Infrastructure Funding for Queensland

[ozbob]

Couriermail --> Queensland may borrow, raise charges to fund infrastructure

ACTING Premier Jackie Trad has revealed the Labor Government may borrow to fund road and public transport infrastructure if Canberra fails to commit much-needed cash.

The Government will also consider more extensive use of tolls and charges as well as swapping state-owned land with the private sector in exchange for public infrastructure.

Despite Queensland's growing debt bill and the prospect of further credit downgrades, Ms Trad yesterday insisted doing nothing was not in the state's interests.

"Our determination was to pay down debt and that's exactly what we will do through our election commitment and through the next State Budget,'' she told the Queensland Media Club.

"If there is a need to borrow for infrastructure it will be done in an absolutely responsible way." ...

Not reported but comments yesterday by Ms. Trad suggest they will look at bus priority and surface road augmentation rather than busway extensions.  Good! 

The elephant in the room is the Brisbane bus network reform .. 

[ozbob]

The Conversation --> Another rate cut possible due to weak economy: Stevens

[SurfRail]

ACTING Premier Jackie Trad has revealed the Labor Government may borrow to fund road and public transport infrastructure if Canberra fails to commit much-needed cash.

Finally common sense prevails!  The "B" word has far too much negativity attached to it - they are insane not to do this in the current economic and fiscal climate with the rates at virtually nothing.

[#Metro]

I would like this guy to explain how one raises $300 million/km for infrastructure to be profitable...?!?!

http://www.brisbanetimes.com.au/business/the-economy/roads-and-rail-should-stop-relying-on-public-purse-says-ia-chief-20150611-ghlrvq.html

[colinw]

ACTING Premier Jackie Trad has revealed the Labor Government may borrow to fund road and public transport infrastructure if Canberra fails to commit much-needed cash.

Finally common sense prevails!  The "B" word has far too much negativity attached to it - they are insane not to do this in the current economic and fiscal climate with the rates at virtually nothing.

AMEN!!!   Debt at Government borrowing rates is not the dirty word it has been made out to be by our dysfunctional political culture and the News corporation rage-pundit industry.

Particularly when the debt repayments add up to less than the escalation in project cost (not to mention the intangible costs to the economy of doing nothing).

I hope the Government has enough sense to build the "core CRR" as originally planned, perhaps with a move of the portals back towards Clapham/Moorooka now that the Yeerongpilly resumptions were stupidly sold off by the previous Government.  Or just resume them again. 

[ozbob]

7 News --> Labor will break debt promise: Qld oppn

[pandmaster]

Good on Trad, these are some very positive remarks. She is very coy about bus reform though. These are positive signs she will come on board soon.

[Stillwater]

Money is never going to be cheaper than at the present time.  It is about VALUE for money -- projects with good BCRs.  But Ms Trad says she will be working hard to have Queensland Infrastructure up and running by the end of the year (2015), which means a list of 'shovel ready' projects by mid-2016 (2016-17 financial year.)  In the scheme of things, worthwhile projects would start in 2017 and be under way in early 2018, just in time for Labor to point to them as signs of effective progress in 'building Queensland', hopefully to win the 2018 election.

[ozbob]

Couriermail --> Queensland infrastructure spending: The big three projects we'll borrow to fund

JACKIE Trad has named three key public transport ­projects which may need to be funded by debt, but ruled out new borrowings in next month's State Budget.

The Infrastructure Minister and acting Premier said yesterday a second heavy rail river crossing in Brisbane, duplication of the Sunshine Coast line and extending Gold Coast's light rail were vital to tackling congestion.

"We understand that in order to continue building for growth there may have to be some responsible borrowings in the future,'' she said.

"But let me tell you that is not part of our thinking ­currently."

The Opposition seized on the mooted new borrowings, accusing Labor of softening the electorate ahead of breaking its election promise to ­reduce the state's debt ...]JACKIE Trad has named three key public transport ­projects which may need to be funded by debt, but ruled out new borrowings in next month's State Budget.

The Infrastructure Minister and acting Premier said yesterday a second heavy rail river crossing in Brisbane, duplication of the Sunshine Coast line and extending Gold Coast's light rail were vital to tackling congestion.

"We understand that in order to continue building for growth there may have to be some responsible borrowings in the future,'' she said.

"But let me tell you that is not part of our thinking ­currently."

The Opposition seized on the mooted new borrowings, accusing Labor of softening the electorate ahead of breaking its election promise to ­reduce the state's debt ...

[ozbob]

Sent to all outlets:

13th June 2015

Time to get cracking with PT projects

Greetings,

We welcome the committment to get cracking on these three essential public transport projects:

" ... The Infrastructure Minister and acting Premier said yesterday a second heavy rail river crossing in Brisbane, duplication of the Sunshine Coast line and extending Gold Coast's light rail were vital to tackling congestion. ... "

http://www.couriermail.com.au/news/queensland/queensland-infrastructure-spending-the-big-three-projects-well-borrow-to-fund/story-fntuy59x-1227395436740

The Gold Coast light rail stage 2 could be funded by private investment/operator franchise and realising value-capture along the corridor.

The Sunshine Coast Line upgrade has major benefits for freight transport, as well as enabling better passenger services. As such it is not unreasonable to expect the Federal Government to make a significant contribution. The remainder should be funded out of the State budget.

A second river heavy rail crossing might need to be part funded by property and land development as we detail below.

Doing nothing IS NOT AN OPTION.  We are headlong into a rapidly developing transport crisis.

The Courier Mail has run a series: #GetMovingSEQ ( > http://backontrack.org/docs/cm/GetMovingSEQ/gmseq9.pdf ) which has well demonstrated the critical situation we are in.

There is nowhere to hide.  Brisbane bus network reform, introduction of all door boarding on key bus routes, establishing proper bus priority on the surface road system is just the beginning.

Fare reform for SEQ is also essential.

We are here to help! Just call ...

Best wishes
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track http://backontrack.org

Sent to all outlets:

6th June 2015

Self-Fund: Develop Rail Properties To Fund Cross River Rail

Sunshine Coast transport consultant Peter Quick is on the money. The Queensland Government has a number of options to self-fund Cross River Rail:

1. Property and land development above and around QR Stations.
2. Borrowing against the value of profit-making public assets withheld from sale.
3. Extending Land Taxation by removing the tax-free threshold and broadening the base.*
4. Growing the Queensland Economy

A visit to the website of MTR Hong Kong - the same company operating Melbourne's rail network - shows its property development division MTR properties has almost fifty stations where high-intensity development has been placed above or around rail stations, including light rail stops.

Attempts to recapture value generated by Queensland's transit infrastructure to date have been lacking. Private property owners around rail stations are already getting a free boost to their property values, courtesy of the Queensland Government and taxpayers. Or high-value land has been left to low value uses such as park-and-ride, which is not the highest and best use. We think the government can do a better job of clawing back that money through station development and land taxation changes.

Inner-city locations where land values are high or stations close to shopping centres are good choices. Increased development around stations will generate jobs for Queenslanders, grow the Queensland economy, and increase farebox revenue on the public transport network generally. If student accommodation is built, it may also attract a subsidy from Brisbane City Council.

Proposals to fix up the bus network (mostly using existing resources, http://tiny.cc/newnetwork ) and a concept proposal for a RiverCity Rail tunnel (see link below) have already been developed by our members. This would complement the above changes.

Ultimately the Queensland Government must fund the lion's share of Cross River Rail as it is the sole owner of Queensland Rail. The Perth precedent shows that self-funding can be done. The Queensland Government is responsible for governing Queensland. History shows that governments that fail to act are quickly removed from office.

Best wishes,
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track http://backontrack.org

References:

MTR Hong Kong Property Development
https://www.mtr.com.hk/en/corporate/properties/prop_dev_index.html

The Unique Genius of Hong Kong's Public Transportation System
http://www.theatlantic.com/china/archive/2013/09/the-unique-genius-of-hong-kongs-public-transportation-system/279528/

Opinion: Queensland should forget federal funding for cross river rail and turn to private sector to get things moving
http://www.couriermail.com.au/news/opinion/opinion-queensland-should-forget-federal-funding-for-cross-river-rail-and-turn-to-private-sector-to-get-things-moving/story-fnihsr9v-1227373139965

Basics: The math of park and ride
http://www.humantransit.org/2014/10/basics-the-math-of-park-and-ride.html

River City Rail Tunnel Concept
http://railbotforum.org/mbs/index.php?topic=11413.msg155988#msg155988

Brisbane City Council Subsidies
http://www.brisbanetimes.com.au/queensland/developers-to-receive-discounts-to-build-brisbane-student-accomodation-20150225-13om7y.html

* Rough Calculation

10 billion dollars (project cost) divided by 5 million people (rounded population of Queensland) divided by 40 years (infrastructure economic life) = $50 per person, per year.

New Bus Network Proposal (Updated) ---> http://tiny.cc/newnetwork
Current Brisbane City Council Bus Network ---> http://tiny.cc/checkyourbus
Bus Reform Report  'Frequency is Freedom' ---> http://backontrack.org/docs/bus/reform/BusReformBlueprint.pdf

Transit Oriented Development - possible locations

Inner City

Auchenflower
Bowen Hills
Buranda
Coorparoo
Dutton Park
Fairfield
Morningside
Park Road
Taringa
Windsor
Wooloongabba (co-constructed with CRR)

Suburban

Cleveland
Eagle Junction
Mitchelton
Nundah
Sandgate
Strathpine
Toombul
Wynnum

Other

Beerwah
Caboolture
Helensvale
Nambour
Robina

[Stillwater]

A state government that says 'we can't do this, or that, because the federal government won't give us the money' is supporting the case for abolishing the states entirely and having a national government and councils sharing responsibility.  Queensland Labor must find innovative ways to fund essential infrastructure, or risk industry and development going outside the state due to the financial imposts of congestion.  This is not a phantom cost, but a real one.

Having said that, the feds are part of the solution, especially in respect of the freight-carrying capacity constraints on the SCL.  The projects' scope needs to be established.  It is lazy politics to say 'give us some money and we will build.'  But build what?  The business case for each of these projects need to be prepared.  In the case of the SCL, old plans can be dusted off quickly and updated using the findings of the capacity constraints study due to be completed by the end of the month.

However, Ms Trad is yet to convince herself of what to do: "We understand that in order to continue building for growth there may have to be some responsible borrowings in the future,'' she said. "But let me tell you that is not part of our thinking ­currently."  Translation: "Via publicity, I want to show that I am thinking about possibly doing something, but I am really not going there."

Essentially this is a pollie's promise.  No doubt she is saying to herself that she needs to say something in response to the CM campaign, and it is to acknowledge the work that needs to be done.  And then comes the let-down ... it is PLANNED, it is FOR THE FUTURE ... never the here and now.  Thus the problem gets pushed off to the next term of government, or the next change of government.

Ms Trad is even reluctant to take action in the pretty easy reform (bus network).

She must stop trying to be seen to be doing something and actually get some runs on the board.

[#Metro]

A state government that says 'we can't do this, or that, because the federal government won't give us the money' is supporting the case for abolishing the states entirely and having a national government and councils sharing responsibility.

The states existed long before the Federal Government did. E.g. Constitution (of QLD) act 1867. Federal Gov't did not arrive on the scene unti 1901.

There are things that councils cannot really do well. Rail transport is one. The other issue is inequality - Brisbane City Council will do very well indeed and the other councils which have tumbleweeds within their borders will do very badly, unless there is some kind of financial balancing mechanism.

What I think it supports is states being the main collectors of taxes. If anything most of the Federal Government's things could be handed back to states. Federal Gov't should really focus on things that are national i.e. Defence, Immigration etc.

[ozbob]

FYI

The Age --> Federal govt opens door to funding Melb Metro rail tunnel

[ozbob]

Couriermail --> Opinion: Queensland will be left in Sydney's wake if it drags its feet on asset recycling

[ozbob]

Couriermail 18th June 2015 page 47

Don't hold our state to ransom

[ozbob]

Media Release  19th June 2015

Treasurer, Minister for Employment and Industrial Relations and Minister for Aboriginal and Torres Strait Islander Partnerships
The Honourable Curtis Pitt

Canberra needs to deliver real infrastructure funding for North Queensland

Queensland Treasurer Curtis Pitt has welcomed the Federal Government's long-awaited white paper on Developing of Northern Australia.

Mr Pitt said while Canberra had clearly listened to the Palaszczuk Government's call for action on the infrastructure needs for North Queensland – it needs to back the white paper up with real new funding for projects.

"I have been lobbying Federal Treasurer Joe Hockey for real infrastructure funding for new projects in Queensland so as a first step, I welcome the identification of the Hann Highway as a priority project under the Northern Australia road package and the funding for a water resource assessment for the Mitchell River catchment and for a feasibility study for the Nullinga Dam," Mr Pitt said.

"Today's announcement shows that contrary to what the federal government has been saying, it appears they do have money to invest in infrastructure but they need to work together with us and industry to deliver this funding and job opportunities which go with it for North Queensland.

"I call on the Federal Government to ensure that Queensland gets real benefits from the $800 million remaining in the Asset Recycling Scheme and not link it to the sale of state owned assets.

"The Northern Territory and Western Australia are accessing the asset recycling initiative, with WA receiving up to $750 million from the fund plus $499 million for roads in a special deal, potentially and access to the remaining $800 million.

"Queenslanders deserve a one-off special $500 million deal like Western Australia and I call on the Federal Government to deliver this now.

"All of the remaining funding of $800 million must be invested in Queensland otherwise the Federal Government will be pulling out infrastructure funding from Queensland for not supporting asset sales.

"I also ask that the Federal Government's loan scheme must not be structured so that Queensland picks up the tab for these loans. We are waiting for urgent advice on the eligibility criteria for their $5 billion concessional loans scheme.

"While they have told us the loans will be aimed at achieving no net cost to the Commonwealth, Queensland will not accept any arrangement whereby the State effectively picks up the tab for these loans.

"As a North Queenslander I know firsthand the geographic advantages of being so close to Asian markets, the national security role of the north and abundant opportunities to lead the world in tropical education, design, health and medicine.

"But I also know too well the significant economic, environmental and social challenges of Queensland's regional areas with sparse populations, infrastructure needs, service delivery costs, competition for skilled labour and the costs of natural disasters.

"The Queensland Government will ensure that we capture opportunities for investment discussed in the white paper to deliver innovation and jobs but we need funding for the rest of Queensland's infrastructure needs.

"By providing the right economic and social infrastructure needed in Queensland we will underpin long-term growth and I look forward to discussing how we can work with the Federal Government to deliver more for the north and the rest of Queensland.

"Today's announcement is a welcome start but we still have a long way to go."

[#Metro]

This lot isn't going to build anything for three years. Same old red herrings presented as justification.

Borrowing rates are at record lows. Assets withheld from sale can be borrowed against, with the profits paying off the interest repayments, opportunity for private finance with GCLRT by extending their contract, local council contributions are possible (de facto land tax) and then there is land tax reform as well.

Time to call time on this.

[SurfRail]

The current GCCC isn't going to be in a hurry to tip in any money, I can assure you.

[#Metro]

The current GCCC isn't going to be in a hurry to tip in any money, I can assure you.

I would disagree with you on this point. The Light Rail is so popular that there is significant political potential there for a candidate to run  a Light Rail extension platform. Unlike BCC, the GCCC is not political party controlled (so not as much campaign spending) and it would be easier to win a division there on that platform.

This could be a foot in the door for someone. Similar possibility on the Sunshine Coast, but much weaker prospects there IMHO.

[SurfRail]

GCCC may not be run on political lines overtly, but a large number of the councillors are members of or affiliated with the LNP and many are now questioning even putting money into Surfside.

The vote to fund the LRT was hardly unanimous, and that was a long time ago politically.

Keeping rates low is a lot more palatable to most ratepayers.

I don't see any realistic prospect of funding unless there is a major spill at the next election (doubtful).

[#Metro]

Nobody is remembered for low rates, they are remembered for the infrastructure left behind.

LRT is very popular: significant capital there.

[James]

Nobody is remembered for low rates, they are remembered for the infrastructure left behind.

LRT is very popular: significant capital there.

LDT, sadly, what a leader is 'remembered' for does not factor in to their electability. Infrastructure doesn't get votes, but handing people more money (through low rates) does that job far better. Many in the electorate are short-sighted - they don't look beyond their own wallets.

[#Metro]

Disagree.

GC LRT has very high public support, first stage is already built so its 'tangible'. LRT is a winner for the GC.
Whoever runs on that platform can expect VVVVV

[petey3801]

Disagree all you like, but in reality, the fact is, the Mayor who comes out and says 'We're increasing your rates by 5% to cover the GCLR extention' will come under a LOT of pressure at election time, because people only see "We're increasing your rates by 5%...." and the rest just turns in to mumbles, because the general public don't care. Just like when the Howard fed Gov't was in, they kept lowering taxes, people were happy. Now we're at unsustainable low tax rates for the country, but noone wants to put it back up a bit to cover current shortfalls, because it will result in them being kicked out at next election.
Politicians are there for themselves, not for anyone else, in this country. Unfortunate, but true.

[#Metro]

I think it is entirely possible. Borrowing means the cost can be spread over a very long time, and costs can be offset by extending GoldlinQ's contract.

Legitimation by referendum is very common in North America where a large, expensive proposal is put to vote independently of an election. I can't really see why that can't be used here.

[James]

Disagree all you like, but in reality, the fact is, the Mayor who comes out and says 'We're increasing your rates by 5% to cover the GCLR extention' will come under a LOT of pressure at election time, because people only see "We're increasing your rates by 5%...." and the rest just turns in to mumbles, because the general public don't care. Just like when the Howard fed Gov't was in, they kept lowering taxes, people were happy. Now we're at unsustainable low tax rates for the country, but noone wants to put it back up a bit to cover current shortfalls, because it will result in them being kicked out at next election.
Politicians are there for themselves, not for anyone else, in this country. Unfortunate, but true.

Truer words have not been said. Everybody wants new infrastructure, but they don't want to pay for it. This sums up a lot of human behaviour - e.g. credit cars, why people recklessly spend other people's money etc.

[#Metro]

[ozbob]

Brisbanetimes --> Gold Coast Mayor gives frank advice on extending light rail project

...And finally there is the future of stage two of the Gold Coast's light rail project.

In March 2015, Tate said if a decision was not reached by the end of that month it would be too late to build the connection to the main Brisbane rail line before the Commonwealth Games.

The Federal Coalition Government did not contribute any money to stage two in its budget, although the Federal Labor Government did contribute to stage one.

Gold Coast City Council did not contribute any money in its budget.

All eyes are on the Queensland Government.

Tate remained measured in his comments.

"They have the business case," he said.

"I would say that if I was the State Government I would have already have pushed the button."

The answer, according to Tate, is more involvement from the private sector.

His measured tones left the room.

"If the federal government keeps saying 'No', alright tell them to 'f—k off'," he says in frank terms.

"Get the private enterprise involved and ask them 'What do they need'?"

"I know what they want!"

Tate said the consortium that had built stage one would ask for 25 years to cover the construction costs and generate a profit instead of 15 years.

Tate said that form of public private partnership – which delivered stage one – was the direction forward.

"That is the model I would go for.

"However in qualifying that, I recognise that the state government is the lead agency and here at the City of the Gold Coast well, that is just a friendly suggestion."

[colinw]

I honestly do not understand this "asset recycling" buzzword that is being pushed by the Federal Goverment.  In many cases, the assets that are to be "recycled" (i.e. flogged off the LNP donors) are productive assets that return State Government a small profit or are revenue neutral.  But the new assets that are to be built in exchange are almost uniformly things that will never make a direct profit, even if they have a positive BCR via indirect means.

End result - higher operating expenses for the State Governments, but productive assets gone.

This is privatising profits while socialising losses.

[#Metro]

Governments are non-profit organisations that do not have formal shareholders. The state has the powers of a person, and may buy or sell assets just like a natural person would. In addition the state also has taxing powers, and hence is unlike a person in this respect.

The Queensland Government used to own butcher stores, fish markets, banks and insurance companies. Not today.

Whether something makes a financial profit or not tells us nothing about whether the government should be involved directly. People say that if something makes money, then government should own it. My response is that fast food restaurants are making money, should the Queensland Government buy fast food restaurants?

Then you have things that don't make money and you have (often the same) people saying that the government should own that too. For the opposite reason. So then you have this situation where the government should own everything. Which is unworkable in a large and complex society.

There needs to be sound policy reasons for things. These reasons can and do change over time. Indicators such as it makes money/does not make money are not sound and reliable guides to whether the state should or should not be directly involved.

Sometimes people say that if an asset is sold, that the future profits will be lost. Not really. The value of an asset is the sum of its future income stream. It's a choice between having a lot of cash now in a big lump, or little drips of cash in pieces over a long period of time. It's a bit like selling your house for $500 000 in one go, or renting it out for $240 per week for the life of the asset (say 40 years). (schematic example only) https://en.wikipedia.org/wiki/Valuation_using_discounted_cash_flows

In any event, the Queensland Government has made it clear that no assets are to be sold and the public has ultimately supported that (at least for now). I've shown previously that using this as an excuse / crutch to lean on is a red herring. If an asset is not sold then the asset has a value which can then be borrowed against - which releases an equivalent amount of money as a sale.

The Queensland Government seems to want to keep the cake, and eat it too. The strategy seems to be use this red herring as an excuse and push the large projects over the horizon (read: build nothing for 3 years, possibly longer) so that the finances balance...

This is a losing strategy as there is only so long you can get away with building nothing in voter-land. It also imposes costs on society as you can see in the case of the Sunshine Coast line etc.

[colinw]

I would argue that anything that is a natural monopoly, or in some cases duopoly, should retain Governement ownership or at the very least a high level of regulation and control.

In this I include power distribution (not generation or retail), roads, rail infrastructure (but not operation), hospitals, schools, ports - anything where there is a case for retaining public ownership and strategic control.

The examples you give, e.g. Government owning fruit processing (remember "State" brand marmalade - delicious!), had their reasons in the formative years of the colony/state.  E.g. the large number of processing companies, marketing boards, etc., were critical in promoting agricultural development in a state with low population.  The time for those kinds of mechanisms has passed, and indeed it could be argued that they lasted far too long under the Agrarian Socialism of the old Country Party.

When you start looking at everything through the prism "economic (ir)rationalism", we all lose in the long run.  Prices rise, public services run down, debts spiral.  The worst of this can be seen in some US states where "Tea Party" Governments have cut state taxes while closing entire schools because there's no money for education.  No thanks, I'd rather be a "high taxing, high service" Sweden than a USA clone with a crumbling infrastructure.

In today's world, I think there is still a strong case for retaining Government ownership and control of the critical infrastructure - the roads, railways, ports, etc.  Certainly the record of service to the public on privatisation of those assets has been very poor in this country and also in NZ, to the extent that the state has had to take back control of run down and half destroyed rail networks in Tasmania, NZ and to a certain extent Victoria.

I still see little sense in flogging off something that isn't losing money, and replacing it with something that will lose money.  All that does is makes the debt situation worse.  We already see that in QLD - a one off "sugar hit" from selling off the "good bit" of the railway as QR National, retaining the basket case remainder in state hands.

[red dragin]

With regards to borrowing against these assets.

Do we know if this has already been done ie. is this what the $80 billion in state debt is borrowed against, or is that debt just a 'cash' loan?

[#Metro]

The true state of Queensland debt
https://theconversation.com/the-true-state-of-queensland-debt-36345

The true state of Queensland's economy, without the spin
https://theconversation.com/the-true-state-of-queenslands-economy-without-the-spin-35959

What's clear from that table is that the debt-to-GSP ratio in Queensland has increased considerably since 2006-07, and that most of this increase occurred under Anna Bligh's Labor governments.

And in comparison to other states, Queensland now has the highest debt-to-GSP ratio.

Not all debt is 'bad'. It depends what the money is spent on. And the interest rate, and the ability to pay back.

I would not compare State Government to that of a country. Countries generally have central banks, State Governments do not. The range of funding supplies are also much more limited.

There is actually no technical answer to how much is 'too much'. This is a political judgement, in the same class as 'what ratio of patronage:coverage are you willing to pay for'.

My suspicion is that much of this debt is from GOCs (read: Ergon, Energex) which is not about to spiral out of control anytime soon. There is a problem in this area as people leave the grid, supporting the relative expense may become unsustainable. So even here a so-called 'natural monopoly' faces competition... if solar batteries improve, more people will leave the grid and you'll have a real issue here.

I would not be so quick the judge in the case of New Zealand and Tasmania. These are both islands with low population. Both governments thought they could get someone else to pay the subsidies and use the private sector as a dumping ground to get an activity 'off-balance sheet' after it has been run down, defunded and declined under government operation. One can observe that a government will do this particularly if 'dirty work' such as firing people is involved. I don't think these made money under public operation, and I don't think they made money under private either.

Government rail asset sales, and return to the public sector, in New
Zealand and Tasmania

http://ro.uow.edu.au/cgi/viewcontent.cgi?article=2430&context=eispapers

Both rail systems with their new private sector owners were initially able to
grow freight traffic. However, as highways continued to be upgraded with
more and heavier trucks competing for freight, and the cost of maintaining rail
track to a good standard began to become a burden, problems started to
emerge.

However, the experience of rail asset sales in both New Zealand
and Tasmania does highlight a latent failure of privatising inherently loss
making activities that are for the 'public good'

.

Wouldn't be surprised if both are making losses to this day.

It is interesting to contrast this to bus operations, where we have plenty of private operators performing inherently loss-making activities and no-one thinks of having the gov't buying all of them out

[ozbob]

Couriermail --> Opinion: Sourcing critical railway upgrade funding needs cool heads and smart solutions

IT'S winding up. The political rhetoric on federal funding for Queensland's critical rail infrastructure is reaching the higher-decibel ranges. Words like blackmail, bullying and standover tactics are being flung at federal government ministers for their refusal to hand over millions of dollars.

"Without access to federal funding for critical, large-scale infrastructure projects like the second river crossing for southeast Queensland, Stage 2 of the Gold Coast Light Rail and the duplication of the Sunshine Coast rail line, these projects are unlikely to happen." Thus says our Deputy Premier Jackie Trad.

Maybe we should all have a cup of tea, a Bex and a good lie down. Nothing much is going to be achieved by hurling invective at Canberra. What is required is calm, considered and innovative discussions between our respective governments on how this dichotomy in policy positions can be resolved. We should put our mind to practical solutions, not populist political posturing.

Let's look at one of the critical infrastructure tasks, the duplication of the rail line from Beerburrum to Nambour. This upgrade project has long been on the priority list – the line has been at full capacity for many years. It's not only a regional passenger railway serving the Sunshine Coast, but also carries long-distance tilt trains and freight trains. The Queensland Government's own forecasts predicted freight traffic to double between 2010 and 2026.

The federal government has a vested interest in this rail corridor. The Transport and Infrastructure Council has identified it as one of Australia's strategic Key Freight Routes, together with the new Inland Rail, running from Melbourne to Brisbane. The federal government is strongly supporting this new project financially, with $300 million already committed to planning and design.

So is this new railway more important than an upgrade to an existing single-track rail bottleneck on an original 19th century alignment?

In political terms yes. Whiz-bang new railways always deliver more political bang for the buck than boring upgrades. But as a strategic transport infrastructure improvement and in economic terms, who knows?

Here's a good wheeze. The agency charged with delivering Inland Rail is the Australian Rail Track Corporation Ltd (ARTC), an independent statutory authority owned by the federal government. They are responsible for managing the interstate rail network and also large chunks of the non-metropolitan NSW railways on behalf of the NSW government. Maybe the Queensland government could mirror NSW and contract with ARTC to manage Queensland's rail infrastructure and funding the upgrade becomes the responsibility of ARTC. OK, so maybe the Queensland and federal governments may have to stump up some of the cash, but ARTC can also borrow in its own right ...

[ozbob]

Sent to all outlets:

24th June 2015

Greetings,

No infrastructure for the next 3 years? You're joking!

RAIL Back on Track calls on Transport Minister Jackie Trad and Treasurer Curtis Pitt to secure funding supply for large state building projects such as Cross River Rail and the Sunshine Coast rail line duplication.

Deputy Premier Jackie Trad writes in the Courier Mail that without Federal Funding 'infrastructure projects... are unlikely to happen.' We disagree. Perth doubled the size of its train network and self-funded it. We can do the same. Is Jackie Trad really suggesting the Queensland Government will build no infrastructure for the next 3 years?! That's an election vote-loser right there. Transport consultant Peter Quick in today's Courier Mail  makes the point concerning the Sunshine Coast railway upgrade that we need " cool heads and smart solutions ". We agree.

RAIL Back on Track suggests three alternative funding sources:

1. Transit Oriented Development
2. Borrowing against assets withheld from sale, at record low interest rates
3. Land Tax reform

Large infrastructure projects such as the Gold Coast Light Rail or the Cross River Rail project will increase the value of nearby private properties.
It's a free kick to property values courtesy of taxpayers. The state should be capturing that value and using it to fund infrastructure.

Land tax can do this. Broaden it to include residential property, not just investment property. Any stamp duties already paid could be applied as a tax credit. Persons who have high assets but low income could defer the tax as a charge against the value of the property to be paid on sale. The ACT Government gives one example on how to move from stamp duties to land taxation. Stamp duties would be phased out.

Using a Land tax to fund infrastructure has many advantages:

    Land Tax rates are extremely low - 1-2% is common
    Fairness: It recaptures the increase in property values caused by nearby large transport projects
    Proportionality: it is proportionate to the unimproved property value
    Choice: people can choose to lower the amount of tax they pay by moving*
    It can't be hidden or minimised through offshore tax havens or creative accountants
    It does not reduce land supply, unlike other taxes which reduce work, investment or consumption.
    It cannot be transferred to tenants as higher rents as tenants can move, forcing a lowering of rents.
    Urban Density: It promotes the development of unused land, discourages property dilapidation and encourages increased density, which in turn directly supports public transport and farebox revenue.
    It keeps property prices in check, thereby improving home affordability

Infrastructure is expensive and we cannot afford to wait for the Federal Government. Ultimately, the Queensland Government has to be responsible for Queensland.

With a three-year election cycle, there really isn't time to lose. Reform needs to start now.

Best wishes
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track http://backontrack.org

PS:  I am off to Melbourne for a few days today.  Without doubt the best public transport system in Australia has Melbourne, with a pro-public transport culture and Government and operators committed to achieve that.  Always a pleasant experience.  Still contactable by phone. The myki fare structure actually encourages people to use public transport!

References:

Land Tax overlooked in tax debate
http://www.smh.com.au/comment/land-tax-often-overlooked-in-the-tax-debate-20150407-1mfro2.html

Scrap stamp duty? Yes, then tax the family home
http://www.smh.com.au/business/the-economy/scrap-stamp-duty-yes-then-tax-the-family-home-20150615-gho0gt.html

Ken Henry Tax Review - Land Taxes
http://www.taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/publications/papers/Final_Report_Part_1/chapter_6.htm

Couriermail 24 June 2015 - Opinion: Sourcing critical railway upgrade funding needs cool heads and smart solutions
http://www.couriermail.com.au/news/opinion/opinion-sourcing-critical-railway-upgrade-funding-needs-cool-heads-and-smart-solutions/story-fnihsr9v-1227411516299

*  The government gets paid the tax as the tax attaches to the land and for every seller there must also be a buyer (who will be paying the tax).

[ozbob]

Courier Mail --> Property developers called to fund southeast Queensland public transport infrastructure

[colinw]

Some words on the situation in Australia, from the editor-in-chief of the International Railway Journal.  Australia's regressive attitude to transport and rail is not going unnoticed beyond our borders.

IRJ -> Railway investors need nerves of steel

...

Nevertheless, there are still some politicians who are wedded to a 1960s outlook where the car is king and rail is of little relevance. Australia's prime minister,
Mr Tony Abbott, certainly appears to have this mindset.

While the federal government's 2015-16 budget will see increases in both road and rail infrastructure spending, the rate of increase for road is much greater than for rail. Although the federal government remains committed to rail projects already underway, it has failed to pledge any additional money. Of particular concern is the Inland Rail scheme which will create a new north-south corridor for freight between Queensland and Victoria bypassing the congested Sydney area. Here the government has re-pledged $A 300m ($US 240m) of existing funds and says it will commit money in future budgets without making any specific promises.

The situation for urban rail in Australia is dire, as the new federal budget will see funding slashed from $A 515m in 2014-15 to just $A 17m by 2018-19. To make matters worse, savings from a rail project in Sydney are being switched to road schemes. Perversely, the Abbot government says it will maintain funds set aside for a major road project in Melbourne in case the Victorian government decides to reverse its decision to cancel the project. This seems unlikely as Victoria plans to hand back the money it has already received from the federal government for the scheme.

Policies like these will simply fuel Australian's love affair with the car and lead to more congestion and pollution in the country's major cities. The federal government's standpoint on transport also flies in the face of experience on the ground. A case in point is the Gold Coast light rail line in Queensland which opened in July 2014 and carried its five-millionth passenger on May 6. The line is carrying an average of 17,800 trips a day, exceeding expectations.

...

[ozbob]

Brisbanetimes --> SEQ Mayors want to trial European infrastructure plan

[ozbob]

Sunshine Coast Daily --> OPINION: Leasing assets would let us get things done

[Jonno]

Sunshine Coast Daily --> OPINION: Leasing assets would let us get things done

The debate we need is about prioritisation not finding sources.  Nowhere in this debate has anyone mentioned that every dollar we spend on increasing road capacity is just increasing car usage which further drains our taxes.  Want to build PT or cycling infrastructure then stop building more road capacity!!!!