Article: The Shift to Public Transport is Way Off Track

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The Shift to Public Transport is Way Off Track

The Shift to Public Transport is Way Off Track
By Phil Dobbie | May 30, 2011

While the federal government is planning on using taxation to drive us into a low-carbon future, it seems to be doing very little to drive us off the roads.

According to the government's own statistics, motorists account for 13.5 percent of Australia's total greenhouse gas emissions. Okay, it's probably not as big a part of the total picture as you might have expected. But there other reasons to get us off the roads, particularly in our capital cities. Congestion is a big one. In NSW, according to the RTA annual report, urban peak traffic speeds average just 30 km/hr and we can expect that to decrease as more cars are piled onto the roads. And as journey time increases, we'll be looking at bigger losses in productivity, not to mention more time away from the family.

So why do we have this love affair with the car? Obviously it's all to do with convenience and, relatively speaking, it's cheap. If we add up how much the RTA spends building and maintain roads, to how much we all spend on fuel, then driving works out at about $2 for an average car trip (10km according to the Bureau of Transport Statistics). Compare that to the $2.50 per journey achieved by buses operated by State Transit (with minimal government subsidy) and the average rail fare of $2.28 (with a further $8.33 in subsidy). Why wouldn't you take the car when it doesn't cost any more?

If the government wants to change behaviour there needs to be a price differential. It could start by reducing the "subsidy" it spends on motor transport. There's an urban myth that what we spend licensing our cars doesn't find its way back into our roads. That's just not true. Last year the government spent three times the amount raked in through vehicle taxes funding the RTA. If that's not a subsidy, I don't know what is.

Meanwhile, the cost of running RailCorp, which operates trains across NSW, has increased but support from the government has not kept pace with that growth. Last year, while the government contributed 88 percent of the RTA's funding, it only contributed half of all RailCorp's income. A big difference could be made by getting rid of the subsidy for the RTA and using all that money for public transport. After all, government subsidies for the RTA are double the support given to public transport in NSW. Private cars should be just that, privately funded and properly costed, otherwise public transport doesn't stand a chance.

If we look at total spend on car transport, the RTA represents just a faction of the total amount. The cost of fuel (at least $2,000 per vehicle, driving an average of 15,000kms) represents a further $11.7 billion or so. Add that to the RTA budget and the people of NSW are spending at least $15.5 billion just to drive their cars. Yet we spend just $3.2 billion on Railcorp for train services across NSW.

Getting rid of a subsidy for the RTA is politically a hard sell. Funding RTA projects purely by vehicle taxation would mean a threefold increase in fees. But something needs to be done. According to the NSW Transport Data Centre's 2008/09 Household Travel Survey, 69 percent of all trips taken by Sydneysiders are in the car — only 5 percent are by train, and it looks like that proportion has not budged in the last decade.

It's unlikely that we'll wear a tripling of road tax, so such a move would force the RTA to spend less building new roads. That's also a politically difficult move, but it's a shift that has to happen. Time and time again we learn that, if you build a new road, it fills up with cars — capacity creates demand. Right now, for example, money is being spent building a third lane on the M2 to Sydney's north west, an area poorly served by public transport. A rail link out that way has been on the cards for years with ground yet to be broken.

Trying to arrive at a cohesive approach to this issue is particularly problematic for NSW, with a multitude of transport authorities all with competing objectives. The RTA's objectives are to make the roads better, not to look for a sustainable transport policy that includes all forms of transport. Even in the public transport arena NSW is split between multiple bodies, including RailCorp, State Transit, Sydney Ferries and Sydney Metro. Wouldn't it be refreshing to have a single authority responsible for all modes of transport — public and private — so we can enjoy an integrated approach to planning and operations?

[Jonno]

Here here and he didn't even include the cost of road trauma!!! Govt are struggling with the Cost of Living yet they are blindly encouraging the most inefficient form of transport!!  It is just plain stupid.

[somebody]

This article does its argument no favours by ignoring fuel excise.

[Stillwater]

How so, Simon?  Fuel excise is a federal government impost within the price we pay for fuel.  It makes up 38c of the cost of a litre of petrol.  Fuel excise goes to 'condolidated revenue' and is not directly linked to the amount the federal government pays for transport infrastructure -- roads, rail etc.

Are you saying that the link should be there and that part of the fuel excise collected should be directed to public transport?

If you are contemplating that, then I suggest that any money the federal government allocates for public transport (putting aside that this is a state responsibility primarily) should be on the basis that the state has to match the spending dollar for dollar or $2 for every one dollar.

There is plenty of evidence (i.e in health) that where the federal government increases its spending the states reduce theirs ever so quietly so that the end result is no nett increase in government spending in the sector.

[somebody]

Well, what it is calling a subsidy (road spending exceeding registration charges) comes out of consolidated revenue also.  I've no interest in turf wars between the feds and states, the fact is that it is all the taxpayers' money regardless.

[Stillwater]

In relation to fuel excise, what the federal governments spends on transport infrastructure is far far less than what it collects in excise.  So, where is the 'subsidy' of which you speak, Simon?

[somebody]

In relation to fuel excise, what the federal governments spends on transport infrastructure is far far less than what it collects in excise.  So, where is the 'subsidy' of which you speak, Simon?

It's in the state government account, is it not?

[Stillwater]

I assume what you are saying is that the difference between what governments collect from motorists by way of vehicle registration fees and fuel excise etc and what they actually spend on transport infrastructure is the 'subsidy' that motorists pay to supplement other government functions.  The assumption is that all money collected from one area should be returned to that operational area, i.e. that the totality of registration charges and fuel excise should go to roads, bridges etc.  But consider this ... what did you pay last year in 'defence tax' or the 'old persons pension tax' or the 'child welfare tax' or the 'education tax'.  There are no such direct taxes.  In times of old, each household would have been allocated one or two soldiers to a house, depending on the householder's circumstances, with the army's expectation being that the homeowner would be obligated to government to house and feed them.  I hope you are not advocating that!  Transport-related imposts (strictly speaking, an excise is not a tax) are paid to consolidated revenue and are also used to fund other government activities.  There is no 'rip-off', there is no big bucket of money hidden somewhere.