to-design-cities-so-people-can-walk-and-cycle-safely-171818">Electric cars alone won’t save the planet. We'll need to design cities so people can walk and cycle safely</a>
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<h2>Cycleways and business</h2>
<p>One frequent complaint is that when cycleways replace on-street parking, businesses suffer. But research does not support this. </p>
<p>According to <a href="https://www.bloomberg.com/news/articles/2015-03-13/every-study-ever-conducted-on-the-impact-converting-street-parking-into-bike-lanes-has-on-businesses">Bloomberg CityLab</a>, multiple studies have reached a similar conclusion: replacing on-street parking with a bike lane has little to no impact on local business, and in some cases might even increase business. </p>
<p>Evidence from the US suggests people who travel by bike spend more. A <a href="https://www.canterbury.ac.nz/media/documents/oexp-science/geography/community-engagement/geog-309/2015/Travel-modes-and-expenditure-patterns---South-Colombo.pdf">small New Zealand study</a> supports this. </p>
<p>A <a href="https://doi.org/10.1371/journal.pone.0209090">study in London</a> found “an increase in cycling trips significantly contributes to the emergence of new local shops and businesses”. In New Zealand, there is some evidence a growing number of businesses <a href="https://www.stuff.co.nz/environment/climate-news/127765906/the-business-leaders-who-love-cycleways-and-public-transport">appreciate the benefits of cycleways</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/electric-cars-alone-wont-save-the-planet-well-need-to-design-cities-so-people-can-walk-and-cycle-safely-171818">Electric cars alone won’t save the planet. We'll need to design cities so people can walk and cycle safely</a>
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</em>
</p>
<hr>
<h2>Safety is the main barrier</h2>
<p>Poor weather is a barrier for some people, but not one of the most significant ones. Rates of commuter cycling do not vary dramatically by season. Cycling rates in Christchurch in winter are only <a href="https://cyclingchristchurch.co.nz/2019/04/21/guest-post-nobody-rides-bikes-in-winter-right/">10% lower</a> than during other times of the year. </p>
<p>While <a href="https://doi.org/10.1016/j.ypmed.2011.11.002">US research</a> has shown cycling declines in bad weather, a <a href="https://can.org.nz/resources/always-take-the-weather-with-you-effect-of-weather-on-cycling">New Zealand study</a> calculated that someone cycling to work every day in the main cities would only get wet six times a year.</p>
<p>What really stops some people hopping on a bike is that they don’t feel safe cycling in traffic. As Chris Boardman, an Olympic gold medallist cyclist and now commissioner for Active Travel England, said, we can tackle our biggest crisis and “all we have to do is make nicer places to live”.</p><img src="https://counter.theconversation.com/content/181053/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Kingham is seconded to the New Zealand Ministry of Transport as their Chief Science Advisor</span></em></p>Transport planners estimate money spent on high-quality cycling infrastructure yields benefits between ten and 25 times the costs.Simon Kingham, Professor, University of CanterburyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1451362020-09-08T11:56:08Z2020-09-08T11:56:08ZCoronavirus showed the way cities fund public transport is broken – here’s how it needs to change<figure><img src="https://images.theconversation.com/files/356808/original/file-20200907-18-t650st.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3926%2C2937&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Masked passengers on the London Underground. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-0724-male-female-passenger-1784024906">Yau Ming Low/Shutterstock</a></span></figcaption></figure><p>COVID-19 has triggered a crisis for public transport, as lockdowns caused its use to <a href="https://www.enotrans.org/article/covids-differing-impact-on-transit-ridership/">plummet by 70-90%</a> worldwide. Even as lockdowns ease, buses and trains can only carry <a href="https://www.ifs.org.uk/publications/14844">15% of the usual number of people</a> due to social distancing requirements – taking the “mass” out of mass transit for the foreseeable future. </p>
<p>For most cities, fewer users mean less fare revenue, triggering a budget crisis just as cities begin to recover from the upheaval caused by coronavirus. The scale of the shortfall is big. Transport for London estimates a <a href="https://www.telegraph.co.uk/business/2020/07/24/transport-london-seeks-second-bailout-funding-shortfall-widens/">£6.4 billion shortfall</a> in the next two years, and the Hong Kong Mass Transport Railway estimates a <a href="https://sg.news.yahoo.com/hong-kong-mtr-faces-hk-112159260.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS91cmw_c2E9dCZyY3Q9aiZxPSZlc3JjPXMmc291cmNlPW5ld3NzZWFyY2gmY2Q9JnZlZD0wYWhVS0V3alQ0NXlQMHR2cUFoWERtRndLSFpHRERBRVF4ZlFCQ0Q0d0F3JnVybD1odHRwcyUzQSUyRiUyRnNnLm5ld3MueWFob28uY29tJTJGaG9uZy1rb25nLW10ci1mYWNlcy1oay0xMTIxNTkyNjAuaHRtbCZ1c2c9QU92VmF3MXR4bFRXREJuaGJvcF80WDNsMWdaVg&guce_referrer_sig=AQAAACqUU-iApUFZCQIwDW4c-XP7QC1NnlS8Akjoyukl4nd3sLtr_DEnhAv0vDn8d4wX8t06G0pWbrPmgpO-03gp_oZSlJx3_ZRX1q6iC4iFNLVJxG01q5XOxWB4YxFcB4WBuVEw8W5CIbPNVzJf8eViJQNxez8xfAw3DE8Dvv63BtUO">HK$400m (£39m) net loss</a> for the first half of 2020. </p>
<p>In the midst of the crisis caused by lockdown, the large drop in users meant that cities around the world had to ask repeatedly for bailouts from central or state governments. Instead of these bailouts, permanent reform of public transport funding is needed to reduce reliance on fare revenue and guarantee central government contributions to support a decent level of service.</p>
<p>The social value of public transport also needs to be better understood, so it can meet the wide range of travel needs of the people that rely on it.</p>
<h2>Sustainable options</h2>
<p>Reliable and affordable public transport is essential to address climate change and improve social equity, but it needs sustainable sources of funding. Most of us don’t know exactly how our bus or train rides are paid for. It usually involves a mix of fare revenue, commercial taxes, tolls, and contributions from regional or national government. The mix differs a lot between cities, as shown in the charts below which lay out the operating revenue sources for New York, Paris and London.</p>
<p><a href="https://www.nytimes.com/2020/03/17/nyregion/coronavirus-nyc-subway-federal-aid-.html">Rescue packages</a> and <a href="https://www.citymetric.com/transport/whats-actually-uk-government-s-bailout-package-transport-london-5170">bailouts</a> helped to bridge funding gaps during lockdown, but the pandemic is showing major flaws in the way that cities fund transit. Reliance on income from fares and a lack of funding almost immediately caused service cuts, at the exact time when public transport was an essential service for key workers to travel to and from work.</p>
<p>COVID-19 also interrupted a boom in sustainable mobility. Lisbon saw a <a href="https://jornaleconomico.sapo.pt/en/news/562-million-to-november-public-transport-passengers-rose-17-in-the-metropolitan-area-of-%E2%80%8B%E2%80%8Blisbon-529987">17% increase</a> in public transport passengers after introducing a €40 (£36.20) monthly pass in 2019. Paris expanded its cycle network by 300km and saw a <a href="https://www.thelocal.fr/20191016/why-paris-cyclists-are-more-numerous-than-ever">54% increase</a> in cycling in 2019 alone, with <a href="https://www.forbes.com/sites/jeffmcmahon/2019/12/28/how-bike-lanes-are-transforming-paris/#23dccc86f620">5% fewer</a> car trips than in 2010. Even in New Zealand, one of the most car-dependent countries in the world, infrastructure upgrades saw the number of rail trips taken in Auckland <a href="https://www.greaterauckland.org.nz/2018/01/22/aucklands-rail-patronage-past-present-future/">increase by 72%</a> in five years. </p>
<p>However, this boom didn’t benefit everyone. In cities across North America and the UK with social housing shortages and market-driven housing systems, public transport improvements <a href="https://blogs.lse.ac.uk/politicsandpolicy/in-order-to-keep-mass-transit-accessible-we-must-understand-the-relationship-between-gentrification-and-public-transportation/">fuelled gentrification</a>, which in turn can displace <a href="https://www.theguardian.com/cities/2017/may/02/poverty-chic-working-class-urban-life-colonised">working class</a>, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6801918/">Black and minority ethnicity</a> residents. </p>
<p>There is an opportunity to go beyond short-term rescue packages to make permanent changes to transit funding, to address social inequalities and catalyse the shift to just and sustainable mobility. </p>
<h2>Social impacts</h2>
<p>In a post-COVID world, public transport isn’t dead, but it must adapt. Social distancing may have <a href="https://www.thetimes.co.uk/article/rush-hour-returns-traffic-up-in-major-cities-8d2tb737p">led to more driving</a>, although this is not inevitable and depends on whether cities <a href="https://www.nytimes.com/2020/08/10/nyregion/nyc-streets-parking-dining-busways.html">protect more road space</a> for walking, cycling and public transport. People are travelling less as firms shift to flexible working, students are learning online and more people are opting to <a href="https://www.cityam.com/the-future-of-urban-transport-is-human-powered/">walk or cycle</a> in cities worldwide.</p>
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<img alt="Empty train carriage." src="https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=583&fit=crop&dpr=1 600w, https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=583&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=583&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=733&fit=crop&dpr=1 754w, https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=733&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/356811/original/file-20200907-18-dsjbow.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=733&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An empty carriage on the Hong Kong MTR, May 2020.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hong-kong-may-20-2020-empty-1771489964">Andy Yang98/Shutterstock</a></span>
</figcaption>
</figure>
<p>However, it is possible to return to previous levels of public transport use, by encouraging different travel modes for those who travelled by car before the pandemic. Public transport is still critical for cutting carbon emissions, as well as an essential public service. </p>
<p>If public transport isn’t financially sustainable with existing funding models, we must question the alternative. Is it sustainable to allow a large-scale shift back to private vehicles? The social cost of inadequate or unaffordable public transport is clear. Research on <a href="https://www.poverty.ac.uk/report-transport/transport-poverty-hits-15-million-people">transport poverty</a> shows how unaffordable public transport or dependence on car ownership is a barrier for low-income households to get to work or to <a href="https://www.theguardian.com/society/2015/may/26/los-angeles-social-mobility-lack-public-transport">access healthcare services</a>.</p>
<h2>Changing the model</h2>
<p>To make sure public transport has sustainable funding in the coming years, the mix of funding from different sources and levels of government must change. </p>
<p>First, a decent baseline level of services must be guaranteed. Service cuts create huge social costs, but this is inevitable if funding relies heavily on fare revenue. Stable revenues like property taxes and commercial income can support this baseline. As local and regional governments must run balanced budgets, central government support is also an essential stopgap to prevent service cuts. </p>
<p>Second, affordable fares, or even <a href="https://www.bloomberg.com/news/articles/2020-06-08/-safe-streets-are-not-safe-for-black-lives">free transit</a>, helps to retain higher levels of use, and improve accessibility to jobs, education and public services for low-income residents. High fare increases put a burden on low-income households that often don’t have an alternative. </p>
<p>Lastly, we can make better use of funding for public transport by engaging with people who rely on transit to get around the city. Public transport cannot improve social equity without understanding the needs of everyone from office commuters to shift workers, Black, indigenous, and minority ethnicities – including parents, children, disabled and senior citizens. This is under threat if funding is not sustainable after COVID-19.</p><img src="https://counter.theconversation.com/content/145136/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jenny McArthur has consulted to New Zealand Transport Agency and Auckland Transport. She has received research funding from Auckland Council, EPSRC and the European Commission. </span></em></p><p class="fine-print"><em><span>Emilia Smeds receives funding from EPSRC and the European Commission. </span></em></p><p class="fine-print"><em><span>Rosalie Singerman Ray is affiliated with the Fare Free Transit Coalition in New York City and has conducted research on the possibilities for fare free transit in the U.S. for political candidates. </span></em></p>Instead of repeated bailouts, permanent reform of public transport funding is needed.Jenny McArthur, Lecturer in Urban Infrastructure and Policy, UCLDr Emilia Smeds, Researcher in Urban Governance and Mobility, UCLRosalie Singerman Ray, Postdoctoral Research Associate in Transportation Technology and Society, University of ConnecticutLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1237572019-10-14T19:08:41Z2019-10-14T19:08:41ZRail works lift property prices, pointing to value capture’s potential to fund city infrastructure<p><a href="http://www.rtbu.org.au/innovative_funding_models">Value capture</a> has been <a href="https://theconversation.com/paying-for-infrastructure-means-using-land-value-capture-but-does-it-also-mean-more-tax-58731">advocated</a> as an innovative way to fund infrastructure, including <a href="https://www.afr.com/property/malcolm-turnbulls-value-capture-plan-for-infrastructure-splits-developers-20160429-goic5m">by the Australian government</a>. However, its <a href="https://theconversation.com/value-capture-a-good-idea-to-fund-infrastructure-but-not-easy-in-practice-74545">effectiveness in Australia has been questioned</a>. Our research, based on railway <a href="https://levelcrossings.vic.gov.au/">level crossing removals in Victoria</a>, suggests infrastructure projects do lead to higher property values, which could be captured to contribute towards project funding. </p>
<p>At sites close to where level crossings were removed, property values increased by as much as a quarter. This highlights the opportunity to use a value capture model. </p>
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Read more:
<a href="https://theconversation.com/explainer-what-is-value-capture-and-what-does-it-mean-for-cities-58776">Explainer: what is ‘value capture’ and what does it mean for cities?</a>
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<h2>What’s the idea of value capture?</h2>
<p>Infrastructure investment improves connectivity, leading to higher land or property values in areas that benefit from this. Value capture taps into this increased value – usually using some form of taxation – to help finance the infrastructure responsible for the increase.</p>
<p>Value capture has been widely used overseas. In the <a href="https://www.infrastructure.gov.au/cities/smart-cities/plan/files/Smart_Cities_Plan.pdf">United Kingdom and Hong Kong</a>, it has proved to be an effective way to fund major infrastructure. </p>
<p>This approach is <a href="https://www.prosper.org.au/land-value-capture/value-capture-a-historical-perspective/">not common in Australia</a>, where most infrastructure projects are government-funded. Gold Coast Light Rail was <a href="https://theconversation.com/gold-coast-light-rail-study-helps-put-a-figure-on-value-captures-funding-potential-65084">developed with the aid of a levy on ratepayers</a>. </p>
<p>However, a lack of funding means many large-scale infrastructure projects are <a href="https://www.infrastructure.gov.au/cities/smart-cities/plan/files/Smart_Cities_Plan.pdf">not being funded at the same time</a>. This highlights the need to find innovative ways to fund infrastructure, which includes exploring the potential benefits of value capture. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/why-gold-coast-light-rail-was-worth-it-its-about-more-than-patronage-78190">Why Gold Coast light rail was worth it (it's about more than patronage)</a>
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<p>Financing infrastructure by value capture has been <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/ITC/TransportConnectivity/Report_1/section?id=committees%2Freportrep%2F024018%2F24073">widely discussed</a> and was <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/ITC/TransportConnectivity/Report_1/section?id=committees%2freportrep%2f024018%2f24073">considered by a parliamentary inquiry</a>. The concept features prominently in the federal government’s <a href="https://www.infrastructure.gov.au/cities/smart-cities/plan/files/Smart_Cities_Plan.pdf">Smart Cities Plan</a> and would <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/ITC/TransportConnectivity/Report_1/section?id=committees%2freportrep%2f024018%2f24073">complement the Smart Cities vision for 30-minute cities</a>. </p>
<h2>Would it work in our low-density cities?</h2>
<p>But there is a debate over how well this model would work in Australia. It’s argued the low-density nature of Australian cities would result in a lower level of value creation to be captured. Nevertheless, little empirical evidence is available on value creation in Australia. </p>
<p>Despite clear policy interest in how much land values increase following a new rail investment, and to what extent this can be attributed to the investment, much remains to be explained. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/value-capture-a-good-idea-to-fund-infrastructure-but-not-easy-in-practice-74545">Value capture: a good idea to fund infrastructure but not easy in practice</a>
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<p>Our research based on the <a href="https://levelcrossings.vic.gov.au/">level-crossing removal project</a> in Victoria found property values near each site could be enhanced significantly. The state government began the project in 2015. It aims to eliminate 75 dangerous and congested level crossings to improve traffic flows across metropolitan Melbourne. Our yet-to-be-published research is to be presented at the <a href="http://www.prres.net/index.htm?http://www.prres.net/Conference.htm">Pacific Rim Real Estate Society annual conference</a>.</p>
<p>Importantly, this is one of the largest rail infrastructure projects in the state’s history. As of December 2017, the estimated budget for removing 50 level crossing sites was <a href="https://www.theage.com.au/national/victoria/level-crossing-removal-program-poor-value-for-money-auditorgeneral-andrew-greaves-20171214-h04ed0.html">A$8.3 billion</a>. The ultimate cost is likely to be greater as another 25 sites were added to the project in 2018 and 2019. </p>
<p>The work has caused inconvenience to local residents during construction and has limited capacity to ease traffic congestion. The pace of progress and budget blowouts “present risks to achieving value for money”, the state auditor-general <a href="https://www.audit.vic.gov.au/sites/default/files/2017-12/20171213-Level-Crossings.pdf">reported</a>. </p>
<p>Despite the temporary inconvenience during the construction phase, transport connectivity will be enhanced once the project is complete. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-sky-rail-saga-can-big-new-transport-projects-ever-run-smoothly-54383">The 'sky rail' saga: can big new transport projects ever run smoothly?</a>
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<h2>House values have risen, but variably</h2>
<p>To offer some empirical evidence on the benefits created by level crossing removal projects enhancing housing value, we considered four sites in Bayswater, Mitcham, Glen Iris and St Albans. </p>
<p>We found the completion of a level crossing removal leads to an increase of 9% in house value, on average, within the area surrounding the site. This positive impact diminishes as the distance from the site increases. It vanishes beyond 1,400 metres. </p>
<p>We also found the impact of level crossing removals varies from site to site. House values in surrounding affected areas increased by 8.81% in Bayswater, 28.6% in Glen Iris, and 10.5% in St Albans, but by only 2.1% in Mitcham. </p>
<p>Comparable evidence is found for units in these areas: prices increased by 2.35% in Bayswater, 7.3% in Glen Iris and 6.53% in St Albans, but there was no significant increase for Mitcham.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/295933/original/file-20191008-128652-18nnxo5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Locations of the four level crossing study sites in Melbourne.</span>
<span class="attribution"><span class="license">Author provided</span></span>
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<strong>
Read more:
<a href="https://theconversation.com/paying-for-infrastructure-means-using-land-value-capture-but-does-it-also-mean-more-tax-58731">Paying for infrastructure means using 'land value capture', but does it also mean more tax?</a>
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<h2>Key takeouts</h2>
<p>There are three takeouts from our research.</p>
<p>1) The level crossing removal project in Victoria did lead, in general, to higher property values. This highlights the need for a comprehensive plan aimed at maximising value capture opportunities. </p>
<p>2) Value capture is potentially a feasible model despite the low-density nature of Australian cities. However, its likely effectiveness varies considerably with location. This reinforces the importance of a comprehensive plan. </p>
<p>3) Given infrastructure is critical for urban development, governments should consider using value capture to fund infrastructure in a way that helps meet urban development needs and reduces the shortfall of dwellings in Australia.</p><img src="https://counter.theconversation.com/content/123757/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Value capture depends on infrastructure increasing the value of affected areas in the first place. Victoria’s level crossing removal project shows the impact on property values can be significant.Chyi Lin Lee, Associate Professor of Property, UNSW SydneyJerry Liang, Lecturer in Property and Real Estate, Deakin UniversityKang Koo, Lecturer in Property and Real Estate, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1151382019-05-14T20:15:44Z2019-05-14T20:15:44ZTransport promises for election 2019: the good, the bad and the downright ugly<p>No matter who wins Saturday’s federal election, you can expect to see more cranes on the skyline and hi-viz vests on the roadside. Both major parties are promising to spend big on transport infrastructure: A$42 billion for the Coalition and A$49 billion for Labor. However, many of the favoured projects are unlikely to be completed for years or even decades to come. </p>
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Read more:
<a href="https://theconversation.com/we-hardly-ever-trust-big-transport-announcements-heres-how-politicians-get-it-right-101246">We hardly ever trust big transport announcements – here's how politicians get it right</a>
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<h2>What’s being promised, and where?</h2>
<p>The types of project each party is promising reflect a now-familiar pattern seen in the recent <a href="https://theconversation.com/how-much-will-voters-pay-for-an-early-christmas-eight-charts-that-explain-victorias-transport-election-106782">Victorian</a> and <a href="https://theconversation.com/how-the-nsw-election-promises-on-transport-add-up-112531">New South Wales</a> elections. The Coalition will outspend Labor on roads; Labor will outspend the Coalition on public transport.</p>
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<a href="https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=505&fit=crop&dpr=1 600w, https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=505&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=505&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=634&fit=crop&dpr=1 754w, https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=634&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=634&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>There’s also a story in the details of where the parties are promising to spend. In Victoria, where the Coalition suffered heavy losses in last October’s state election, <a href="https://www.theage.com.au/federal-election-2019/some-seats-are-better-than-others-coalition-sandbagging-key-electorates-with-taxpayer-funds-20190501-p51j6b.html">the federal Coalition has been busy “sandbagging”</a> key seats. Until last weekend, the Coalition had been promising much more than Labor.</p>
<p>Announcements on Sunday changed all that. While the Coalition <a href="https://www.theaustralian.com.au/nation/4bn-bid-to-unlock-road-link-box/news-story/1c4254f3a80bc85dc11e068b9bff62a9">upped its commitment to the East West Link to A$4 billion</a>, this was dwarfed by Labor’s <a href="https://www.abc.net.au/news/2019-05-12/shorten-morrison-pledge-cash-for-melbourne-infrastructure/11105094">A$10 billion pledge for the Suburban Rail Loop</a>. Victoria now stands as the key battleground for transport promises. </p>
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Read more:
<a href="https://theconversation.com/east-west-link-shows-miserable-failure-of-planning-process-40232">East-West Link shows miserable failure of planning process</a>
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<p>Labor is also writing bigger cheques than the Coalition in Queensland, where it <a href="https://www.abc.net.au/news/2019-04-12/federal-election-queensland-battleground/10975570">hopes to make big gains</a>. </p>
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<a href="https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=505&fit=crop&dpr=1 600w, https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=505&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=505&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=634&fit=crop&dpr=1 754w, https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=634&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=634&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<h2>There’s some agreement on the big stuff</h2>
<p>Despite their different ideologies and at-risk electorates, there is still much common ground between the parties. Almost one in three of the projects and funding packages that have attracted promises of at least A$50 million are backed by both the Coalition and Labor. Each party has promised almost A$24 billion for these “bilateral” projects – that’s more than half of the Coalition’s total promised transport infrastructure spending and almost half of Labor’s.</p>
<p>The parties are more likely to agree on big projects than small. Bilateral commitments make up almost half of all promises worth at least A$500 million, but less than a third of those below that threshold. For the very largest projects, the level of agreement is somewhere in between – the Coalition and Labor agree on four of the 11 projects attracting commitments of more than A$1 billion. </p>
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<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1044051590867378178"}"></div></p>
<h2>But voters are forced to make risky choices, again</h2>
<p>With so much cash on the table, will these vast riches be spent on the right things? </p>
<p>More money for roads and public transport probably sounds fine to most Australians, whether they’re navigating potholed rural roads, stuck behind trucks on regional highways, drumming the steering wheel in clogged city streets, or calling in late on delayed suburban trains. </p>
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<p>
<em>
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Read more:
<a href="https://theconversation.com/congestion-busting-infrastructure-plays-catch-up-on-long-neglected-needs-114598">Congestion-busting infrastructure plays catch-up on long-neglected needs</a>
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<p>But are the projects of national significance and therefore worthy of Commonwealth attention? And can they be relied on to return a benefit larger than their cost?</p>
<p>For too many projects, the answers are no and no. Infrastructure Australia (IA) publishes a <a href="https://www.infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx">list of national priorities</a> and evaluates business cases for projects that are “<a href="https://www.infrastructureaustralia.gov.au/about/files/IA-Statement-of-Intent-2017-19.pdf">nationally significant or where Commonwealth funding of A$100 million or more is sought</a>”. Most of the commitments above A$100 million in this campaign do not have IA-approved business cases. </p>
<p>Some projects are under evaluation, such as a new bridge in Nowra on the NSW south coast, but the two parties should have waited for IA’s assessment before committing.</p>
<p>Worse still, many promised projects are not even on the national priority list.</p>
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<p>For projects attracting commitments of less than A$100 million, most are best left to state governments. The Commonwealth should stick to projects that are important to more than one state or are particularly important to the national economy. </p>
<p>Fixing <a href="https://www.barossaherald.com.au/story/5990686/budget-48-million-roundabout-at-kroemers-crossing/">regional</a> and <a href="https://anthonyalbanese.com.au/media-release-labor-will-fix-one-of-adelaides-worst-intersections-saturday-9-march-2019">suburban intersections</a> is important, but it’s hardly of national significance. When federal parties get involved, it starts to smell like pork-barrelling.</p>
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Read more:
<a href="https://theconversation.com/missing-evidence-base-for-big-calls-on-infrastructure-costs-us-all-99080">Missing evidence base for big calls on infrastructure costs us all</a>
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<h2>Some promises are inexcusable</h2>
<p>Throwing taxpayer money at boondoggles is poor governance. Far worse is flagrantly ignoring independent advice and burning cash on projects that we know don’t stack up. Before the 2016 federal election, Grattan Institute reported on the <a href="https://theconversation.com/election-2016-will-the-infrastructure-promises-meet-australias-needs-61140">outrageous Princes Highway duplication between Winchelsea and Colac</a> in Victoria’s Western District. The Coalition promised this project even though IA determined that it would return only eight cents of value for every dollar spent.</p>
<p>Three years on, lessons still need to be learnt. Labor has committed A$50 million this election to the <a href="https://www.macarthuradvertiser.com.au/story/6092086/labor-pledges-50-million-to-finish-maldon-dombarton-rail-link-project/">Maldon-Dombarton rail link</a> in NSW’s Illawarra region. This <a href="https://www.infrastructureaustralia.gov.au/projects/files/Maldon-to-Dombarton-summary.pdf">A$806 million project got the thumbs-down</a> in 2017 from IA, which stated that “the project would not justify its costs and would impose a net cost on the Australian economy”. </p>
<p>In exceptional cases, governments may want to fund projects with costs outweighing benefits on equity grounds, <a href="https://grattan.edu.au/wp-content/uploads/2019/04/916-Commonwealth-Orange-Book-2019.pdf#page=63">such as to provide a minimum level of service for rural communities</a>. It is hard to make that case for a commercial freight rail link. </p>
<p>Every dud project built cannibalises a worthy one. Our politicians should stop donning hardhats and promising infrastructure before they’ve done their homework.</p><img src="https://counter.theconversation.com/content/115138/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities.</span></em></p>The major parties are promising tens of billions of dollars in transport spending, but only a handful of projects are on Infrastructure Australia’s national priority list with approved business cases.Greg Moran, Senior Associate, Grattan InstituteJames Ha, Graduate Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1135712019-04-09T02:32:23Z2019-04-09T02:32:23ZBusiness-as-usual record on transport leaves next government plenty of room to improve<p><em>This article is part of a <a href="https://theconversation.com/au/topics/coalition-record-2019-69102">series</a> examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.</em></p>
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<p>Election season means transport season: just as the recent <a href="https://theconversation.com/how-the-nsw-election-promises-on-transport-add-up-112531">New South Wales</a> and <a href="https://theconversation.com/how-much-will-voters-pay-for-an-early-christmas-eight-charts-that-explain-victorias-transport-election-106782">Victorian</a> elections gave us massive new transport promises, so too is the federal government relying on the enduring popularity of new roads and rail. But look beyond the rhetoric and the past three years have been largely business as usual. That leaves plenty of room for the next government, of whatever colour, to take a fresh look at how transport promises are made – and plenty of room to improve.</p>
<p>Last week’s federal budget committed to transport expenditure of <a href="https://www.budget.gov.au/2019-20/content/bp1/download/bp1_final.pdf">A$7.4 billion in 2019-20</a>, and A$33 billion over the four-year forward estimates period. </p>
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Read more:
<a href="https://theconversation.com/budget-transport-spending-is-about-par-for-the-course-but-the-pattern-is-unusual-114597">Budget transport spending is about par for the course, but the pattern is unusual</a>
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<p>The government claims it’s spending a <a href="https://www.budget.gov.au/2019-20/content/community.htm#transport">record A$100 billion</a> over a decade. Yet the <a href="https://www.billshorten.com.au/2018_budget_reply_canberra_thursday_10_may_2018">opposition claims</a>: “Across the four years of this budget, Commonwealth investment in infrastructure actually <em>falls</em>, from A$8 billion to A$4.5 billion.” And <a href="https://www.afr.com/business/infrastructure/coalition-needs-to-fill-infrastructure-shortfall-20190329-p518u0">Infrastructure Partnerships Australia says</a> recent budgets are down on the long-term average by about A$11 billion over the forward estimates. </p>
<h2>How much is the government actually spending?</h2>
<p>With such polarised views, who are we to believe?</p>
<p>In reality, the <a href="https://theconversation.com/budget-transport-spending-is-about-par-for-the-course-but-the-pattern-is-unusual-114597">expenditure for 2019-20</a> is absolutely normal. At 0.37% of GDP, it’s close to the midpoint of spending on transport under treasurers Scott Morrison, Joe Hockey and Wayne Swan. In each of the past ten budgets, annual transport spending in the year following the budget has been <a href="https://theconversation.com/budget-transport-spending-is-about-par-for-the-course-but-the-pattern-is-unusual-114597">0.26-0.53% of GDP</a>.</p>
<p>What is different is the extent of promises that lie beyond the forward estimates period. The move to a <a href="https://buildingourfuture.gov.au/assets/documents/10_Year_Infrastructure_Pipeline.pdf">ten-year pipeline of promises</a> might be fine in theory, but an interested elector can rely only on what’s in the budget papers. And from that they would conclude there’s nothing unusual to see here.</p>
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Read more:
<a href="https://theconversation.com/500m-for-station-car-parks-other-transport-solutions-could-do-much-more-for-the-money-114908">$500m for station car parks? Other transport solutions could do much more for the money</a>
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<h2>A new enthusiasm for equity investments</h2>
<p>All these figures concern grants to state governments, which are responsible for transport networks. But, in addition to these grants, the federal government has developed an enthusiasm for funding projects “off-budget”. In the past two years, the Commonwealth made <a href="https://www.budget.gov.au/2018-19/ministerial-statements/2018-19-regional-ministerial-budget-statement.pdf">equity investments</a> of A$9.3 billion in <a href="https://inlandrail.artc.com.au/">Inland Rail</a> and A$5.3 billion in <a href="https://westernsydneyairport.gov.au/">Western Sydney Airport</a>.</p>
<p>The <a href="https://treasury.gov.au/publication/charter-of-budget-honesty-policy-costing-guidelines__trashed/appendix-a-costing-of-measures-and-updating-estimates__trashed">Charter of Budget Honesty</a> states that an investment can be treated as an off-budget equity injection only if the government has a “reasonable expectation” of recovering the investment. In other words, the entity must be expected to make a positive return over time.</p>
<p>But this gives governments a lot of latitude. A positive rate of return is not the same as a commercial one. And there seems little likelihood of commercial returns in either case. </p>
<p>For Inland Rail, it’s no secret that the Australian Rail Track Corporation will <a href="https://www.afr.com/news/economy/barnaby-joyces-inland-rail-revenues-wont-cover-capital-cost-artc-ceo-says-20180219-h0wbvw">never be asked to repay the A$9.3 billion</a>, even when project revenues start to flow in 2025. Let’s hope the finance minister is right to insist there’s no prospect the project will need even more taxpayer support, despite the risks identified in the <a href="https://www.budget.gov.au/2018-19/bp1/bp1.pdf">budget papers themselves</a> and by the Commonwealth <a href="https://www.anao.gov.au/sites/default/files/ANAO_Report_2017-2018_9.pdf">Auditor-General</a>. With no expectation of repayment, there is no practical difference between this “equity investment” and a grant. </p>
<p>For Western Sydney Airport, the government decided to build the airport itself after Sydney Airport Corporation declined its right to build it. The airport operator said the offer as it stood was “<a href="https://www.afr.com/business/infrastructure/airports/badgerys-creek-deeply-uneconomic-sydney-airport-ceo-kerrie-mather-20170216-gueiq6">deeply uneconomic</a>”. It cited operational, traffic, financial and political risks. </p>
<p>So it’s hard to share the confidence of the then treasurer (and now prime minister), Scott Morrison, when <a href="https://www.afr.com/news/politics/govt-set-to-build-airport-rail-link-with-good-debt-20170427-gvtcmy">he said</a> the new airport will “generate an income stream that’s going to pay for itself”.</p>
<p>In both cases, if a future government ends up writing down the fair value of these assets, this will appear on the balance sheet as a change to “other economic flows”. It won’t be separately identified. Nor will the write-down show up in the underlying cash balance figure that the media spotlight highlights on budget night. </p>
<p>The unavoidable conclusion is that pushing transport spending off-budget seriously diminishes not only the discipline that comes from competing for funds through the budget process, but also transparency in how public money is being spent.</p>
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Read more:
<a href="https://theconversation.com/a-closer-look-at-business-cases-raises-questions-about-priority-national-infrastructure-projects-94489">A closer look at business cases raises questions about 'priority' national infrastructure projects</a>
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<h2>A foray into road pricing is stillborn</h2>
<p>In November 2016 the government took an unusually bold step: <a href="https://transportinfrastructurecouncil.gov.au/publications/files/Australian_Government_Response_to_Australian_Infrastructure_Plan_November_2016.pdf">it committed</a> to holding an inquiry into road-user charging. The then minister for urban infrastructure, Paul Fletcher, was in good company. His commitment to commission a review led by an eminent Australian was in response to a <a href="https://infrastructureaustralia.gov.au/policy-publications/publications/files/Australian_Infrastructure_Plan.pdf">2016 recommendation</a> from Infrastructure Australia, which invoked a similar <a href="http://competitionpolicyreview.gov.au/files/2015/03/Competition-policy-review-report_online.pdf">recommendation in the 2015 Harper Review</a> of competition policy, which in turn referred to a <a href="https://www.pc.gov.au/__data/assets/pdf_file/0003/137280/infrastructure-volume1.pdf">2014 Productivity Commission recommendation</a>. And the backdrop to all these reports was a <a href="http://taxreview.treasury.gov.au/content/downloads/final_report_part_1/00_afts_final_report_consolidated.pdf">recommendation of the 2010 Henry Tax Review</a>.</p>
<p>But time passed and no eminent person was appointed. More time passed, ministers moved portfolio, and no eminent person was appointed. Finally, in October 2018, current minister Michael McCormack <a href="https://www.afr.com/news/politics/deputy-pm-michael-mccormack-shelves-inquiry-into-road-pricing-20181004-h1688d">declined to commit</a> to the inquiry.</p>
<p>An inquiry is no more than an inquiry, but a non-inquiry is a commitment to the status quo. Roads funding and roads investment are serious topics, and many <a href="https://www.pc.gov.au/news-media/speeches/infrastructure-pricing-reform/infrastructure-pricing-reform.pdf">commentators have argued</a> that they are the laggards of regulatory reform. </p>
<p>A change to how road use is funded could significantly alter which roads are funded, what maintenance is done, and how networks are managed. It appears to have been all too much for this government. This task awaits a future government.</p>
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Read more:
<a href="https://theconversation.com/delay-in-changing-direction-on-how-we-tax-drivers-will-cost-us-all-87931">Delay in changing direction on how we tax drivers will cost us all</a>
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<p>The alternative government’s most important promises aren’t the sexy ones about electric vehicles. They are <a href="https://www.alp.org.au/media/1539/2018_alp_national_platform_constitution.pdf">Labor’s promises</a> that Infrastructure Australia should assess projects before the decision to invest, and to release assessed business cases. These promises may sound worthy and a little dull, but in reality they are big and welcome commitments. </p>
<p>Less obvious is how to square them with federal Labor’s promise to advance high-speed rail, or the promise to <a href="https://www.billshorten.com.au/getting_melbourne_s_suburban_rail_loop_on_a_faster_track_sunday_14_october_2018">work with the Victorian premier “to deliver the visionary Melbourne Suburban Rail Loop”</a>. Both of these are massively expensive projects with nothing approaching an assessed and publicly available business case.</p>
<p>It would be a significant improvement if whichever party wins government next month were to commit to, and follow through on, careful assessment of transport gaps and problems, consideration of the various feasible solutions, and rigorous evaluation of the preferred approach. And it’s not enough just to do this; it should be done in public.</p>
<p>Let’s hope.</p>
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<strong>
Read more:
<a href="https://theconversation.com/missing-evidence-base-for-big-calls-on-infrastructure-costs-us-all-99080">Missing evidence base for big calls on infrastructure costs us all</a>
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<img src="https://counter.theconversation.com/content/113571/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities.
</span></em></p>The Coalition’s infrastructure budgets over this term of government have been around the midpoint of government investment over the past decade. But how projects are chosen leaves a lot to be desired.Marion Terrill, Transport and Cities Program Director, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1050512018-10-29T19:10:37Z2018-10-29T19:10:37ZInfrastructure splurge ignores smarter ways to keep growing cities moving<p><em>This week we’re exploring the state of nine different policy areas across Australia’s states, as detailed in Grattan Institute’s <a href="https://grattan.edu.au/?post_type=report&p=6974&preview=true">State Orange Book 2018</a>. Read the other articles in the series <a href="https://theconversation.com/au/topics/state-of-the-states-2018-61464">here</a></em>.</p>
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<p>It’s already started. We may be only entering the formal election campaign in Victoria <a href="https://en.wikipedia.org/wiki/Victorian_state_election,_2018">tonight</a>, but massive transport announcements are in full swing from the state Labor government, the Coalition opposition and the Greens. And with an election due next March in New South Wales, we can be sure the major parties in that state won’t be far behind.</p>
<p>Expanding the capacity of the transport network always gets far more attention than other ways of managing a fast-growing population. In reality, though, governments have a far bigger menu of options to keep Australia’s capital cities moving – and they should use them all.</p>
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Read more:
<a href="https://theconversation.com/we-hardly-ever-trust-big-transport-announcements-heres-how-politicians-get-it-right-101246">We hardly ever trust big transport announcements – here's how politicians get it right</a>
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<h2>Big spending promises all round</h2>
<p>The swag of promises in Victoria to date has been big on rail. The Andrews government would, if returned, build a 90km <a href="https://static1.squarespace.com/static/5b46af5a55b02cea2a648e93/t/5b84f70f88251b6aa6f607b8/1535440660600/180828-Underground-Suburban-Rail-Loop-To-Connect-Victoria.pdf">suburban rail loop</a> connecting all major suburban lines. Work is to start in 2022 at an announced cost of A$50 billion. </p>
<p>A Matthew Guy-led Coalition government would, if elected, build <a href="https://vic.liberal.org.au/News/2018-10-03/high-speed-rail-for-victoria">high-speed-rail to regional cities</a>. The first trains would come into operation within four years, at an announced cost of A$15-19 billion. </p>
<p>And the Greens? They would <a href="http://www.railpage.com.au/news/s/greens-call-for-more-melbourne-trains">upgrade suburban rail signalling and add 100 extra high-capacity trains</a>, at a cost of A$8.5 billion.</p>
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Read more:
<a href="https://theconversation.com/missing-evidence-base-for-big-calls-on-infrastructure-costs-us-all-99080">Missing evidence base for big calls on infrastructure costs us all</a>
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<p>If talkback radio is any guide, <a href="https://www.abc.net.au/news/2018-10-22/melbourne-50-billion-dollar-rail-loop-planning-questioned/10385702">these plans are popular</a>. People love the idea of a magnificent new rail system that perhaps they’ll use or, more likely, that they hope all those people who currently clog up the roads will use instead. After all, Melbourne is a very car-dependent city. And, with <a href="https://grattan.edu.au/wp-content/uploads/2018/10/909-Remarkably-adaptive-Australian-cities-in-a-time-of-growth-high-res.pdf">three-quarters of all the jobs dispersed all over the city</a>, that’s unlikely to change much any time soon.</p>
<p>People also love big new infrastructure because it feels as though it comes for free. While a politician may have to pick just one from a menu of large projects, voters don’t have to confront this kind of choice.</p>
<p>Rather, we face the difference between a new station or service near our home, or no such new station or service. If you are the beneficiary of a new rail service, you may support the candidate promising it. By contrast, the losers are dispersed, and it’s hard to get too agitated about services we never had.</p>
<h2>Look more closely at what is happening</h2>
<p>But new transport infrastructure is far from the only way to cope with population growth. Even though Melbourne has had extremely high population growth, <a href="https://grattan.edu.au/wp-content/uploads/2018/10/909-Remarkably-adaptive-Australian-cities-in-a-time-of-growth-high-res.pdf">averaging 2.3% a year</a> over the five years to 2016, <a href="https://theconversation.com/our-fast-growing-cities-and-their-people-are-proving-to-be-remarkably-adaptable-103992">commuting distances and times have remained remarkably stable</a>. </p>
<p>The median commute distance for Melburnians barely increased, from 8.6km to 8.7km, over the five years to the most recent Census in 2016. The median commute time has remained at 30 minutes each way since 2007.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=454&fit=crop&dpr=1 600w, https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=454&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=454&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=571&fit=crop&dpr=1 754w, https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=571&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/238255/original/file-20180927-48647-130ec46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=571&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Notes: Working-age respondents to the Hilda Survey report commuting times for a typical week. These are converted here to times for an individual trip. BITRE (2016) finds that the travel times HILDA respondents report closely match other measures of travel times, further supported by Grattan analysis of Transport for Victoria (2018).</span>
<span class="attribution"><span class="source">Source: Grattan analysis of HILDA (2016)</span>, <span class="license">Author provided</span></span>
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Read more:
<a href="https://theconversation.com/our-fast-growing-cities-and-their-people-are-proving-to-be-remarkably-adaptable-103992">Our fast-growing cities and their people are proving to be remarkably adaptable</a>
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<p>These stable commute times and distances have coincided with a period of only limited new infrastructure construction. Victoria’s additions – <a href="https://www.audit.vic.gov.au/report/assessing-benefits-regional-rail-link-project?section=32786">Regional Rail Link</a>, <a href="https://www.theage.com.au/national/victoria/auditor-hits-2b-road-project-20110601-1fgpe.html">Peninsula Link</a> and the <a href="https://infrastructurepipeline.org/project/m80-ring-road-upgrade/">M80 Ring Road</a> – are modest compared to Queensland and NSW’s. The road stock in Melbourne <a href="https://grattan.edu.au/wp-content/uploads/2018/10/909-Remarkably-adaptive-Australian-cities-in-a-time-of-growth-high-res.pdf">increased by 4.3% over the five years to 2015, significantly less than the population increase of 11.9%</a>. </p>
<p>The A$1.3 billion <a href="http://citylinktullawidening.vic.gov.au/about">CityLink Tullamarine widening project</a> finished recently, and the A$8.3 billion <a href="https://levelcrossings.vic.gov.au/">level crossing removal project</a> is more than half-completed, but these projects are too new to explain the remarkable stability of commutes over the period of booming population.</p>
<p>Despite only modest new infrastructure, people have adapted. Some have changed job or worksite, and working from home is on the rise. Some people moved house, or even left the city. And some changed their method of travel, leaving the car at home and catching the train, tram or bus to work. Other people simply accepted a longer commute, at least for a time, and particularly if they were earning more. </p>
<p>Of course, not everyone is better off when the population grows rapidly. Some people elect not to take a new job that’s too far from home; some pay higher rent, or cannot afford a place they once could have. But the lesson from Melbourne is that people are not hapless victims of population growth, depending for their well-being on governments building the next freeway or rail extension.</p>
<h2>So what are the best ways to help cities cope?</h2>
<p>The Grattan Institute’s <a href="https://grattan.edu.au/report/state-orange-book-2018/">State Orange Book 2018</a> recommends that governments work with, not against, the adaptations that people make. Here are three ways state governments can help:</p>
<ol>
<li>They should stop making it so hard to move house, by replacing stamp duty with a broad-based land tax. </li>
<li>They should stop locking new residents out of their preferred locations, by combining a relaxation of zoning restrictions on residential density with clear assignment of on-street parking rights.</li>
<li>The incoming governments of Victoria and NSW should introduce time-of-day road congestion charges in the most congested parts of Melbourne and Sydney (offset by a cut to vehicle registration fees), with the funds earmarked for public transport improvements.</li>
</ol>
<p>Let’s see what the vying parties can do.</p><img src="https://counter.theconversation.com/content/105051/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities. The State Orange Book 2018, from which this article draws, was supported by a grant from the Susan McKinnon Foundation.
</span></em></p>In the election bidding wars, parties commit billions to transport projects, often before all the work needed to justify these has been done. More cost-effective alternatives hardly get a look-in.Marion Terrill, Transport Program Director, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/990802018-07-09T20:00:03Z2018-07-09T20:00:03ZMissing evidence base for big calls on infrastructure costs us all<p>When the case for big transport projects is made without due analysis, we risk building the wrong projects. The result is we waste billions of dollars and rob ourselves of the infrastructure our booming cities need to be more liveable. Given <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/3218.0">how fast our big cities are growing</a>, we simply can’t afford to make decisions based on limited or misleading information. Yet this keeps happening.</p>
<p>Two stark examples – proposed rail links to <a href="https://theconversation.com/western-sydney-aerotropolis-wont-build-itself-a-lot-is-riding-on-what-governments-do-97462">Western Sydney</a> and <a href="https://theconversation.com/airport-rail-link-can-open-up-new-possibilities-for-the-rest-of-melbourne-80203">Melbourne</a> airports and <a href="https://theconversation.com/city-wide-trial-shows-how-road-use-charges-can-reduce-traffic-jams-86324">road congestion charges</a> – illustrate the problem in different ways. </p>
<p>The proposed airport rail links show how governments continue to make huge taxpayer commitments to projects before they are able to articulate the costs, benefits and risks. </p>
<p>In the case of proposed road congestion charges we see an important reform languishing. This is because when reforms rest on obscure or unclear analysis they inevitably fail to generate public support.</p>
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<p><em><strong>Read more:</strong> <a href="https://theconversation.com/western-sydney-aerotropolis-wont-build-itself-a-lot-is-riding-on-what-governments-do-97462">Western Sydney Aerotropolis won’t build itself – a lot is riding on what governments do</a></em>
<em><a href="https://theconversation.com/airport-rail-link-can-open-up-new-possibilities-for-the-rest-of-melbourne-80203">Airport rail link can open up new possibilities for the rest of Melbourne</a></em></p>
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<h2>Funding pledges don’t wait for a business case</h2>
<p>In the case of the recently announced multi-billion-dollar investments in airport rail in <a href="https://www.theguardian.com/australia-news/2018/mar/04/7bn-pledge-for-badgerys-creek-airport-rail-link-to-sydneys-west">Western Sydney</a> and <a href="https://www.pm.gov.au/media/announcement-funding-melbourne-airport-rail-link">Melbourne</a>, neither project has a business case. Yet politicians on both sides tripped over themselves in committing to building them.</p>
<p>There are good reasons to be wary of their eagerness. A <a href="https://www.transport.nsw.gov.au/system/files/media/documents/2018/wsrns-outcomes-report-mar-2018.pdf">government study released this year</a> stated that <a href="https://theconversation.com/flying-into-uncertainty-western-sydneys-aerotropolis-poses-more-questions-than-answers-73682">Western Sydney airport rail</a> wouldn’t be needed to cater for customers and workers at the airport until 2036 at the earliest. Without a business case, we have no way to understand the grounds on which the government still believes this project represents value for money.</p>
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Read more:
<a href="https://theconversation.com/flying-into-uncertainty-western-sydneys-aerotropolis-poses-more-questions-than-answers-73682">Flying into uncertainty: Western Sydney's 'aerotropolis' poses more questions than answers</a>
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<p>In the case of Melbourne airport rail, the project’s <a href="https://www.theage.com.au/national/victoria/airport-rail-routes-the-pros-and-cons-20180412-p4z97u.html">route hasn’t been resolved</a>, let alone its costs, ticket pricing structure, or potential benefits. Infrastructure Australia’s <a href="http://infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx">most recent priority list</a> did not include a proponent for the project. </p>
<p>And <a href="http://infrastructurevictoria.com.au/sites/default/files/images/Options%20book%20-%20FINAL%20-%20December%202016.pdf">Infrastructure Victoria says</a> upgrading airport bus services should be investigated first. This is because, at A$50-100 million, bus services would be a much cheaper way to tackle the same problem. It has also said the rail line should be delivered – but not for at least 15 years.</p>
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Read more:
<a href="https://theconversation.com/melbourne-airport-is-going-to-be-as-busy-as-heathrow-so-why-the-argument-about-one-train-line-95289">Melbourne Airport is going to be as busy as Heathrow, so why the argument about one train line?</a>
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<h2>Touting estimated benefits without showing calculations</h2>
<p>The second example of Australia’s transport planning information deficit is different but still damaging. It concerns the way infrastructure experts encourage governments to make worthwhile but politically challenging reforms to how we use existing infrastructure. The idea is to get <a href="https://theconversation.com/delay-in-changing-direction-on-how-we-tax-drivers-will-cost-us-all-87931">more value from the assets we already have</a>.</p>
<p>Infrastructure Australia <a href="https://www.afr.com/business/infrastructure/afr-infrastructure-summit-deputy-pm-embraces-radical-overhaul-of-road-charges-20180604-h10x9v">advocates a road congestion tax</a>. This would replace annual registration fees and petrol taxes with a scheme that charges motorists more when they travel in congested places at congested times.</p>
<p>It’s a very good idea. Indeed, a <a href="https://grattan.edu.au/wp-content/uploads/2017/10/892-Road-congestion.pdf">Grattan Institute report</a> last year recommended governments think seriously about road congestion charges for Sydney and Melbourne. But the way Infrastructure Australia has mounted the case leaves a lot to be desired.</p>
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Read more:
<a href="https://theconversation.com/delay-in-changing-direction-on-how-we-tax-drivers-will-cost-us-all-87931">Delay in changing direction on how we tax drivers will cost us all</a>
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<p>Last month, Infrastructure Australia <a href="http://infrastructureaustralia.gov.au/policy-publications/publications/prioritising-reform.aspx">released estimates of the benefits</a>, prepared with PwC, of a scheme to charge motorists more precisely according to the location, time and distances they travel. According to these estimates, in just over a decade, Australia’s GDP would be A$21 billion larger every year – and this would increase to A$36.5 billion a year by 2047.</p>
<p>The problem is that Infrastructure Australia provides little information about how these enormous numbers were calculated. In a flawless example of circular reasoning, IA refers to analysis done by PwC. PwC in turn notes that the estimates were “collaboratively developed by IA and PwC”.</p>
<p>The calculations do not appear to have included the costs of implementing and running such a scheme. And we have been told nothing about how this grand plan might work in practice.</p>
<h2>Converting reductions in travel times to increases in GDP</h2>
<p>The most commonly cited estimates of the “avoidable costs” of congestion in Australia come from the Bureau of Infrastructure, Transport and Regional Economics. In 2015, <a href="https://bitre.gov.au/publications/2015/is_074.aspx">BITRE estimated</a> the annual costs for Australia’s eight capitals totalled about A$16.5 billion. This was forecast to rise to about A$30 billion by 2030.</p>
<p>Such estimates have been important in highlighting the fact that congestion is not just aggravating but costly. But such estimates are, as <a href="https://bitre.gov.au/publications/2015/files/is_074.pdf">BITRE itself states</a>, “very blunt instruments for estimating and projecting congestion occurrence”.</p>
<p>It is difficult to precisely convert estimates of avoidable congestion costs into changes in GDP, of course. But the new Infrastructure Australia estimates do not even follow some simple, but important, rules of modelling. </p>
<p>First, they don’t make it easy for readers to see the basis for the assumptions used. Second, they don’t appear to have factored in costs as well as benefits. And third, in a situation where significant uncertainty surrounds the estimates, they haven’t published a range for the estimated impacts.</p>
<p>Getting transport projects right is critically important in cities that are already under pressure. Yet too many big infrastructure calls in Australia are based on misleading information or wafer-thin evidence. We need to do better.</p>
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<strong>
Read more:
<a href="https://theconversation.com/budget-policy-check-do-we-need-ribbon-cutting-infrastructure-for-jobs-and-growth-95362">Budget policy check: do we need ribbon-cutting infrastructure for jobs and growth?</a>
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<img src="https://counter.theconversation.com/content/99080/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities. </span></em></p>Billions of taxpayer dollars are committed before all the evidence for, and against, infrastructure projects is in. As well as missing business cases, basic rules of economic modelling are broken.Hugh Batrouney, Transport Fellow, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/947542018-05-15T13:48:06Z2018-05-15T13:48:06ZWhy fewer Londoners are taking the tube – a transport researcher explains<figure><img src="https://images.theconversation.com/files/218979/original/file-20180515-122935-4hshqn.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3872%2C2590&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/mattspinner/4482441020/sizes/l">mattspinner/Flickr.</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>For the first time since 2008, the number of people using the world-famous London Underground – locally known as “the tube” – has fallen. After over two decades of long-term growth, passenger numbers are <a href="https://tfl.gov.uk/cdn/static/cms/documents/transport-for-london-budget-2018-19.pdf">down 2%</a>, from 1.38 billion in the financial year 2016-17, to 1.35 billion in 2017-18. Bus use also peaked in 2014, and has been <a href="https://www.london.gov.uk/sites/default/files/bus_network_report_final.pdf">falling steadily each year</a>. Simply put, fewer people in London are using public transport – and this means fewer ticket sales. This has created a funding gap that puts plans for improvements and upgrades in serious jeopardy. </p>
<p>Since the national government cut its <a href="https://www.ft.com/content/b7392524-8923-11e5-90de-f44762bf9896">£700m a year</a> grant, London’s transport agency, Transport for London (TfL), has been banking on ticket sales to fund the capital’s transport system. But this year, TfL has had to revise its income from tickets sales <a href="https://www.london.gov.uk/sites/default/files/response_to_draft_consultation_budget_2018-19_-_final.pdf">down by £240m</a>. </p>
<p>This spells trouble for the agency, which <a href="https://tfl.gov.uk/cdn/static/cms/documents/tfl-business-plan-december-2017-.pdf">plans for ticket sales</a> to generate up to £6.2 billion, or 62%, of the £10.2 billion budget for 2022-23 – a step increase from today’s £4.6 billion, or 45% of this year’s budget. Since London Mayor Sadiq Khan is committed to freezing single fares, additional growth will need to come from more passengers. </p>
<p>This is, in some ways, a reasonable expectation: <a href="https://www.london.gov.uk/what-we-do/planning/london-plan/current-london-plan/london-plan-chapter-one-context-and-strategy-0">population</a> and <a href="https://data.london.gov.uk/apps_and_analysis/labour-market-update-for-london-april-2018/">employment</a> - the key drivers of transport demand - are still growing in London. <a href="https://tfl.gov.uk/cdn/static/cms/documents/tfl-business-plan-december-2017-.pdf">TfL points</a> towards economic factors, including the uncertainty of Brexit, to explain the downturn in demand for public transport. But this year’s lower passenger numbers point instead towards lifestyle changes, which are affecting when and how people choose to travel. </p>
<h2>London’s missing passengers</h2>
<p>Travel surveys show that the average Londoner made only 2.2 trips (across all transport modes) a day in 2016-17, down 20% from 2006-7. So despite population growth, transport demand has not risen as much as expected. This decline is mirrored across England: between <a href="https://tfl.gov.uk/cdn/static/cms/documents/travel-in-london-report-10.pdf">2002 and 2016 a 9% drop</a> in trips across all modes was recorded. </p>
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<span class="caption">Passenger numbers and journey stages on London Underground.</span>
<span class="attribution"><a class="source" href="http://content.tfl.gov.uk/travel-in-london-report-10.pdf">Travel in London Report 10/TfL</a>, <span class="license">Author provided</span></span>
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<p>Flexible and remote working practices are contributing to this trend: instead of commuting to work five days, the new normal for Londoners is now four. Over the past decade, commuting trips have dropped <a href="https://tfl.gov.uk/cdn/static/cms/documents/travel-in-london-report-10.pdf">by 14.2%</a>.</p>
<p>At the same time, the <a href="https://tfl.gov.uk/cdn/static/cms/documents/travel-in-london-report-10.pdf">cost of travel has been increasing</a>. While single fares on the bus and the tube cost approximately the same in real terms between 2000 and 2012, they have increased 5% and 3% respectively since then. The cost of season tickets is up even more; 8% on the bus and 6% on the London Underground in real terms since 2012.</p>
<p>Greater transport costs mean less disposable income, which partially explains why Londoners <a href="https://tfl.gov.uk/cdn/static/cms/documents/travel-in-london-report-10.pdf">are making fewer leisure and shopping trips</a>, instead opting to stay home and shop online. Meanwhile, London’s changing mix of traffic suggests that personal trips are being substituted with deliveries. This shifts the burden from the public transport network to the road network. Across London, light goods vans are making up a growing proportion of traffic: <a href="https://tfl.gov.uk/cdn/static/cms/documents/travel-in-london-report-10.pdf">accounting for 14%</a> of traffic in 2016, up from 10% in 1993 and 11% in 2000. </p>
<h2>Trouble for TfL</h2>
<p>To avoid a major shortfall, TfL will need look at new ways to fund transport. One solution might be <a href="https://theconversation.com/london-congestion-charge-why-its-time-to-reconsider-one-of-the-citys-great-successes-92478">to reform London’s congestion charge</a>. Currently, the congestion charge covers less than 1.5% of the city, applies only between 7am and 6pm, consists of a simple, daily flat rate, and exempts private hire vehicles - your Uber drivers and minicabs. </p>
<p>Over the past four years, there has been a 75% increase in the number of registered private hire vehicles. On Friday and Saturday nights, 18,000 cars flood the streets of Central London. With New York City set to introduce a <a href="https://www.nytimes.com/2018/03/31/nyregion/congestion-pricing-new-york.html">surcharge for taxis and private hire vehicles</a> (US$2.50 and US$2.75 respectively), London might also want to follow suit. </p>
<p>A more comprehensive road pricing strategy would be an effective tool to manage traffic and generate funds for the transport system. A reformed congestion charge alongside good public transport, cycling infrastructure and public space could encourage Londoners to shift away from their cars toward travelling by public transport, walking and cycling. </p>
<p>TfL predicts that most of it’s revenue growth – £3.2 billion over the next five years - will come from the new Elizabeth Line, which is set to start running in December 2018. By 2022-23, TfL expects passenger numbers on the Elizabeth Line to increase by <a href="https://tfl.gov.uk/cdn/static/cms/documents/tfl-business-plan-december-2017-.pdf">200m to 269m</a>, and tickets sales to earn <a href="https://tfl.gov.uk/cdn/static/cms/documents/tfl-business-plan-december-2017-.pdf">£913m</a>. Over the same period, passenger numbers on the London Underground and bus network are forecast to rise by just 5% and 3% respectively. </p>
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<span class="caption">Almost ready?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/transportgovuk/31598041145/sizes/l">Department for Transport/Flickr.</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>The income from the Elizabeth Line is crucial to TfL balancing its books. As outgoing deputy mayor for transport, Val Shawcross, <a href="https://www.london.gov.uk/moderngov/mgChooseMDocPack.aspx?ID=6265&SID=16777">warned</a>, delays to the Elizabeth Line opening on time are TfL’s greatest revenue risk. So as <a href="https://www.thetimes.co.uk/edition/business/crossrail-needs-500m-bailout-by-taxpayer-chris-grayling-to-tell-mps-lv77md5vp">engineering challenges</a> threaten to push back the opening date, TfL’s money worries look set to worsen. </p>
<h2>The funding conundrum</h2>
<p>TfL is also seeking to earn from developments on some of the 300 acres of land it owns in the city. By 2022-23, the property partnerships agreed between TfL and thirteen large property development companies in 2016 are set to generate <a href="https://tfl.gov.uk/info-for/media/press-releases/2016/february/tfl-selects-13-property-partners-to-help-it-deliver-thousands-of-homes-for-lond">£3.4 billion of income</a> to reinvest into London’s transport system. London Mayor Sadiq Khan is pushing for further sites to be unlocked, to generate more funds and meet his manifesto commitment to build more affordable homes for Londoners. </p>
<p>Khan’s manifesto pledge to freeze single fare tickets throughout his term is estimated to <a href="https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwi3-L-YwMvZAhXhhaYKHW9zD7IQFgg1MAE&url=https%3A%2F%2Fwww.london.gov.uk%2Fsites%2Fdefault%2Ffiles%2Fbudget_and_performance_committee_report_tfls_financial_challenge_final.pdf&usg=AOvVaw1Mz0_mV-uAaLG1pPi1axRs">cost £640m</a>. Arguably, reneging on that promise could return £640m to TfL’s purse. <a href="https://www.london.gov.uk/moderngov/mgChooseMDocPack.aspx?ID=6265&SID=16777">TfL points to</a> national rail services where fares are higher and the reduction in passenger numbers has been greater, and argue that the fare freeze blunted the drop in passenger numbers. </p>
<p>If TfL fails to find new ways to fund its network, more cuts to upgrade and capital programmes are only a matter of time. The agency has already <a href="https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwi3-L-YwMvZAhXhhaYKHW9zD7IQFgg1MAE&url=https%3A%2F%2Fwww.london.gov.uk%2Fsites%2Fdefault%2Ffiles%2Fbudget_and_performance_committee_report_tfls_financial_challenge_final.pdf&usg=AOvVaw1Mz0_mV-uAaLG1pPi1axRs">cut its funding</a> for streets, cycling and public spaces in London’s boroughs, and suspended its roads renewal programme and <a href="https://www.londonreconnections.com/2017/third-world-class-capacity-cancelling-tube-upgrades/">underground capacity upgrades</a>. TfL’s reliance on ticket sales to fund the capital’s transport system makes it very vulnerable to unexpected changes in demand. To ensure London continues to have a world-class transport system, both Khan and TfL must urgently find new sources of funding.</p><img src="https://counter.theconversation.com/content/94754/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicole Badstuber received funding for her doctoral research into urban transport governance from the Engineering and Physical Sciences Research Council via the research programme Transforming the Engineering of Cities. Nicole currently works at the UCL Transport Institute as Knowledge Exchange Coordinator. Previous research projects Nicole has worked on have separately been funded by MacArthur foundation, the New Climate Economy, the European Innovation Council via Horizon 2020 and UCL. Nicole is a ordinary student member of the Labour party. This article does not reflect the views of any research organisation Nicole has been or is associated with. </span></em></p>TfL’s money troubles worsen, as passenger numbers fall for the first time in two decades.Nicole Badstuber, Researcher in Urban Transport Governance at the Centre for Transport Studies, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/941662018-05-09T20:18:34Z2018-05-09T20:18:34ZWhy the need for speed? Transport spending priorities leave city residents worse off<figure><img src="https://images.theconversation.com/files/218014/original/file-20180508-46356-10kaeng.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Have Australian commuters really enjoyed gains in quality of life that would justify all those billions of dollars spent on transport infrastructure?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/angry-man-driving-vehicle-without-seat-148683359?src=JfkNVOBIorckUi02lAU-ZQ-1-57">Hayk Shalunts/Shutterstock</a></span></figcaption></figure><p>Australian governments are set to spend more on transport infrastructure than ever before. Federal and state infrastructure spending, <a href="https://theconversation.com/infographic-budget-2018-at-a-glance-95649">driven largely by transport projects</a>, was expected to total <a href="http://www.afr.com/business/construction/transport-infrastructure-boom-pushing-spend-up-80pc-in-5-years-macromonitor-20180221-h0wfa3">$31.6 billion in 2018, increasing to $38 billion in 2021</a>, even before the latest Commonwealth <a href="https://www.budget.gov.au/2018-19/content/bp2/download/bp2_expense.pdf">spending announcements</a>. Will all this construction make it easier for us to get around, our journeys more enjoyable, or <a href="https://theconversation.com/how-do-we-create-liveable-cities-first-we-must-work-out-the-key-ingredients-50898">our cities more liveable</a> for a growing population?</p>
<p>Since the 1950s, spending on transport infrastructure has largely been justified on the basis of its ability to increase travel speeds or reduce travel times. For example, the New South Wales government <a href="https://www.westconnex.com.au/sites/default/files/WestConnex%20Updated%20Strategic%20Business%20Case%20-%20November%202015.pdf">estimates</a> its $17 billion WestConnex toll road will deliver travel time savings motorists would value at about $13 billion. But new tolls will largely cancel out any benefit. This means <a href="https://www.theguardian.com/commentisfree/2017/feb/27/westconnex-is-a-bad-deal-for-motorists-and-taxpayers-who-is-it-good-for">the ultimate beneficiary will be the toll road corporations</a>.</p>
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Read more:
<a href="https://theconversation.com/stuck-in-traffic-we-need-a-smarter-approach-to-congestion-than-building-more-roads-84774">Stuck in traffic: we need a smarter approach to congestion than building more roads</a>
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<p><a href="https://trid.trb.org/view.aspx?id=694596">As early as the 1960s</a>, however, it become evident that prioritising speed above all else is counterproductive. It’s <a href="https://theconversation.com/city-by-city-analysis-shows-our-capitals-arent-liveable-for-many-residents-85676">making our cities less efficient and liveable</a>, and consigns many people to <a href="https://theconversation.com/road-rage-why-normal-people-become-harmful-on-the-roads-60845">stressful</a> and <a href="https://theconversation.com/designing-suburbs-to-cut-car-use-closes-gaps-in-health-and-wealth-83961">unhealthy</a> daily commutes.</p>
<p>Faster travel does allow people to move further from work and other destinations – and not have to spend any more time travelling. It’s also true that many households value the ability to move to outer suburbs, where lower land values mean they can afford a home (or a larger one). </p>
<p>But when thousands of households migrate to low-density suburbs, we end up with urban sprawl. This is bad not only for <a href="http://blogs.lse.ac.uk/usappblog/2015/06/01/urban-sprawl-costs-the-american-economy-more-than-1-trillion-annually-smart-growth-policies-may-be-the-answer/">productivity</a> and <a href="http://www.abc.net.au/news/2017-03-07/urban-sprawl-contributing-to-obesity-problem-study-suggests/8331548">public health</a>, but also makes public transport less viable. Sprawl entrenches dependence on cars. This limits access to economic and social opportunities for those unable to drive.</p>
<p>High vehicle speeds and longer driving distances create multiple other problems. These include more traffic noise, <a href="https://www.smh.com.au/national/yes-speed-really-does-kill-says-global-road-safety-review-20180404-p4z7t1.html">more road trauma</a>, higher transport costs and neighbourhoods too dangerous for children to venture outdoors on their own.</p>
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<em>
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Read more:
<a href="https://theconversation.com/designing-suburbs-to-cut-car-use-closes-gaps-in-health-and-wealth-83961">Designing suburbs to cut car use closes gaps in health and wealth</a>
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<h2>Rethinking the need for speed</h2>
<p>The need for speed is being questioned in other aspects of modern life. The <a href="https://www.slowfood.com/about-us/">Slow Food Movement</a> urges us to savour and enjoy our meal times, rather than view eating as an unwelcome interruption to our busy days.</p>
<p>For my <a href="http://hdl.handle.net/2123/17914">PhD research</a>, I asked a similar question of our travel time. What if it’s seen not only as a cost to be minimised, but as <a href="https://theconversation.com/time-scarcity-is-a-slippery-slope-to-inactivity-69294">valuable time</a> that can be used to work, exercise or relax? </p>
<p>It’s important to note that <a href="https://www.smh.com.au/business/the-economy/the-one-thing-about-commuting-that-is-strangely-stable-20180406-p4z88d.html">average daily travel times don’t decline</a> no matter how much is spent on transport infrastructure. How then can investment be prioritised to make our travel time more enjoyable and productive, while at the same time improving access to economic and social opportunities?</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/time-scarcity-is-a-slippery-slope-to-inactivity-69294">Time scarcity is a slippery slope to inactivity</a>
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<h2>Choosing to take the ‘slow road’</h2>
<p>I had observed that many people willingly choose a slower, more pleasant journey over a faster, less pleasant one. For example, <a href="https://doi.org/10.1016/j.jth.2016.10.004">research</a> shows that, after a new cycleway opened in Sydney in 2014, some people switched to cycling from driving and public transport, even though this meant their journeys could take longer. Some people who already cycled opted for a longer route via the cycleway. </p>
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<strong>
Read more:
<a href="https://theconversation.com/people-take-to-their-bikes-when-we-make-it-safer-and-easier-for-them-82251">People take to their bikes when we make it safer and easier for them</a>
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<p>Based on such observations, I developed a <a href="http://decisio.nl/en/research/social-cost-benefit-analysis/">cost-benefit analysis</a> tool that captures the value people place on having the option to cycle to local destinations and transport interchanges in a traffic-free environment – regardless of whether their travel time changes.</p>
<p>Using this tool to assess the City of Sydney’s <a href="http://cdn.sydneycycleways.net/wp-content/uploads/2014/12/11010602/Cycle-Strategy-and-Action-Plan-2007-2017.pdf">proposed 200-kilometre cycling network</a>, I forecast it would increase the proportion of local residents (aged 18-55) commuting by bicycle from 4.5% to 10.7% – freeing up significant space on roads and public transport. The estimated <a href="http://bca.transportationeconomics.org/types-of-measures/benefit-cost-ratio">benefit-cost ratio</a> was 3.4. That’s better than many of the multibillion-dollar transport projects on the national <a href="http://infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx">Infrastructure Priority List</a>.</p>
<p>Unfortunately, it’s not yet possible to validate these forecasts. Since 2013, the NSW government has done little to promote healthy transport. It has allowed the City of Sydney to build only about five kilometres of new cycleway, demolished one of the busiest cycleways in the CBD to create space for more traffic, and <a href="https://www.theguardian.com/cities/2016/aug/24/sydney-australia-war-cyclists-fines">increased fines</a> for trivial cycling offences. It’s not surprising the proportion of people cycling has hardly changed.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/cycling-and-walking-are-short-changed-when-it-comes-to-transport-funding-in-australia-92574">Cycling and walking are short-changed when it comes to transport funding in Australia</a>
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<h2>What do we want of our cities?</h2>
<p>The next step will be to adapt the tool for assessing other transport and land use initiatives that could improve the usefulness and enjoyment of travel time – and access to economic and social opportunities – without necessarily increasing speed. Possible examples include:</p>
<ul>
<li><a href="https://theconversation.com/defying-the-one-hour-rule-for-city-travel-traffic-modelling-drives-policy-madness-53099">extra train services</a> to reduce crowding</li>
<li><a href="https://theconversation.com/autonomous-vehicles-could-help-millions-of-people-catch-up-on-sleep-tv-and-work-89603">automated vehicles</a>, which could allow passengers to work while travelling</li>
<li><a href="https://theconversation.com/if-the-people-cant-get-to-their-jobs-bring-the-jobs-to-the-people-57567">jobs growth</a> <a href="https://theconversation.com/our-growing-big-cities-need-new-centres-of-employment-heres-melbournes-chance-93067">in suburban centres</a>, as in the Greater Sydney Commission’s <a href="https://www.greater.sydney/greater-sydney-region-plan">Metropolis of Three Cities</a> plan</li>
<li><a href="https://theconversation.com/tackling-housing-unaffordability-a-10-point-national-plan-43628">ambitious affordable housing policies</a>, enabling more low-income households to live closer to work.</li>
</ul>
<p>Of course, cost-benefit analysis is just one (far from perfect) tool for informing decisions on transport and land use proposals. Before these proposals are developed, perhaps we need to give more thought to what kind of city <a href="https://theconversation.com/liveable-cities-who-%5Bdecides-what-that-means-and-how-we-achieve-it-48825">we want to live in</a>. </p>
<p>Do we want a city that’s easy and pleasant to get around, with inviting public spaces? Or one where we have to endure stressful and expensive journeys to get anywhere, and the public realm is devoted to traffic, not people?</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/this-is-what-our-cities-need-to-do-to-be-truly-liveable-for-all-83967">This is what our cities need to do to be truly liveable for all</a>
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<img src="https://counter.theconversation.com/content/94166/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Standen has received funding from the Australian Research Council. </span></em></p>We spend on average about an hour a day travelling. Given this is unlikely to change, how can we make this time more productive and enjoyable?Christopher Standen, Transport Research Analyst, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/903012018-01-18T19:17:08Z2018-01-18T19:17:08ZThis is how Sydney’s transport system has gone off the rails<p>The working year has not got off to a good start for Sydney trains and the New South Wales government. The rail network <a href="https://www.theguardian.com/australia-news/2018/jan/10/sydney-trains-to-be-investigated-after-network-meltdown-causes-transport-chaos">went into meltdown</a> with chaos at many stations and trains delayed or cancelled. To add to this woe a <a href="http://www.abc.net.au/news/2018-01-17/sydney-trains-strikes-will-mean-no-rail-transport-and-roadways/9336446">24-hour train driver strike</a> (over pay increases) is planned for January 29, when most of the workforce will be back at work following the Australia Day holiday.</p>
<p>So what caused all of this? We will start with the immediate contributions but recognise that there is a longer story that starts from the inaction of past governments. </p>
<hr>
<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/six-ways-to-boost-funding-for-better-public-transport-32672">Six ways to boost funding for better public transport</a></em></p>
<hr>
<p>The January day of woes started with a <a href="http://www.abc.net.au/news/2018-01-10/sydney-trains-issued-with-please-explain-over-network-meltdown/9316860">major weather event</a>. Lightning struck part of the rail network and closed sections down. Buses and coaches were called in to bypass the closed part of the network. </p>
<p>In addition, significant upgrade work at a major junction, Hornsby, was already affecting services, with buses being used to shuttle between stations in the upper north shore. The <a href="http://www.abc.net.au/news/2017-11-26/new-sydney-and-nsw-public-transport-timetable-launched/9194538">new timetable</a> also <a href="http://www.abc.net.au/news/2017-12-12/sydney-commuters-get-an-apology-for-train-delays/9248594">had an impact</a>. This had been in place since November but required more train drivers since services had increased significantly (especially frequency). </p>
<p>Then came a spike in patronage in January. This was partly expected, but not to the extent observed – especially from tourists using the system. Coupled with some services being cancelled due to <a href="http://www.abc.net.au/news/2018-01-09/sydney-train-delays-due-to-sick-drivers-new-timetable-and-storm/9314758">too few train drivers</a> being available (too many approved leave and not enough of those being trained ready to take over), and the travelling public was delivered a cocktail of chaos.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"950646797155708928"}"></div></p>
<p>You could say that the Sydney train system has become a victim of its own success with the best patronage growth in years – 20% in the last 12 months. But the system clearly is struggling to cope with such success. The events in January, which were in part out of the control of the system (i.e. the extreme weather), have become a big continuing <a href="https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwidqOeBoeDYAhUBUZQKHbYgCIEQFggnMAA&url=http%3A%2F%2Fwww.theaustralian.com.au%2Fnews%2Fthe-week-starts-with-more-chaos-on-sydney-trains%2Fnews-story%2Fea3e9d212288eaf3d17c764c00add80b&usg=AOvVaw1iFlEXXKEzfoaYL5-ie7uA">news story</a>. </p>
<h2>Crisis a long time in the making</h2>
<p>In taking a closer look at what happened and being asked to explain why, one must step back and take a broader strategic assessment of public transport in general and trains in particular in Australia’s largest city. </p>
<p>Previous governments (at least over the ten years prior to the current Coalition government winning office) failed dismally in terms of actionable investment in public transport. Lots of plans led to no real action. </p>
<p>Since coming to power, the Coalition government has started to <a href="https://www.sydneymetro.info/sydneys-rail-future">invest in better rail infrastructure and services</a>. This includes the NorthWest rail, the Western Metro, station upgrades, major improvement in service levels, integrated ticketing (Opal) and better customer-focused communication and service. There has also been a significant increase in bus service capacity, as well as light rail initiatives. </p>
<p>However, rail investment in new corridors takes time and money. The first part of the enhanced network will only come on line in another year or so, with much of it listed for 2023. The catch-up is admirable, but is it enough? </p>
<h2>Solutions must involve all transport modes</h2>
<p>As population grows, as <a href="https://theconversation.com/end-of-the-road-why-it-might-be-time-to-ditch-your-car-72097">attitudes to car use change</a> – the Millennials in particular are increasingly <a href="https://theconversation.com/delay-in-getting-driving-licences-opens-door-to-more-sustainable-travel-57430">not getting drivers’ licences</a> – and as tourism booms, there is a real risk that we may only be buying a few years of growth. And then we will be back to where we are today, with crowded stations and lack of coverage throughout the metropolitan area. </p>
<hr>
<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/end-of-the-road-why-it-might-be-time-to-ditch-your-car-72097">End of the road? Why it might be time to ditch your car</a></em></p>
<hr>
<p>The sums being spent on rail improvements are significant but not enough to make a difference in delivering attractive capacity even for current users. But where will the money come from? The Coalition has prioritised investment in new public transport (train and bus), which is admirable, but more will clearly be needed if the government wants both to attract more people out of cars and manage an efficient and acceptable customer-focused rail and bus network. </p>
<p>With car travel dominating Sydney (typically <a href="https://bitre.gov.au/publications/2014/files/is_059.pdf">80% of all passenger trips</a>),
even a small switch has an impact. A 1% shift from cars is equivalent to a 5% increase in public transport use. This is enough in itself to create severe crowding on the trains. In peaks, the crowding is often not dissimilar to the Tokyo metro where someone has to push people onto the trains so the doors can close!</p>
<p>So what to do? Industrial relations issues can be resolved in the short term. So too can delays due to network malfunctioning (for whatever reason). The real challenge is finding appropriate ways to invest in public transport that will not only take pressure off the system but also support improved travel on all modes (including the car). </p>
<p>We are unlikely ever to build our way out of this situation given expected funding. Specifically, hundreds of billions are required and not tens of billions. What we need, then, is a new funding model that looks at the entire transport system. This will have to deliver sufficient funds to keep pace with growing demand, while ensuring that those who benefit also pay for the benefit. </p>
<p>For example, some of the wealthiest people in Sydney who work in the city use heavily subsidised train services (over 80% of peak trips to the CBD are by bus and train). Why are they not paying more? </p>
<p>The response is that if we were to charge them more they would switch to using their car. Fair comment. But why not <a href="https://theconversation.com/stuck-in-traffic-we-need-a-smarter-approach-to-congestion-than-building-more-roads-84774">reform car use pricing</a> as well? The time has come – we have had many inquiries and commentaries on the urgent need for road-pricing reform. </p>
<hr>
<p><em><strong>Further reading:</strong><a href="https://theconversation.com/stuck-in-traffic-we-need-a-smarter-approach-to-congestion-than-building-more-roads-84774"> Stuck in traffic: we need a smarter approach to congestion than building more roads</a></em></p>
<hr>
<p>Revenue raised can be used to support all transport but in a way that we get a balanced multimodal system that aligns with the goals of a truly world city such as Sydney. It is never too late to start this journey.</p><img src="https://counter.theconversation.com/content/90301/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Hensher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The real challenge is finding appropriate ways to invest in public transport that will not only take pressure off the system but also support improved travel on all modes, including cars.David Hensher, Director, Institute of Transport and Logistics Studies, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/882752017-12-05T11:09:56Z2017-12-05T11:09:56ZFact Check: does the north of England now get as much transport spending as the south?<figure><img src="https://images.theconversation.com/files/197290/original/file-20171201-10116-1fabz7e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><blockquote>
<p>When you include those centrally funded and locally delivered projects, this government is spending more per head on transport in the northwest than we are in the southeast.</p>
</blockquote>
<p><strong><a href="https://www.gov.uk/government/speeches/government-invests-in-northern-transport-infrastructure">Chris Grayling</a>, Secretary of State for Transport, 21 September 2017</strong></p>
<p>There is a widely held view, <a href="https://www.theguardian.com/public-leaders-network/2016/jul/06/investment-transport-north-england-eu-referendum">fuelled by the media</a>, that the north of England is hard done by when it comes to transport spending. Over 70,000 people recently <a href="https://www.theguardian.com/uk-news/2017/jul/30/north-of-england-transport-investment-petition-chris-grayling-electrification">signed a petition</a> to the transport secretary, Chris Grayling, calling for more investment in transport in the north. Grayling has <a href="https://www.gov.uk/government/speeches/government-invests-in-northern-transport-infrastructure">responded by saying</a> the figures used to make this assessment are misleading, and that the northwest region now receives more transport spending than the southeast. </p>
<p>The issue of transport spending is awash with statistics. A recent <a href="http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8130">House of Commons document</a> confirmed that public spending on transport in absolute, per person and modal average terms is higher in parts of the north than in the southeast region outside London but not in the capital itself. In the 2015/16 financial year, transport spending per person was £401 in the northwest, £380 in Yorkshire and the Humber, and £299 in the northeast. For the southeast, it was £365 per head, while for London it was £973. </p>
<p>The think tank <a href="https://www.ippr.org/news-and-media/press-releases/new-transport-figures-reveal-london-gets-1-500-per-head-more-than-the-north-but-north-west-powerhouse-catching-up">IPPR North has estimated</a> that from 2016/17 onwards, the figures will be £680 for the northwest, £190 for Yorkshire and Humber, and £220 for the northeast. The southeast will get £226 and London £1,940.</p>
<p>So Grayling is right to say the northwest is doing well right now compared to the southeast (not including London), which is receiving similar amounts to the other northern regions. But this ignores the fact that London still receives far more than any other part of the country.</p>
<p>The problem with these kind of figures for individual years is that they can skew the overall picture of spending. For example, money for large infrastructure projects such as Crossrail in London and the southeast, and Manchester’s Metrolink programme, tend to be allocated to the particular years when the projects are completed.</p>
<p>Looking at all the spending data over a longer period of time is a better indicator of the gap between north and south. In terms of total transport spending, the southeast has actually <a href="http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8130">received 13% more</a> than the northwest since 2011/12. And looking at bus and rail services, London has <a href="http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8130">received over five times</a> more public spending in the last five years than the northwest.</p>
<p>But the real picture is even more complicated than this. Transport infrastructure in London is not just for Londoners. Many people in the southeast benefit hugely from London transport spending, especially those who commute in every day. Yet people from elsewhere in Britain also benefit when they visit, as do millions of international tourists.</p>
<p>London is very different from the other English regions, with much greater population density and a more mobile workforce. Its transport serves a different, wider purpose and also benefits from local government funding because of devolution. So a like-for-like comparison is inherently misleading.</p>
<p>The government’s recent budget has also gone some way to further reducing the north-south divide. The northeast will receive £337m <a href="http://www.chroniclelive.co.uk/news/north-east-news/337m-grant-new-metro-trains-13940460">for new rolling stock</a> on the 40-year-old Tyne and Wear Metro network. Greater Manchester <a href="https://www.ft.com/content/ba9f13fe-cf99-11e7-9dbb-291a884dd8c6">has been promised</a> £240m to ease road congestion. <a href="https://www.yorkshirepost.co.uk/news/national/1-7bn-to-boost-transport-links-between-city-centres-and-struggling-suburbs-1-8866458">A £1.7 billion fund</a> will improve links between city centres and suburbs across the country. But the lack of news about the much-needed modernisation of the Manchester to Leeds transPennine route put on hold earlier this year is very disappointing, and Leeds still desperately needs a new mass transit system.</p>
<h2>Verdict</h2>
<p>It might come as a surprise for those in the northwest and Yorkshire to hear that they get about the same amount of transport spending (or more) than the southeast, but at the moment it is technically true. The northeast, meanwhile, remains the poor relation in every measurement of spending. But these simple facts don’t take account of the much higher spending in London or the very different circumstances by which this money is allocated.</p>
<h2>Review</h2>
<p><strong>Derek Robbins, Senior Lecturer in Transport and Tourism, Bournemouth University</strong></p>
<p>This is a comprehensive review of current transport investment and expenditure, well illustrated by published data. It can be difficult to separate data from political spin and government PR, which have the unnerving tendency to portray funding that has already been allocated as if it were newly announced. But the underlying premise of this article that transport investment in the northwest and Yorkshire has increased is well made.</p>
<p>I take greater issue with the conclusion that recent announcements have gone some way to further reducing the north-south divide. As the article illustrates, long-term investment is a better indicator, and the north still has some considerable catching up to do. The new projects are only a first step. I would also describe the lack of progress towards a modernised and reliable transPennine rail route as more than disappointing, given that it is an essential investment for future economic growth in the north.</p>
<p>While I also accept that London is different, I think the benefits of the capital’s transport links to the other English regions can be easily overstated.</p>
<p><em>This article was amended on 12 December 2017 to clarify that IPPR North estimated London transport spending for 2016/17 at £1,940 per head, not £1,040 per head as previously stated.</em></p><img src="https://counter.theconversation.com/content/88275/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government claims figures showing the south gets more than the north are misleading.Colin Bamford, Associate Dean, Business School, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/732062017-02-20T19:13:27Z2017-02-20T19:13:27ZWestConnex audit offers another $17b lesson in how not to fund infrastructure<p>The way we throw money at major transport projects almost guarantees billions of Australian taxpayers’ dollars are wasted. Australian Auditor-General Grant Hehir has released yet another <a href="https://www.anao.gov.au/work/performance-audit/approval-and-administration-commonwealth-funding-westconnex-project">damning report</a> on the process behind the A$16.8 billion investment in Sydney’s WestConnex motorway, Australia’s biggest infrastructure project since the Sydney Harbour Bridge.</p>
<p>WestConnex joins the long list of big, bungled transport investment decisions by Australian governments, both federal and state. </p>
<p><a href="https://grattan.edu.au/report/cost-overruns-in-transport-infrastructure/">Analysis</a> by the Grattan Institute shows these blunders are more than unfortunate accidents. They’re symptoms of a reckless infrastructure investment process, which has been showing up in a <a href="https://theconversation.com/spectacular-cost-blowouts-show-need-to-keep-governments-honest-on-transport-66394">pattern of cost blowouts</a>.</p>
<h2>What did the audit reveal?</h2>
<p>Both the <a href="http://www.abc.net.au/news/2014-07-27/sydney-westconnex-promise-check/5505696">Coalition</a> and the then <a href="http://www.abc.net.au/news/2013-05-12/westconnex-funding-promise-erupts-into-political-row/4684486">Labor</a> government went to the 2013 federal election promising to spend at least A$1.5 billion on WestConnex – before any business case had been completed. Voters were not informed of the project’s investment merits until 2014, when Infrastructure Australia first published the <a href="http://www.smh.com.au/nsw/nsw-state-election-2015/westconnex-infrastructure-australia-gives-thumbs-up-to-motorways-business-case-20150226-13qc8j.html">business case</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=686&fit=crop&dpr=1 600w, https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=686&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=686&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=862&fit=crop&dpr=1 754w, https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=862&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/157452/original/image-20170220-15914-pyaxwt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=862&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Auditor-General Grant Hehir has found the main reason initial WestConnex funding was set up as a concessional loan was to make the federal budget look better.</span>
<span class="attribution"><a class="source" href="https://www.anao.gov.au/about">ANAO</a></span>
</figcaption>
</figure>
<p>The primary justification for funding early expenses with a concessional loan – the first of its kind – rather than a grant was flimsy. The audit report found the decision was made because this approach would have “a smaller impact on the presentation of the Australian Government Budget”. In other words, it would look better on the books.</p>
<p>Sadly, recklessness of this magnitude is not new, or unique to mega-projects. Grattan analysis of the Deloitte Investment Monitor shows that between 2000 and 2015 more than one-third of transport infrastructure projects were committed to them before a formal funding commitment had been made.</p>
<p>This matters, because poorly planned projects cost more than they should.</p>
<p>The audit of WestConnex found that the hasty early investment in the project was structured in a way that did not deliver value for money to Australian taxpayers. The A$2 billion concessional loan was made at below market rates, structured in a way that minimised the tax paid on the interest, and the time before interest is due to be paid to the government on the loan was set to be four times longer than major lenders traditionally provide.</p>
<h2>Poor process is the norm</h2>
<p>WestConnex is not unique in this way. The Grattan analysis of the projects built between 2000 and 2015 found that if a project was promised before a formal funding commitment had been made, it was more likely than not to run over budget. And when these overruns occurred, they were massive – project costs doubled, on average.</p>
<p>But committing to projects before checking if their investment merits stack up is not the only problem with how our governments invest in transport infrastructure. When business cases are completed, these are not done using comparable methodologies across jurisdictions. They are also rarely made available for the public to scrutinise.</p>
<p>When projects are opened, politicians use the phrase “finished on budget” very loosely. For instance, <a href="https://grattan.edu.au/report/cost-overruns-in-transport-infrastructure/">Perth’s Peel Deviation project</a> was declared “on budget” despite costing five times the initial estimate. Why? Because at one point close to project completion, another estimate put the cost even higher.</p>
<p>Sometimes, projects are backed for base political reasons, rather than on their investment merits. For instance, the Princess Highway Duplication project in Victoria’s western district was found to offer only <a href="http://infrastructureaustralia.gov.au/projects/files/Vic-Princes-Highway-West-Duplication.pdf">eight cents of benefit</a> for every dollar spent. But it runs through the highly marginal federal seat of Corangamite – so it was built anyway.</p>
<h2>Key steps to better spending</h2>
<p>So, what should be done to ensure public money is better spent? </p>
<p>A good place to start would be to make infrastructure spending decisions more transparent. This could be done by publishing the full details of a project’s estimated and realised costs and return on investment on <a href="http://data.gov.au/">data.gov.au</a>. Infrastructure spending should also be included in the Productivity Commission’s annual <a href="http://www.pc.gov.au/research/ongoing/report-on-government-services">Report on Government Services</a>.</p>
<p>Second, the quality of business cases needs to be lifted, substantially and quickly. The Commonwealth should ensure one agreed method is used to measure and manage project risk. The Productivity Commission should assign “reliability ratings” to infrastructure business cases, which should be published on Infrastructure Australia’s website for all to see.</p>
<p>Finally, taxpayers should demand that politicians fully evaluate a project’s investment merits before they commit to funding it.</p>
<p>The auditor-general has found politicians committed A$17 billion to WestConnex as if it were pocket change. This happy-go-lucky approach is fine for kids deciding to buy a treat on the way home from school. But when it comes to spending billions of dollars of public money on projects designed to last for generations, we need to insist on something better.</p><img src="https://counter.theconversation.com/content/73206/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities.</span></em></p>Reckless government investment decisions are sadly the norm when it comes to transport infrastructure. Three key checks on the decision-making process can help ensure taxpayers get value for money.Marion Terrill, Transport Program Director, Grattan InstituteLucille Danks, Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/642332016-08-25T00:29:10Z2016-08-25T00:29:10ZFactCheck: does the average Australian family spend up to $22,000 every year on transport?<blockquote>
<p>The release of Australia’s first Transport Affordability Index by the Australian Automobile Association (AAA) reveals the average Australian family is spending up to $22,000 every year to get around. – Australian Automobile Association, <a href="http://www.aaa.asn.au/news-and-publications/news/article/?id=new-data-shows-true-cost-of-transport">media release</a>, August 22, 2016.</p>
</blockquote>
<p>A new <a href="http://www.aaa.asn.au/storage/aaa-transport-affordability-index.pdf">report</a>, commissioned by the Australian Automobile Association and compiled by SGS Economics and Planning, has estimated transport costs for a typical household in Australia’s capital cities. The calculations factored in public transport spending and car costs such as registration, fuel, insurance and tolls.</p>
<p>In a media release accompanying the report, the Australian Automobile Association said that “the average Australian family is spending up to $22,000 every year to get around.”</p>
<p>Is that accurate?</p>
<h2>Checking the source</h2>
<p>The Conversation asked SGS Economics and Planning and the Australian Automobile Association to clarify several aspects of their calculations. You can read their full response <a href="http://theconversation.com/full-response-from-sgs-economics-and-planning-64308">here</a>. </p>
<p>The SGS Economics and Planning <a href="http://www.aaa.asn.au/storage/aaa-transport-affordability-index.pdf">full report</a> explains in detail the assumptions that underpin their snapshot of transport costs for a typical household in Australia’s capital cities.</p>
<p>Their hypothetical household in each capital city featured a couple in their 30s with children. The adults were employed, lived in a detached house and had two cars, which were driven 15,000 and 10,000 kilometres per year. The car that drives 10,000 kilometres per year is assumed to be ten years old and owned outright. The car that drives 15,000 kilometres per year is assumed to be less than three years old, purchased new and financed with a car loan. In addition, one member of the household is assumed to travel by public transport into the CBD and home again, five days a week. </p>
<p>In each city, the hypothetical household is assumed to live in middle to outer ring suburbs, with a relatively high population density, good access to public transport, and – in the case of the Sydney, Melbourne and Brisbane householders – use toll roads to access the CBD. </p>
<p>These assumptions and estimates contained in the report appear valid to me. Overall, the report seems to be a reasonable attempt to deconstruct transportation costs. Assumptions about both cars being used for more than 10,000 kilometres per year while one person commutes daily via public transport could be questioned, but this would only make a difference at the margins. </p>
<h2>Report finds national average annual transport cost is closer to $17,000</h2>
<p>The Australian Automobile Association said the report “reveals the average Australian family is spending up to $22,000 every year to get around” – but the key phrase there is <em>up to</em>.</p>
<p>The authors of the report looked at two consecutive quarters of transport data – Q1 of 2016 (quarter one, January to March) and Q2 of 2016 (quarter two, April to June). The report found that:</p>
<blockquote>
<p>Annualised figures reveal a total transport cost for Q2 of $21,791 in Sydney, while the annual cost for Hobart is $7,691 less, at $14,100.</p>
</blockquote>
<p>So the figure of $22,000 relates to Sydney, not the national average. The higher costs in Sydney relate to tolls, registration and compulsory third party insurance, the report said.</p>
<p>In fact, the researchers estimated that the national average transport cost for the second quarter of 2016 is around $323.36 a week, or an annual national average of $16,814.72, as shown in this table from the report:</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=354&fit=crop&dpr=1 600w, https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=354&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=354&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=445&fit=crop&dpr=1 754w, https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=445&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/134897/original/image-20160822-30370-cazbbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=445&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Household total weekly transport costs, Transport Affordability Index: August 2016.</span>
<span class="attribution"><a class="source" href="http://www.aaa.asn.au/storage/aaa-transport-affordability-index.pdf">Transport Affordability Index: August 2016, SGS Economics and Planning.</a></span>
</figcaption>
</figure>
<p>So the Australian Automobile Association’s assertion that the report reveals the average Australian family is spending <em>up to</em> $22,000 every year to get around is correct – but just remember that’s the upper end of the estimates range detailed in the report, as this chart shows:</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/134905/original/image-20160822-30403-176wdv4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Household total weekly transport costs.</span>
<span class="attribution"><a class="source" href="http://www.aaa.asn.au/storage/aaa-transport-affordability-index.pdf">SGS Economics and Planning</a></span>
</figcaption>
</figure>
<p>The report found that the national average annual spend on transport is closer to $16,814 or $17,000 if you round up.</p>
<h2>Checking the numbers against other sources</h2>
<p>The report’s estimate of roughly $17,000 in annual household transport costs for the national average is higher than transport cost estimates produced by the Australian Bureau of Statistics.</p>
<p>But it’s not uncommon for different economic models to produce different results – it all depends on what assumptions you factor into the modelling. </p>
<p>The last <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6530.02009-10?OpenDocument">Household Expenditure Survey</a>, conducted by the Australian Bureau of Statistics in 2009-2010, indicated that Australians <a href="http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/CB07CC895DCE2829CA2579020015D8FD/$File/65300_2009-10.pdf">spent an average of $193 per week on transport expenses</a>. After adjusting for inflation, that is the equivalent of $221 per week in 2016, or $11,531 per year. </p>
<p>Included in the ABS survey’s definition of transport costs is motor vehicle purchase, fuel, registration, insurance, parts, public transport fares and several other expenses.</p>
<p>In their response to The Conversation, SGS Economics and Planning said the discrepancy was partly because the ABS’ Household Expenditure Survey:</p>
<blockquote>
<p>… includes figures on transport costs from a range of households, from couple families with kids in the outer suburbs to inner-city singles who rarely drive to regional pensioners… We chose to focus on couple families with children and the costs they are likely to face as they are the most common family type in Australia… Couples with children are likely to have higher transport costs than other family types such as singles, single parents or couples without children, as they are larger and more likely to be working.</p>
</blockquote>
<p>You can read more of their response <a href="http://theconversation.com/full-response-from-sgs-economics-and-planning-64308">here</a>. </p>
<p>The ABS data treats the major part of a car purchase as an asset (i.e. is not included in expenses related to travel), so if you treat household motor vehicles as a cost rather than an asset you can get a number that approaches the annual figure in the recent SGS Economics and Planning report.</p>
<p>The <a href="http://www.aaa.asn.au/storage/aaa-transport-affordability-index.pdf">report</a> assumes regular toll road usage in the capital cities, which, of course, doesn’t apply to all of us. And it also makes the debatable assumption that one member of the household uses public transport regularly while another member uses toll roads with similar regularity. </p>
<p>Naturally, the biggest contributor to overall costs may be how expensive your car or cars are (and, thus, any associated repayments), the level of which is largely at the discretion of the household. </p>
<h2>Verdict</h2>
<p>Overall, the SGS Economics and Planning report appears to be a reasonable attempt to deconstruct transportation costs, but is specific to a particular type of household within each city rather than all households who travel.</p>
<p>The Australian Automobile Association’s statement that the report “reveals the average Australian family is spending up to $22,000 every year to get around” is technically accurate, thanks to the inclusion of the qualifier “up to”. </p>
<p>However, it is worth noting that the $22,000 figure (which applies to a typical Sydney family) represents the highest end of the range of estimates contained in the report. </p>
<p>The report found that the national average annual spend on transport is closer to around $17,000, which is higher than transport cost estimates produced by the ABS in the past. <strong>– Matthew Beck</strong></p>
<hr>
<h2>Review</h2>
<p>I agree with this FactCheck and its conclusion.</p>
<p>The really important missing cost is the time lost to travel, especially when it is over one hour per day. <a href="http://www.sciencedirect.com/science/article/pii/0040162594900418">Marchetti’s constant</a>, a concept based on the research of Italian physicist <a href="http://cesaremarchetti.org/">Cesare Marchetti</a>, posits that anything more than an hour of travel time per day is problematic.</p>
<p>It would be interesting to compare options than the hypothetical “average Australian household” example given in the report. For example, both the dollar costs and time costs in Australia could be reduced by having one fewer car for the average family, and living in a location that allows that option to become viable.</p>
<p>My own <a href="http://islandpress.org/book/the-end-of-automobile-dependence">research</a> suggests that many cities around the world are increasingly opting for greater investment in public transport and higher density urban redevelopment, rather than building housing on the fringes of cities where houses cost less but transport costs are huge. <strong>– Peter Newman</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/64233/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Australian Automobile Association said that a new report showed that “the average Australian family is spending up to $22,000 every year to get around.” Is that accurate?Matthew Beck, Senior Lecturer in Infrastructure Management, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/587372016-05-03T20:34:30Z2016-05-03T20:34:30ZCity Deals still no more than a pamphlet after Budget 2016<p>Mounting public debt has sucked infrastructure spending capacity from the nation’s public balance sheets. The federal government proposes a new way forward, called “<a href="https://theconversation.com/city-deals-nine-reasons-this-imported-model-of-urban-development-demands-due-diligence-57040">City Deals</a>”. But the budget papers contain no further details, which is disappointing. </p>
<p>Infrastructure provision in Australian cities, especially for transport, is in crisis. Our cities are growing rapidly, they are congested and they lack planning direction.</p>
<p>The crisis has been elevating for some time. It has many origins – most notably in the aggressive paying down of government debt under four successive Howard governments. Between 1996-97 and 2006-07, net Australian government debt fell by more than A$125 billion. With the sale of Telstra, a further A$50 billion was made available to establish the Australia Future Fund.</p>
<p>There are good arguments for lowering public debt and setting aside savings to cover liabilities for public servant pensions. However, under the Howard government, actions to enhance the liveability of our cities were not given spending priority.</p>
<h2>A continuing story of rising debt</h2>
<p>The election of a Rudd Labor government in 2007 came with the promise of major infrastructure spending on our failing cities. </p>
<p>Instead, a global financial crisis led to the federal government balance sheet exploding with debt to fund massive spending injections and shovel-ready infrastructure projects, especially in the education sector. By the end of the 2013-14 financial year net Australian government debt exceeded A$200 billion. </p>
<p>The Abbott Coalition government eased back on spending with non-metropolitan roads spending preferred to the urgent refits our cities cry for. Now the 2016-17 budget papers tell us debt will exceed A$325 billion in the coming financial year, or 18.9% of GDP. That is Australia’s highest debt ratio in modern times.</p>
<p>When the Howard government was elected in 1996, Australia had just over 18 million residents. Since then another six million have been added; all are urban dwellers. </p>
<p>In this 20 years, Sydney has grown by one million people and Melbourne by 1.2 million; yet neither city has been the target of significant transport infrastructure spending by government. The major transport investment in each city has been by the private sector on motorways.</p>
<h2>Private sector role favours roads</h2>
<p>Look closely at this recent history and perhaps the logic of the City Deals initiative becomes clear. In 1994, the Kennett Coalition government granted Australia’s first tolled-motorway concession to the CityLink consortium. </p>
<p>Motorway deals in New South Wales and Queensland, for all their start-up failures and hiccups, have reproduced the CityLink model in three major ways. </p>
<p>First, they have used private finance to pay for the capital investments required. </p>
<p>Second, users must pay tolls to use the service the infrastructure provides, which, after deducting the minimal operating costs needed to keep a road open, forms the basis of a reliable return to private investors over many decades. </p>
<p>Third, and unlike the operation of a public transport system, the user fully bears the costs of providing and running a vehicle on the motorway.</p>
<p>Not surprisingly, cash-strapped governments have encouraged motorway investments in our cities and remained wary of new public transport investments. The latter depend heavily on public finance – and are also hideously expensive to run with low cost recovery from fare revenues.</p>
<p>For instance, after fare revenues, each of Sydney’s and Melbourne’s public transport systems still needs annual taxpayer injections of around A$5 billion to cover operating costs. Roads cost governments significantly less.</p>
<h2>So what about City Deals?</h2>
<p>In announcing City Deals as part of the <a href="https://theconversation.com/smart-cities-plan-offers-signs-of-hope-but-are-turnbull-and-taylor-just-dreamin-58628">Smart Cities Plan</a> last week, Prime Minister Malcolm Turnbull said that the days of the federal government acting as an ATM for the states’ infrastructure spending were over. This seems a most peculiar warning given the major role of the Commonwealth as a collector of taxes and their efficient deployment.</p>
<p>But if direct federal government spending on infrastructure is scaled back in favour of encouraging private finance into the void, then the rules of financing and funding infrastructure need to be obeyed. </p>
<p>The parameters are clear. Where there is risk – be it construction risk or revenue risk – then private finance will demand government pick up the tab for cost blowouts and revenue shortfalls. Then reliable funding streams must be created to feed competitive returns to the private capital investors. Funding can only come from two places: taxes or user fees. </p>
<p>Funding is the harsh discipline of private infrastructure investments. Public transport deals especially will be starved of private finance because in Australian cities commuters refuse to pay the full costs of their train, bus, ferry and tram rides. But without higher fares, or continued public sector fare subsidies, private sector finance won’t be attracted.</p>
<p>Private infrastructure investment is a complex process, especially in multi-billion-dollar projects. The detail matters and is different in every case. Yet last week’s announcement of City Deals as a solution to the nation’s failing urban infrastructure systems was, in the end, the launch of a brochure.</p>
<p>Perhaps an election campaign will tell us more.</p><img src="https://counter.theconversation.com/content/58737/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Phillip O'Neill receives funding from the Australian Research Council for two Discovery Projects examining private infrastructure financing of urban infrastructure.</span></em></p>The budget paints a picture of higher debt, little relief for growing cities crying out for infrastructure investment, and no detail of how City Deals might work to fix this.Phillip O'Neill, Director, Centre for Western Sydney, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.