The answer to Russel’s first question

Appropriately Russel asked his first ever parliamentary question in the house today of Minister of Transport, Annette King.  The two of them both live in Rongotai electorate in south and east Wellington. They virtually share the same bus service. After his primary question, and King’s standard Government answer where she underfunding on a National Government that was voted out nearly 9 years ago, and a series of government patsy questions, Russel got to follow up with a few supplementary questions.

The draft transcript doesn’t quite capture how much he appeared to irk King:

Dr Russel Norman: When will the Ministers of this Government get out of their Crown cars, catch the bus to work as I did this morning, and realise that the public transport system is groaning and bursting at the seams as, owing to higher petrol prices, people get out of their cars and try to catch a bus or train to work, only to find that the system has been underfunded and under-invested in for many, many years?

Hon ANNETTE KING: I suggest that the member first directs his anger at the lack of investment in passenger transport right throughout the 1990s. He may have noticed that I said the amount was $40 million a year. In the 9 years that Labour has been in Government there has been considerable investment in passenger transport, and we are committed to doing more. So I feel a little aggrieved at the attack on our funding of passenger transport. I also say to the member that a large number of my colleagues walk to work; others, including me, have a bus ticket and have caught the bus to work…

Dr Russel Norman: Has the Minister received any advice that there is a connection between the woeful underfunding of public transport in this country and the fact that five party leaders of five political parties in this Parliament are driven around each day in Crown cars, and have no idea what it is like out there because they do not know what is going on with public transport?

Hon ANNETTE KING: That is a very unfortunate assumption to make about party leaders in this Parliament. I think the member is drawing a long bow to say they do not know what is happening in terms of passenger transport. I can certainly speak for the Prime Minister, who is very aware of passenger transport, and is very aware of being responsible for the Northern Busway, which was one of the biggest public transport projects ever funded in New Zealand, and which was funded by this Government. I believe that many members in this House are very aware of the importance of public transport, and I suggest we ought to work together on that issue, rather than that member whipping up a political storm for political purposes.

[Edit] I’ve just added video footage of this question to go with the transcript. Also, continue to feel free to let me know about any Cabinet Ministers you spot on the bus.

82 thoughts on “The answer to Russel’s first question

  1. Of course, there was no rort and Russel is as much a commie as Key is a fascist. You can’t dampen our parade today with your hyperbole, big bro!

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  2. So the little aussie bleeder is now in our parliment! – that’ll set you back

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  3. On King’s answers frog – you’d have to give them a ‘B’?

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  4. Wow. Nice speech Russel. Good to see you getting stuck in straight away. Didn’t catch question time today would love to see it posted Frog.

    I look forward to seeing more questions on this line. I reckon a pledge from some of cabinet to go carless for a couple of days would see vast improvements made on NZ’s public transport. They could ask Metiria she would have some tips.

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  5. Curious how the long-suffering ratepayer never gets a mention. Since 1999 ratepayer funding for roadworks has increased by $60m to cover increases in the construction price index. But ratepayer subsidies to passenger transport have more than tripled in the same time. Have the numbers using PT tripled in that time? In fact have they increased at a faster rate than during the 1990s?

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  6. Heard Russell rattling M J Savage. I think that MJ mightthink differently with the benefit of hindsight, in so far as welfare taken too far creates an incentive (especially to have children). Russell bangs on about child poverty but his solution appears to be that it is society’s responsibility not parents. Russell switches gear when he puts on his Frog hat and talks about a world where resources are limited…. tch, tch, tch….

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  7. This piece demonstrates Russel Normans biased judgment (I think):

    “The social divisions that underpin this election are starkly visible if you travel to some of Auckland’s suburbs. Out at Massey, the children are playing on the street in a little cul de sac: kids from Anglo backgrounds, from Maori backgrounds and Polynesian kids. Overhead are two sets of high tension power lines, which snake through the suburb directly above the houses. There are dismembered cars in the street.

    The kids play while some of their young mothers look on. There are more than 100,000 (mostly) mothers on the Domestic Purposes Benefit. The rents for state housing have increased to market levels in the last year while benefits have hardly moved and were cut by a third in 1991. The people of Massey are feeling the sharp end of the new right prod.

    A kilometre away in West Harbour, the streets are virtually empty. At each house you are confronted by three metre high double doors embraced by pseudo-Roman pillars: huge intimidating houses filled with frightened people surrounded by security warnings. After you press the buzzer the video looks at you blankly as a disembodied voice asks what you want.

    The views from the houses are fantastic; all are architect designed. There are lots of these houses going up at the moment. They hope to build their own little world of affluence out here — but of course it’s impossible, as shown by their fear.”
    http://www.greenleft.org.au/1996/248/13429

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  8. jh:”This piece demonstrates Russel Normans biased judgment (I think):”

    Greens think money is a bad thing unless of course you want to take it from those who have worked hard to earn and save it and waste it on their pet causes: public transport,SCAM, beneficiaries etc etc.

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  9. Hi Bryan,

    >> “have a bus ticket and have caught the bus to work…?
    >> Yeah right

    Can you explain what you mean ?

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  10. The trains were out this morning, replaced by buses which came half an hour late. Good start to state ownership of rail.

    I can only hope it never gets as bad as the abysmal privatised system in London – the first place I ever caught a train that took a wrong turning and several hundred people got dropped at the wrong station with no explanation offered.

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  11. awesome stuff – they need to take a look at the world we live in today and get a grip

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  12. Exactly Bryan, the more people taking PT the less traffic. Investing in PT is good for the hard working people that can’t afford the rising price of owning a car, people concerned about pollution, PT enthusiasts as well as for the car users.

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  13. I would guess that public transport lessens dependence on oil imports too…on balance.

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  14. Presse-puree: if the only way that someone can afford to get to work is via a very heavily subsidized public transport system ( $10 per trip via rail in Ak or Well) then perhaps they should get a job closer to home or mover closer to work. If they are earning so little then under the income transfers available via WFF they are probably paying zero ( or very close to zero) net tax and therefore are getting a free ride from the rest of us.

    Have a look at this chart that shows how much the tax wedge for the average married worker plunged after Working For Families was introduced. Given that government spending hasn’t fallen any, that means that fewer and fewer of us are paying more and more of the tax burden.

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  15. “StephenR: “public transport lessens dependence on oil imports” the bit I don’t get about public transport is: if it is so good then why it is so heavily subsidized not just in NZ but most other places ? Public transport is more like a public library or a public art gallery: a form of income transfer rather than a form of public infrastructure like water, electricity, or roading that has to pay it’s way through RUC, direct recovery or tolls.

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  16. Don’t get me started on that anti-green legislation WFF.
    Of course for some weird reason some greens actually support WFF.

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  17. Well as a Green/libertarian I find the WFF a pox on both my Ideology’s.

    As a Green the policy rewards people who have as many children as they like. I will never restrict your right to have children I will however oppose any moves that subsidize children.

    As a Libertarian the policy violates our rights because it changes our tax burden based on the number of children we have.

    If a person with 0 children earns 50,000 a year they will pay more tax than someone with 2 children who also earns 50,000.

    Any Tax must always be imposed fairly over the whole of society.

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  18. Further how would people who agree with WFF feel if a tax was put in place that said homosexual people need to pay an extra 10% tax.
    I am sure they would be up in arms but people who choose not to have children are allowed to be taxed more.

    I hope the National government does away with the bill and I hope the green party votes with them.

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  19. Excellent points Turnip. I suspect however that it will be very hard for National to change WFF: the benefits to those who get it are so large ($100’s pw) that it would be electoral suicide to take it away. It will however be a drag on our economic productivity that will limit our ability to grow.

    BTW: why ‘turnip’as a tag ?

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  20. Bryan, PT certainly is an income transfer. What your comment to me didn’t address was ‘dependence on oil imports’. Obviously PT has plenty of benefits to the people that use it (or even those who don’t use it, in terms of air quality, that climate change thing).

    Are you advocating that we we cut funding tomorrow? Hypothetically, how would we be better off with that 300 million going back to the taxpayer (mostly to the well off – I suspect you’d say that is ‘fair enough’?).

    – Well off would have quite a bit more of their own money
    – Poor/middle classes would have a tiny bit more – would have to spend a higher portion of their income on transport.

    We really need numbers on how much PT is subsidised by regional/central government to figure out how much a bus would cost without subsidies I think. Then we could go on about how much new demand would affect the price of cars, and how more car use and demand would affect the price of petrol, how more car use would affect congestion, etc…

    Just heard a figure that each passenger train trip in Auckland/Wellington is subsidised on average $10.

    Which explains our economy crippling tax burden.

    I really do find that absurd. 300m is not “crippling”, and so certainly does not explain the entire level of tax in the system.

    If they are earning so little then under the income transfers available via WFF they are probably paying zero

    And if they are just poor with no kids?

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  21. Bryan,

    The bit I don’t get about people in NZ that think investing in public transport is bad is : if it is so bad then why most other developed countries are developing PT more and more. Once people tried a good PT
    system they want more.

    Why is that a road an infrastructure and a railway is not ?

    Also, I don’t know if i am correct but it seems that you think hard working people, the “us” are the people paying – because they earn more – for the other implying that those are not hard working people.

    you basically say that in general
    Hard working = high salary

    It doesn’t really match with the idea that i have of our world.

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  22. >> PT certainly is an income transfer

    it doesn’t have to be

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  23. You and Bryan would concur on that then. I’d just like to know what all the flow-on effects of un-subsidising PT would be…

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  24. Bryan- public transport is heavily subsidised because people don’t want to bear the investment costs for something so expensive despite its very large social benefits. It is heavily subsidised because although we are sometimes rational, we are also creatures of comfort and habit- and it’s very comfortable, seems very empowering, and is a pretty enthralling habit to drive where you need to go, even if it wastes time you could be reading while you take the train, reduces the amount of excercise you get by walking to and from the stations, and increases resource use.

    That’s even discarding the fact that it has a synergistic effect with road when managing traffic- that is, because the networks are separate, the better balanced the load is between the two networks, the less bottlenecks there are likely to be, meaning we all get where we’re going faster. Given that our rail and bus systems are vastly under-resourced, they are doing a remarkably good job in this regard. Russel is absolutely right that they could do with extra development though, and I bet Helen Clark, John Key, and our two populist friends from the centre would be a bit more sympathetic if every morning they rode with the people who save money, gain reading time, and/or aim to reduce our impact on the environment by taking public transport.

    As for why Annette was so mad- probably because Labour is dealing with similar lines about being out of touch from National all the time now, and they’ve been very successful. And of course, in the world of bipartisan politics, if you use National’s attack memes to do anything, you’re supporting National and acting against Labour, rather than trying to call them back to their roots as a centre-left party. (instead of a centre-centre party. ;) )

    As for the first day of re-nationalised trains- Everything went well on the Johnsonville line in Wellington, and off-peak tickets only cost a dollar for unlimited travel today. Pretty cool.

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  25. Step 1 – Buy back the trains.
    Step 2 – Drive the competition into bankruptcy starting with a punitive 10% increase in RUC’s. Notice how the excise tax on petrol wasn’t increased.

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  26. Step3 – Set a 250km limit to how far trucks can carry goods.

    (remember those good old days back in the not to distant past when you needed a permit – rubber stamped by a government employee – to transport goods over a greater distance then the 250 k’s.?)

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  27. “off-peak tickets only cost a dollar for unlimited travel today” fantastic, I’ll remember that when I pay my next provisional tax bill.

    StephenR/Ari: you are both right, I don’t have the numbers to justify my attack on public transport ( though I do know that it is heavily subsidized, a quick look at the ARC accounts shows that). I would love to have the time (and the skills) to get the numbers because the limited Googling I have done indicates that their is a fair amount of ideological rather than entirely rational support for public transport.

    For example: the imported oil/carbon footprint issue.

    Living & working in Ponsonby I am not only a heavy user of the pavements I also give my Go Rider card a fair bashing off peak ( it’s the only way I’ll be seeing a tax rebate this decade). I have observed that on many of these journeys that the bus is almost empty. Sure, the Link has gone hybrid recently but it would interesting to know a comparison of the overall carbon footprint & fuel consumption of a bus with a car.

    “Once people tried a good PT system they want more.” If it’s subsidized I am sure they do want more. Would they want it if they had to pay the real cost ?

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  28. Sorry Ari – PT in NZ is subsidised (in particular rail) because most of the system is uneconomic and never will be. Nor does it have many benefits, social or economic.

    There is a story about viability in Wellington and possibly a story for Auckland about using buses and developing bus lanes. PT Rail for Auckland and the rest of NZ (excluding wellington) however has as much value as standing on a street corner and handing a $100 to every passer-by.

    When people debate PT they forget there already is a large scale private sector non-rail providers. That is the Taxi service. Its in every town, runs when you need it and goes where you need it to go. Oh and it pays its own way without any subsidies.

    Question for you Ari – given one sometimes espoused Green objective is supporting local communities making decisions for them, are you happy that the Government over-rode the expressed preference of Johnsonville residents to have a bus line rather than upgrading rail? And if you trot out the argument that Bus and Coach unfairly influenced the result, then your forgetting the same one page submission could have been used by supporters of rail. Making it easy to submit and have your view heard is susposed to be a virtue of democracy.

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  29. Kevyn – is step 2 what has actually happened? In increase in RUCs for everyone?

    Bryan – those empty journeys are, i suspect, off peak ones(?) Certainly not economical or pollution friendly. Another question would be if the high use times make up for this or not.

    comparison of the overall carbon footprint & fuel consumption of a bus with a car.

    How full the bus/car is too…

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  30. StephenR: “Go Rider card a fair bashing off peak “. yes they were off peak journeys but my observation , as a frequent user of public transport at various times is that off peak is most of the time.

    I use subsidized public transport because the cost of parking in central Auckland is so expensive because it is not subsidized (casual off peak parking starts at around $8 hr and rapidly rises onpeak to upwards of $20/hr in some cases). A round trip on the Link for myself,wife and son is a subsidised $9.60. If it wasn’t subsidized it would be more like $22.00 ( about a 60% subsidy based on figures I managed to find). That would make a taxi the best solution to my transport problem at around $20 return.

    Remove the subsidy and let the market provide the best solution.

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  31. Off peak is most of the time, but that’s why it’s relatively infrequent at those times.

    Remove the subsidy and let the market provide the best solution.

    Care to venture what the consequences would be for poor/middle/rich?

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  32. StephenR: “Care to venture what the consequences would be for poor/middle/rich?”

    That would depend on the demographics of those using public transport.

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  33. Perhaps that would be a good idea – finding out the demographics, then the impact on them, rather than just slashing the 300m now? Seems like you know the demographics of those using PT anyway?:

    Public transport is just another form of income transfer from the hard working to the indolent

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  34. indolent might have been a little ‘emotive’. Though my suspicion is that poor people use public transport more frequently than those who are better off it is not necessarily the case.

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  35. Unlike “indolent”, it would certainly be a very reasonable thought.

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  36. Bryan Spondre:
    you say “I have observed that on many of these journeys that the bus is almost empty.”
    A fair observation, but also in terms of arguing against PT, this is a straw man. Why?
    This is related to the same argument many people use to justify their car use, “it is convenient, I can travel anytime” …
    What happens if one takes away the off-peak? If by some chance I caught the regular peak-hour bus into work, but had to go the dentist/doctor/rush to kid’s school during off-peak? or, if I only work part-time? What can i do then if there is no bus? If a car user could only use their car between 0730-0900 and 1630-1800 M to F, then a car would not be that much use to them would it?
    Secondly, many part-time and shift workers rely on the off-peak PT to get to work as well, which I might add, is a complete PITA.
    Thirdly, people such as yourself, who travel off-peak, given that the peak-hour buses are getting increasing crowded, are actually doing everyone else a service by not adding to the crowding :-)

    In addition, there seems to be some elitist posters here who are basically taking the angle that “only poor people take PT”, and “they have no choice cos they can’t afford cars”. There was a huge survey in Wellington in the late 80s when the regional council was established, which found that in Wellington, many people chose to take PT when they had/could afford other options.

    More generally, having lived and worked in Hong Kong, Tokyo, Taipei and Wellington, the argument that “people will always use cars” is absolute unquestioning lazy thinking bollocks. I have never owned a car in my life, and have honestly never felt the need to (and yes I can afford one before anyone throws up that straw man).

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  37. Hmm…this leads me to put forth a small and not particularly well thought out theory for ACT being so low in the polls:

    ‘Right’ or not, the policies of Douglas et al caused a lot of very sudden pain which a lot of people seem to remember (not me, too young), which has tainted the party somewhat. Slashing these particular subsidies, especially without being sure of the impact on people of doing so, seems to fall into the same category of Douglas-ness – a fair bit of pain, with some (in this case) alleged and unknown gain. (I would say the ‘gain’ of slashing tariffs and subsidies on consumer goods was pretty bloody obvious though).

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  38. I could afford a car – PT still preferable for going to work for sure, but am considering a scooter for a little more freedom of movement, not that I NEED it, but might be nice.

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  39. StephenR – interesting point and to some extent agree. Although I would probably suggest the Douglas era is remembered the way we remember Dentists. Necessary but we really didn’t like the pain of the operation even though we where the cause of the pain (ate too many sweets) and although we are doing better now as a result (slashing tariffs and subsidies had massive benefits to consumers and overall economic + environmental well being) we don’t like the memory.

    Slight risk that we have society that is interested in consuming too many sweets again and will end up needing a dentist again.

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  40. Yeah. I would be interested to know how this can be applied to the ‘public good’ of PT though.

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  41. Please please please let Russ ask every question in the house, those of us who see the new Green party as something that is extremely bad for the long term future of NZ implore you to push Russel to the front on every issue.

    Anybody who gets taken to the cleaners by Jim Anderton is not fit to be in the house, it was so bad that Meteria was seem trying to hide her face such was the embarrassment.

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  42. haven’t checked the data throughly but a rough estimate would suggest that the highest users of PT are actually people on middle/high incomes. Although the extremely wealthy (Members of parliament included) generally don’t use PT, unless you count flying.

    Basis – social and economic data of cities that shows the well off live either inner inner city near places of work – think Mt Vic, Ponsonby, Parnell, Manhatten, inner London etc. Or well off live on city outskirts – think rural lifestyle blocks.

    Most low income will use cars as they are able to undertake multiple activities with one trip. Think mini vans dropping kids off, taking people to work, doing the shopping all in one trip.

    There are exceptions to this but for the majority this applies. It was quiet noticeable in Asia watching developing countries and seeing low income familes move from bicycle transporting mum, dad, children and three pigs to scooters transporting mum, dad, children, three pigs and a trailer with half the building materials for a house. This in some countries is now being replaced by car (low priced import) which is used to do all of the above is also used as a part time taxi and a scarey amount of cargo transportation.

    Examples of good PT occurs in countries with high population densities within a compressed space and with high incomes – think London, Singapore, Hong Kong.

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  43. I too would like to see Russell asking a lot more questions. And fronting all the TV adverts.

    You the man, dude!

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  44. maybe I was thinking of a ‘parallel’ and not a reason.

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  45. “I use subsidized public transport because the cost of parking in central Auckland is so expensive because it is not subsidized (casual off peak parking starts at around $8 hr and rapidly rises onpeak to upwards of $20/hr in some cases). A round trip on the Link for myself,wife and son is a subsidised $9.60. If it wasn’t subsidized it would be more like $22.00 ( about a 60% subsidy based on figures I managed to find). That would make a taxi the best solution to my transport problem at around $20 return.

    Remove the subsidy and let the market provide the best solution.”

    Bryan, the Link bus that you use is an unsubsidised route, IIRC, so that means you would still pay $9.60. Where the subsidies largely go is on the peak only services, the non-CBD routes – e.g. the 006, 007, 008 and so on and the rural services to Helensville, Orewa, Beachlands, Waiuku and Pukekohe. Much of Auckland’s bus network would be able to pay its way; I suspect that all the old tram routes are non-subsidised, along with other trunk routes.

    The main issue I see with public transport is that the ratepayer is essentially paying twice. You have the subsidy to the bus providers, and you also have the profits that the bus providers get to retain on the non-subsidised bus routes. If we had a system like Brisbane, where each route is contracted (the Northern Express is done like this) for a fixed fee, you would be able to use profitable routes to cross-subsidise the not so profitable routes.

    Now onto the subsidisation of rail and buses debate. The primary reason why rail especially needs to be subsidised is as follows. A suburban railway has a cost structure similar to a natural monopoly; high costs for the first passenger, with rapidly decreasing costs as the numbers of passengers increase. The problem is that suburban railways are not a natural monopoly; they compete with buses and cars. If you look at a natural monopoly, you can see that when equilibrium is achieved, the natural monopolist actually makes a loss.

    Here is an image – http://economicobjectorvism.files.wordpress.com/2007/06/monopoly.png?w=480

    MC is the same as Supply, and the Demand curve is clearly marked. For those not economically knowledgeable, where Supply and Demand met is market equilibrium.

    The second reason is that not everything is factored into the financials of a public transport system, especially that of rail. When a railway line is built, you tend to have an increase in the property values of the area as commuting times are reduced, making the area more desirable to those who value their time more highly. Of course, a suburban railway system cannot extract those benefits unless they own the land. For the Jubilee Line in London, it was estimated that the increase in land values as a result of the construction of the line was three times the cost of the line.

    If you factored in the increase in land values, most rail projects within an urban environment would not only break even, but be profitable. The only issue would be making sure that it breaks even in operations.

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  46. Hayek, Bryan and others who think PT is not ecomically efficient:

    The only reason PT has to be subsidised now is because we have been subsidising cars (especially through “free parking” which comes about due to minimum parking requirements, but also through indirect charging for road use) for over 50 years, which in turn has induced car-dependent development, which is in turn poorly served by PT.

    In the early 1900s electric trams were installed and run by a private company at a profit all over the Auckland Isthsmus when the population was less than 1/10th was it is today, for one penny per trip. I checked the Treasury CPI calculater and that is about $1.50 in todays dollars, cheaper than today’s cheapest subsidised bus service. If it was economically efficient then, it is safe to say that it could be economically efficient now if we weren’t subsidising private car use.

    Check out the MOT research report “Surface Transport Costs and Charges” by Booz Allen Hamilton (2005) and you will find that it is private car users that are the most highly subsidised. Also, Donald Shoup “The High Cost of Free Parking”(2005) explains the contribution minimum parking requirements have made to this mess.

    Macroeconomic analysis suggests that optimal economic benefits are acheived at about 5,000 km per capita travelled in a car, which is less than half the current NZ average. (See Todd Litman and Felix Laube’s paper “Automobile-dependence and Economic Development” for example).

    The biggest drag on our economy is actually subsidising private vehicle travel. If we stop doing that, PT won’t need to be subsidised. Particularly after a few year of sustained high oil prices.

    I personally do not think PT is THE transport soultion: development that supports walking and cycling to most destinations will be the most economically efficient. But PT, especially rail, is highly efficient for longer journeys.

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  47. Julie, you do not exactly have the entire picture there. The other reason why PT has to be subsidised is because of capital costs. Back in the 1900s, people used PT to go everywhere, and so there was a good spread of loads throughout the day for the tram services and so there were fewer off-service trams; today, public transport services are more heavily geared towards the peak than they were, due to the rise of the car, and so you have more money being spent on train sets and buses that will only see service on average four hours a day; the rest of the time, they spend out of service.

    Consider Auckland for instance; the present train schedule only requires about 12 or 13 sets to do all the inter-peak services, yet we have 25-30 sets (depends on whether the ADLs are in two or four car configuration). So, you have half your fleet spending most of the day gathering dust. Similar thing occurs with the buses; I have passed by the H&E Bus Depot many times and have seen it anywhere between half and three-quarters full of buses during the day. I don’t seem to recall seeing trolley buses in Wellington operating on weekends. Of course, all these buses and trains cost money as well and they are factored into the financials.

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  48. john-ston,

    I agree with you that if rail systems could recoup the value that they create in neighbouring properties they might break even.

    I think your point about the off-peak capital costs still fits into the picture I am describing. The rise of the car has been been fuelled by subsidies that reduce the economically efficient demand for PT, both off and on peak. The rail system would not need subsidies to compete with the car if we weren’t subsidising cars.

    The capital costs required to support the automobile when it is not being used are huge. The largest one is land required for parking which is not used at off-peak times (each car requires several car parks — one at home and one at several destinations). But also we now spend billions to increase capacity and widen lanes to cater for peak hour traffic, and that investment lies unused for most of the day, collecting dust.

    If you consider the opportunity cost of that land, which could be used for more economically productive uses, then there is a huge sunk cost in the infrastructure required to support the car. The fact that car users don’t pay all of the costs directly mean that demand for car use is higher than it would otherwise be, that land use is more spread out than it would otherwise be. Car ownership is another problem, because once the cost is sunk, there is no incentive to use it infrequently. That is where car share organisations come in to complete an alternative mode system. http://www.cityhop.co.nz

    So, I think we agree. If you unsubsidise the car and start charging directly, in the long term PT won’t need subsidies because it is more efficient than the car. However it will take a while for land use to adapt, so I do think that PT is justified in receiving subsidies while we transition from a car dependent society. But It’s crazy to subsidise both at the same time. It’s a huge waste of money and result in people and goods travelling further than is economically efficient.

    And on an unrelated note I do think that transport is a natural monopoly (roads included) and that competition between different bus companies or parking providers cannot produce the most efficient results. Thus one publicly managed transport authority might use cross subsidies in the way you describe, to enable people in a community to have services on less profitable routes. I definitely think that transport should break even, but not make a profit. Makes sense for profitable lines to fund those that are unprofitable for equity reasons and just for a complete and convenient transport system that pays for itself.

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  49. People who think the private vehicles are the “market solution” are desperately misinformed.

    Julie is correct in that the use of private vehicles are highly subsidised – even more so than PT. The only difference is that vehicles are subsidised indirectly, whereas PT is subsidised directly.

    Firstly, charging the true cost of parking costs would double the cost of the average trip. It is no coincidence that the areas where a market for parking exists, i.e. downtown Auckland/Wellington, are also the places where PT runs at an operating profit.

    Moreover, road pricing that charged drivers the marginal costs of peak hour road capacity expansions would see another major reduction in the use of vehicles. This is particularly important PT systems are high capacity and have, by comparison, very low peak hour marginal costs.

    So the take home message is – the indirect subsidies for private vehicles are huge. Direct and efficient pricing of transport infrastructure would favour PT and – more important in the long term – significantly change land use patterns that fed back into lower vehicle ownership.

    There is an oh so virtuous – and economically efficient – path to a sustainable transport system. Hayek is with the Greens on this one – PT is the efficient solution.

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  50. Question for you Ari – given one sometimes espoused Green objective is supporting local communities making decisions for them, are you happy that the Government over-rode the expressed preference of Johnsonville residents to have a bus line rather than upgrading rail? And if you trot out the argument that Bus and Coach unfairly influenced the result, then your forgetting the same one page submission could have been used by supporters of rail. Making it easy to submit and have your view heard is susposed to be a virtue of democracy.

    I would’ve been unhappy regardless of what was done in that situation- especially as the train is actually better than the buses in Johnsonville right now. Generally I dislike consulting with the public just to ignore them- it doesn’t make much sense.

    But I also dislike arguments based on the popularity of something- popularity is only a good indicator of what to decide when there’s no downside to any of the choices, or when everyone is likely to suffer the downside equally. For instance, let’s say the train service was really excellent, largely pays for itself, (I know we’re fantasising right now, but let’s continue…) but it only reaches a third of people in Johnsonville. Should the other two-thirds be able to overrule the people who actually get to use the train?

    Generally the Green concept of appropriate decision-making means delegating the decision, or most of the say, to the people most effected. That’s not the same as delegating it to the regional councils or having a vote of all citizens in an area. ;)

    Adding to that- that situation was a bit of a false dichotomy. There is no need to choose between the buses and trains when personal transport is so overused and inefficiently used already. Stop subsidising excess roading and invest in both, imo.

    Julie- thanks for adding that :)

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  51. “I think your point about the off-peak capital costs still fits into the picture I am describing. The rise of the car has been been fuelled by subsidies that reduce the economically efficient demand for PT, both off and on peak. The rail system would not need subsidies to compete with the car if we weren’t subsidising cars.”

    The rise of the car was not so much fuelled by subsidies, but by a desire for increased autonomy. You have to consider that large parts of New Zealand didn’t have much of a public transport system, and the car provided a good option of getting around. This was even true of places on the Auckland Isthmus. Of course, much of the network construction was paid for by drivers through fuel taxes which were first levied in the 1920s, I believe.

    I understand you talked about parking; while you can correctly argue that parking is subsidised, especially in a suburban context, bear in mind that without this subsidy, employers would have to pay more to attract staff. Parking at work sites I believe only started to become common in the 1960s and 1970s, after the rise of the motor car as the dominant form of transport. Certainly in the CBD, the parking buildings have also been profitable over the years.

    Add to that, parking became a necessity to attract people from the suburbs and surrounding rural areas; without its parking building, I don’t think that Farmers in Auckland would have survived as long, as people would have merely gone to their new flash shopping centre in the suburbs.

    What I am probably trying to say is that the rise of the car wasn’t so much fuelled by subsidies, but a desire for autonomy as well as normal competitive measures by businesses looking for employees as well as customers.

    “The capital costs required to support the automobile when it is not being used are huge. The largest one is land required for parking which is not used at off-peak times (each car requires several car parks — one at home and one at several destinations). But also we now spend billions to increase capacity and widen lanes to cater for peak hour traffic, and that investment lies unused for most of the day, collecting dust. ”

    However, much of that is paid for by the user. The roading network has been exclusively paid for out of taxes on fuel and road user charges; parking in the CBD is paid for directly, while parking in a suburban context would be the tradeoff for lower pay packets for employees, and higher rents for shops inside shopping centres. Even your garage or carport or whatever is paid for by the user.

    “If you consider the opportunity cost of that land, which could be used for more economically productive uses, then there is a huge sunk cost in the infrastructure required to support the car. The fact that car users don’t pay all of the costs directly mean that demand for car use is higher than it would otherwise be, that land use is more spread out than it would otherwise be. Car ownership is another problem, because once the cost is sunk, there is no incentive to use it infrequently. That is where car share organisations come in to complete an alternative mode system.”

    The opportunity cost I cannot imagine would be that high; if you took away the motorway system, the first thing that would happen is that the value of the land would plummet anyway (changes in transport links, look at von Thunen and others). The only place where it would matter is toward the inner city where land values are high, and even then, I would struggle to see it that way – certainly we still have above surface rail corridors not that far from the CBD, not only here, but in Australian cities too.

    Also, while the car user doesn’t pay all the costs directly, they do pay for it ultimately – like I said before, lower wages and higher prices.

    “So, I think we agree. If you unsubsidise the car and start charging directly, in the long term PT won’t need subsidies because it is more efficient than the car. However it will take a while for land use to adapt, so I do think that PT is justified in receiving subsidies while we transition from a car dependent society. But It’s crazy to subsidise both at the same time. It’s a huge waste of money and result in people and goods travelling further than is economically efficient.”

    The problem comes down to a practical basis. You mentioned car parking before; if Sylvia Park started charging a dollar to use its parking; the number of customers would nose dive. Similarly, if Fisher and Paykel charged its employees a dollar to use its parking, the number of resignations would spike, and there would be demands for higher pay packets.

    While it would be nice to factor everything in, for all intents and purposes, it is impossible to do so. Therefore, you are going to have a mixed subsidy system (as much as I dislike it); the next best option is to design PT around the modern commuter and stop trying to do things like they did in the 1920s.

    “And on an unrelated note I do think that transport is a natural monopoly (roads included) and that competition between different bus companies or parking providers cannot produce the most efficient results. Thus one publicly managed transport authority might use cross subsidies in the way you describe, to enable people in a community to have services on less profitable routes. I definitely think that transport should break even, but not make a profit. Makes sense for profitable lines to fund those that are unprofitable for equity reasons and just for a complete and convenient transport system that pays for itself.”

    Certainly it has the cost structure of a natural monopoly; however, it still has competition. Since you don’t end up with perfect competition, I agree, you don’t hit equilibrium, however, you don’t have a few firms holding you hostage. Certainly some marginal loss making routes should be cross-subsidised. I am aware that cross-subsidies are the reason behind the profitability of Japanese Rail systems.

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  52. Bryan, You can find each region’s overall PT subsidies from road users for the last 16 years here:
    http://www.petroltax.org.nz/statistics.html

    This year’s alloactions plu regional council contributions for each category of PT subsidy can be found here
    http://www.landtransport.govt.nz/funding/nltp/2008/activity-pt-operations.html
    (NLTA=Natioanl Land Transport Account) Subtracting that column from the total cost column gives you the regional ratepayers constibution.

    ECan figures published in The Press last week reveal that Chch buses fleet averages 30l per 100km, and carry an average 16 people on each trip. If each of those 16 people travelled the entire length of the route that would be 1.875 l/100 occupant km, however if those 16 people are only travelling an averge one-quarter of the bus route then bus fuel economy falls to 7.5 l/100 occ. km. If an average car in urban use contains 1.25 occupants and uses 10l/100km then that is 8.889 l/100 occ. km, but if it contains 1.33 occupants, which is consistent with the number of divers and passengers reported injury crashes then it is 7.519 l/100 occ. km. In short, it depends on occupant km whether travelling by bus uses less fuel than travelling by car.

    Two other important factors need to be born in mind when considering the benefits of PT. Road damage and congestion reduction.

    The wear-and-tear component for RUCs on a car is 60cents, on a 9 tonne bus it is $60. Therefore every person who switches from car to bus is more than doubling their jouneys impact on road maintenance spending. Fortunately each year it only cost a few tens of millions to repair the wear-and-tear damage from cars, compared with a few hundred million from heavy vehicles and almost a billion dollars from environmental damage (mostly old age).

    According to ECan passenger survey half their bus passengers would have taken a car if the bus was not available. The other half would not have made that journey at all. Thus when you see ten people on a bus it doesn’t mean ten fewer cars on the roads. Nor does it mean five fewer cars because two of those people would have been travelling in the same car (to produce the 1.25 average occupants per car). Add in the greater space the bus occupies and the turbulence it causes to arterial traffic flows and those ten passengers maybe equivalent to removing just one, or two, or three cars from the roads. Nevertheless the impact could be quite significant in peak periods when traffic flows are tidal and buses are fully loaded.

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  53. StephenR, RUCs for up to 3 tonnes have increased 10% from $32.79 to $36.07. RUCs on a 40 tonne B-train have increased 10% from $385.60 to $424.16

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  54. Julie, The STCC found that it is private car users that are the most highly subsidised only if a return on capital is demanded from roads. To calculate the return on capital the STCC uses the capital value of the land occupied by roads rather than the actual capital invested in building roads and bridges. Although the total capital invested is similar to the current land value that capital investment occured over a period of a century and a half and, most importantly, much of that investment was made to open up Crown lands for settlement. The return on capital acrued from the higher prices the Crown was able to sell the land for when it had access via a dray road rather than a bridal track. Using the value of land adjacent to a road to determine the value of the land occupied by a road creates a circular argument. The land occupied by a road is assigned a value based on the land being used as a road. Used for any other purpose it has only a tiny fraction of that value because of the lack of accessability.

    A good example of this is sections 3 & 4 of the Hawera Borough Betterment Act of 1902:
    3. Landowners [on one frontage of street] to pay compensation for increase in value derived from widening street [when land for widening taken only from opposite frontage].
    4. Landowners [in neighbourhood of new street] to pay compensation for increase in value derived from making new street.

    Taranaki was building tarsealed country roads at the same time Auckland built its electric tramway. Consequently Taranaki farmers were paying the highest rural rates in New Zealand at that time. They were happy to do that because all-weather roads were essential for dairying and the higher rates were less than the increased milk revenues.

    I’m not sure if that last argument also explains why commercial developers are happy to build supercentres with huge carparks directly across the road from upmarket subdivisions. Presumably one developer’s economic analysis concluded that the land was more valuable as residential land while the other concluded that it was more valuable as carparks, without which the stores would have too little value. Either way the land was considered more valuable for parking cars than growing fruit (former orchard).

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  55. This is a fantastic post thread. Public transport is a great source of blog traffic. I’m looking forward to reading through it over the weekend.

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  56. >
    >>
    Why is that a road an infrastructure and a railway is not ?
    >
    Because they are different concepts – in fact, concepts that NEARLY came together under labour in the last Parliament!

    Road is an infrastructure because it is provided for use by others, for a fee. Everyone who uses the infrastructure pays (or should pay,) a license fee to the government for the priviledge, in return the Government provides and maintains roads.
    The creation of On-TRack was identical in philosophy. The government owned the track infrastructure, and companies who owned rolling stock paid a fee to use it. Sadly, the price to maintain was much higher than a private used could afford without losing money in a market that competed with private road transport (e.g. my car). The Labour party’s solution was to pay “a premium price” for a non-productive asset that will have to be subsidised to breakeven in order to both maintain the track and upgrade the rolling stock so as to be competitive with my car.
    Right now, the cost of a 16 KM each way commute, with two of us in a 2 litre car, taking a cost of fuel at $250 per litre, has an opportunity cost that is less than two peak-time multi-trip bus & rail fares. At $2.51 I might give in and invest extra capital to buy a hybrid, which wo9uld allow me to go to $4.00 per litre and still come out ahead.

    Philosophy is a great motivator – but you need economy of scale to make some of these things work. New ZEaland does not have a population big enough to make public Transport truly viable without major subsidy, except in AUckland, where putting it in place would be uneconomic because of the protests (probably led by the Green Party) about the effect of the work to construct an underground mass-transit system on the ecology.

    Happy daze
    So there’s the problem.

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  57. You realise we already have an underground mass-transit system in Auckland? ‘mass’ might be a little misleading, but it’s there!

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  58. I read this week that Kiwitrack or Trackco or whatever it is called has valued the rail lines at $10bill. If so, what will that do to the arguments above about subsidies etc? Surely it will make rail even less attractive/more highly subsidised?

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  59. john-ston-

    thanks for the detailed response! however, I think you are making a common mistake of assuming that people have chosen cars on a level economic playing field.

    You suppose that the rise of the car came about due to a desire for autonomy, not subsidies. My point is that if people had to pay all the direct true costs associated with car use, I don’t believe they would have “desired autonomy” enough to pay for the extent of car dependence that currently exists.

    My evidence for this is based on elasticity studies that demonstrate high price sensitivity (over the medium and long term) to increases in parking charges, oil prices, and road user chargers.

    Transport is my field; I have come to the opinion that the rise of the car has been largely due to subsidies because all of the good academic and professional research supports that conclusion.

    People tend to overemphasise the love that people have for the autonomy given to them by the car. This begs the question of whether they would need a car to have autonomy to access the services the need if land uses weren’t car dependent.

    In other words, if transport costs were higher, businessess and services would be more local, as they were before cars became common.

    And that was convenient and efficient! People could walk to the butcher, baker, shops, etc, and catch the trolley to work. Doesn’t that seem more efficient than every family getting into a car and driving to park at the same supermarket and getting their groceries and driving back to their homes — in terms of land and energy required? Plus all the extra walking meant that people didn’t need to pay to go to a gym to get exercise, so they were healthier.

    You may say that people desire living farther away because they can have larger houses and sections, more amenity, etc. My point is that subsiding transport costs made it cheaper than it actually is to live far away. While good PT increases the value of urban land, motorways and roads reduce the costs of living father away, and this motivates dispersed development, which in turn makes PT inefficient.

    I don’t get the claim (not made by you, but other commenters on this blog) that PT is predictable and easily controlled (therefore takes away freedom)and cars are autonomous and random (therefore enhance freedom). Cars can only go where we provide and maintain the infrastructure, just like trains. And they require heaps of land and energy, so when everyone in Auckland exercises their “freedom” to drive, everyone gets trapped in gridlock. When energy costs go up, people won’t be able to afford to exercise their freedom, or to access anything, because our land uses are so unnecessarily energy intensive.

    Autonomy can more easily be had on a bicycle or walking, the problem is that land use patterns make everything too far away to this. Recent studies suggest that consumers would like to live in communities were walking is easier and enjoyable, they just don’t have that option. I argue that land use patterns have been enabled by subsidies and indirect changing.

    As for parking. All I have to say is that parking always has a cost, we are just paying for the cost indirectly. So yes, if you didn’t have a car park at work, your boss may pay you more, but the rent would be lower for the business (cost of providing car parking bundled with building). That seems like a good thing to me.

    If urban supermarkets didn’t have to provide so much “free” parking, they could either 1) reduce the cost of their goods because their overhead would be lower, or, 2) (more likely) if charging customers directly for parking reduced demand, it would be more profitable to locate smaller shops in areas easily accesible to many people by other means than a car.

    It’s the land use — tranport connection, and it has everything to do with subsidies and indirect charging.

    Don’t have time right now to respond to all of your points

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  60. This is really interesting and detailed stuff – thanks for taking the time to write these large posts guys.

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  61. Alright, I have to admit that I had a good post set up, only to see my internet freeze up when I attempted to do a search, so this may not be all that great

    “thanks for the detailed response! however, I think you are making a common mistake of assuming that people have chosen cars on a level economic playing field.

    You suppose that the rise of the car came about due to a desire for autonomy, not subsidies. My point is that if people had to pay all the direct true costs associated with car use, I don’t believe they would have “desired autonomy? enough to pay for the extent of car dependence that currently exists.”

    The rise of the car occurred in New Zealand in the 1930s, long before the subsidisation that you have suggested occurred – we had the second highest number of motor vehicles per capita in the world in the 1930s. The basic roading network was paid for by users, and it was only in the late 1950s that you started seeing employer provided parking and the rise of parking lots at the new shopping malls. The reason why it occurred was due to our largely rural nature; people didn’t have much autonomy prior to the rise of the motor cars unless they lived in urban areas, where they had access to trams and buses.

    “My evidence for this is based on elasticity studies that demonstrate high price sensitivity (over the medium and long term) to increases in parking charges, oil prices, and road user chargers.”

    Well, in New Zealand, we have seen a near triplication of the price of petrol, as well as increases in parking charges and road user charges over the last seven years, and guess what – motor vehicle usage has not fallen, and public transport usage has risen at an extremely low rate, with bus usage in Auckland for instance, being static for the last five years. Your studies may apply to the Eastern United States and Europe, but remember, New Zealand is fundamentally different to them.

    “Transport is my field; I have come to the opinion that the rise of the car has been largely due to subsidies because all of the good academic and professional research supports that conclusion.”

    Transport for me is my hobby; I have a side interest, but I don’t suggest that I am an expert. How much of the academic research has looked at New Zealand? There may have been a study or two, but not that much. Most of your research would have looked at Europe and the Eastern United States where there was a very good public transport system in the interwar period (it was possible to use interurban trams to get from Chicago to New York), and where the distances between towns was not that great. In New Zealand, outside of the major cities, the public transport system was not too great, with many towns either served by a mixed train or service car, and so, it would be far easier to get people to use a car. Add to this that there was a significant distance between towns.

    “People tend to overemphasise the love that people have for the autonomy given to them by the car. This begs the question of whether they would need a car to have autonomy to access the services the need if land uses weren’t car dependent.

    In other words, if transport costs were higher, businessess and services would be more local, as they were before cars became common.”

    I would emphasise that only some businesses and services were more local prior to the rise of the motor car, others were greatly centralised, such as the department store (in our case, Farmers). Certainly, the butcher, the baker and the candlestick maker would be uneffected.

    Also, remember that New Zealand were early adopters of the car, as I said before. This was in spite of an environment where you had local shops at tram termini and shops in the middle of villages (remember, we didn’t get shopping centres until the late 1950s). The first reason I would suggest is the poor public transport links in rural areas, and linking to that, the desire for people to travel around the country.

    Furthermore, if transport costs were higher, you might end up with localised businesses, but remember that supermarkets have economies of scale and with the right level of competition, this helps keeps prices down. Not only have you increased the prices of transport, but also the prices of basic goods and services.

    “And that was convenient and efficient! People could walk to the butcher, baker, shops, etc, and catch the trolley to work. Doesn’t that seem more efficient than every family getting into a car and driving to park at the same supermarket and getting their groceries and driving back to their homes — in terms of land and energy required? Plus all the extra walking meant that people didn’t need to pay to go to a gym to get exercise, so they were healthier.”

    It may be efficient transport wise, but it isn’t efficient in terms of the price of goods and services. As I said before, supermarkets have economies of scale and so can reduce the costs of their products and with the right competitive environment, pass those on to their customers. Your butcher, baker and candlestick maker don’t have those economies and so need to charge higher prices to their consumers – I don’t think that is efficient.

    Further to that, a supermarket can have a couple of trucks go to it with all the supplies it needs; that same truck would need to make several trips to several different butchers, or bakers, or candlestick makers to deliver a truck load. That is increasing the amount of trucking journeys.

    “You may say that people desire living farther away because they can have larger houses and sections, more amenity, etc. My point is that subsiding transport costs made it cheaper than it actually is to live far away. While good PT increases the value of urban land, motorways and roads reduce the costs of living father away, and this motivates dispersed development, which in turn makes PT inefficient. ”

    Julie, you need to take a look at Australia to see that good public transport has been the greater driver of development in outer areas than roading. For instance, Caboolture, a northern suburb of Brisbane today was a small town in the 1970s surrounded by farms. At the time, there were only nine diesel train services a day from Brisbane to Caboolture (I am not sure how many were from Caboolture to Brisbane). When the line was electrified in 1986; the services to Caboolture increased substantially and sparked the development of that suburb. You can see the same thing happening today along the line from Caboolture to Nambour; old pineapple farms being turned into lifestyle blocks occupied by people who take the train to Brisbane and work.

    This is not isolated either; you have Geelong which is fast becoming a suburb of Melbourne, thanks to improved rail links; you have the Central Coast which turned from farmland in the 1960s to an area with nearly a million people today, thanks to the electrification of the Newcastle and Central Coast Line in the 1980s; you have the Blue Mountains which since the electrification of the line in the 1950s have turned into suburbs of Sydney

    The first instances of dispersed development occurred because of public transport; roading, while it has had influence, I do agree, only has an influence to a certain point. People are not as keen to travel an hour and a half by car as they would be by rail.

    “I don’t get the claim (not made by you, but other commenters on this blog) that PT is predictable and easily controlled (therefore takes away freedom)and cars are autonomous and random (therefore enhance freedom). Cars can only go where we provide and maintain the infrastructure, just like trains. And they require heaps of land and energy, so when everyone in Auckland exercises their “freedom? to drive, everyone gets trapped in gridlock. When energy costs go up, people won’t be able to afford to exercise their freedom, or to access anything, because our land uses are so unnecessarily energy intensive.”

    Yes, however, bear in mind that the roading infrastructure (which, by the way, was in place before the motor car) is far more extensive than any rail network would be. Of course, the other thing is that buses and trains work on fixed timetables; a motor car does not have the same constraint. Further to that, it would take a long time before fuel prices increase to the point where people would not be able to afford to exercise their freedom, and it is very dependent on whether or not alternative fuels get going in any way.

    “Autonomy can more easily be had on a bicycle or walking, the problem is that land use patterns make everything too far away to this. Recent studies suggest that consumers would like to live in communities were walking is easier and enjoyable, they just don’t have that option. I argue that land use patterns have been enabled by subsidies and indirect changing.”

    If I want to go from Auckland to Clevedon to visit someone, I don’t have a bus route, no rail line goes near there, and to cycle would be too far. I don’t have autonomy there. Further to that, I don’t have problems with people desiring more walkable communities, just do not force it upon the general public and as a result, force house prices up.

    “As for parking. All I have to say is that parking always has a cost, we are just paying for the cost indirectly. So yes, if you didn’t have a car park at work, your boss may pay you more, but the rent would be lower for the business (cost of providing car parking bundled with building). That seems like a good thing to me.”

    The problem is though that the cost of providing the parking is more likely lower than the increased pay that you would have to give employees to compensate. That may not be a good thing for businesses, especially as they would also face increasing costs in things other than rent. Further to that, much of the land that is taken up in carparking is not “wasted” as you would imply; if the carparks were not there, then the value of the land would probably decrease (increased density and so on).

    “If urban supermarkets didn’t have to provide so much “free? parking, they could either 1) reduce the cost of their goods because their overhead would be lower, or, 2) (more likely) if charging customers directly for parking reduced demand, it would be more profitable to locate smaller shops in areas easily accesible to many people by other means than a car.”

    Yes, you may end up with the loss of the supermarket and the rise of the smaller shop, however, this does not benefit the consumer as prices would increase (remember how I talked about economies of scale). For a consumer, higher prices are not necessarily a good thing.

    “It’s the land use — tranport connection, and it has everything to do with subsidies and indirect charging.”

    Land use would probably happen the same way whether or not you have motor cars or public transport. Remember, suburbanisation began on a large scale in the 19th Century with the rise of the train, and later on in the early 20th Century with the rise of the tram.

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  62. Hi John-ston.

    Sorry that I only have time for a few points. I note you don’t cite any peer-reviewed evidence, I suggest you put more confidence in peer-reviewed sources than random internet searches.

    “Well, in New Zealand, we have seen a near triplication of the price of petrol, as well as increases in parking charges and road user charges over the last seven years, and guess what – motor vehicle usage has not fallen, and public transport usage has risen at an extremely low rate, with bus usage in Auckland for instance, being static for the last five years. Your studies may apply to the Eastern United States and Europe, but remember, New Zealand is fundamentally different to them.”

    1. Give me a break! NZ is not fundamentally different to the US or Australia or Canada. NZ hardly has an established tradition, it’s not even 200 years old. Car culture is only 50 -60 years old, which is the same in all these other countries. It is a recent phenomenon in the history of human settlements.

    2. a.) Fuel has only been about 4% of the total ownership and operating cost of a private vehicle, which is why fuel price alone doesn’t show a lot of price sensitivity at first. NZ specific elasticity research with regard to fuel prices only can be found here http://www.ltsa.govt.nz/research/reports/331.pdf
    It concludes that short term and long term elasticity in NZ is (-.2 ; -.35)similar and slightly greater than US, CAnada Europe averages. Note that fuel price as I said is a small component of overall driving costs.

    b. remember I said drivers are highly price sensitive over MEDIUM and LONG term, this is because it takes a while for people and businesses to relocate, ie. got to wait for that land use response. We have not had sustained high oil prices until now… so we’ll see what the reaction will be. Also, the Booz Allen Hamilton reserach report called “The Auckland Regional Parking Study” (2001) cites NZ specific elasticity wrt parking prices. It is -0.9 for long stay (7 jours or more), which is basically all commuters.

    c. You’ve got your facts wrong on the current response. State highway traffic volumes have decreased 7% since last year (Transit). Car ownership has remained static over the last 3 years (MOT). Overall PT usage is way up in Auckland, and we have really shitty services. Cycling is the fastest growing mode. (I would say that could be because they have been monitoring it better, but anecdotally in Auckland I have observed many more cyclists on the streets — paticularly at peak hour. And that’s one of the worst urban cycling environments I’ve experienced in an OECD country — terrrible unconnected facilities.)

    “The rise of the car occurred in New Zealand in the 1930s, long before the subsidisation that you have suggested occurred – we had the second highest number of motor vehicles per capita in the world in the 1930s.”

    Yes you are right. As far as I am concerned car dependence did not begin until the 1950s. (PT mode share in Auckland was over 60% in the 50s). While NZ had high car ownership and VKT rates comparable to other countries in the 1930s, but these were still very low compared to now. I said previously that there is an economically optimal rate of annual car usage, and it is probably around 5000km per cpaita. So, until the 1950s, car usage probably was economically efficient.

    The proportion of people living in rural areas is getting lower and lower. Just because cars are practical for some occasional trips (to visit someone in Clevedon) does not mean that they are the optimal solution for every trip, particularly in mostly urbanised communities. That’s where car-share or car rentals come in and could be a better model than private car ownership. You use the car when it is the most efficient and economical solution. And for most NZers most days, that is not the case.

    “Julie, you need to take a look at Australia to see that good public transport has been the greater driver of development in outer areas than roading.”

    I absolutely agree that the transport system you provide will determine the land use pattern you get. But suburbas developed around rail links are by definition NOT car dependent. Doesn’t matter how far out they are, if you can walk to a rail link and get to town, that’s not inefficient. Development spurred by motorways is sprawled out all over the show, because property values right next to a motorway or major arterial are much lower. (check out “Planning for Place and Plexus”, Krisek et. al., excellent research on effect of transport systems on property values)

    As for parking — I can’t do justice to that issue in a blog comment. Check out Donald Shoup, “The High Cost of Free Parking” (there’s a book and a paper both by this title. Book is quite long, paper summarises a lot of it.) Heaps of research, explains everything. Just think, the demand for parking like any other good will be economically efficient when the user pays for it directly.

    cheers!

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  63. Hi John-ston, thought I replied to this but don’t see it. must have got lost.
    Lame. Right well. Here goes.

    I appreciate a lot of your comments, but still think you underestimate the impact of subsidising and planning for cars on land use and mode choice.

    1. Elasticity in NZ context:
    a) NZ is not even 200 years old. It is hardly an established culture. In terms of car-dependence it is no different to California and Australia and Canada. Car culture has only been dominating transport and urban form for about 50 – 60 years. To me, that is a blip inthe history of human settlements.

    b) Fuel has only been a small portion (4%) of the operating/ownership costs of a vehcile, which could explain why escalating fuel costs haven’t made a big dent YET. Remember, relationship is the most price sensitive in the Med and Long term, as origins and destinations change. Since Oil shock of early 80s real price of fuel has trended downwards until a few years ago. So, pretty hard to do any realistic studies of elasticity in NZ context. Yet there is a LTNZ research report (2007) on NZ responses to oil prices which found similar or higher elasticity in NZ to America/Europe. http://www.ltsa.govt.nz/research/reports/331.pdf
    Short term -0.2, long term -0.35. But, if alternatives are provided I am sure this could be higher. Remember this is FUEL only.

    c) Parking in urban areas is much higher, could double the operating cost of a given trip. Accordingly, long stay parking in NZ context is more price sensitive than short stay. The relationship is nearly linear. People aren’t very affected by price increases in parking for short stay, slightly affected for medium stay, and -0.9 for 7+ hours (which affects commuters obviously!) That’s in the Booz Allen Hamilton (2001) Auckland Regional Parking Study

    d) Finally — I think you are mistaken about car use not responding to increased costs. Transit data shows that growth of traffic volumes on SHs in Auckland has been steadily declining and has been negative recently, despite pop growth. MOT have data that suggest nationally car ownership and per capita VKT hasn’t increased in 3 years. ARTA’s business report for May says that PT patronage growth is up to a record not seen since 1989.
    Year-to-date bus patronage is up 1.86%; rail patronage is up 17.5% and ferry patronage has increased by 0.17%. And that’s with very minimal improvements to services! I am sure if the capacity and convenience was greater, uptake would be swifter. Also, cycling is the fastest growing mode in Auckland. (That could be a reflection of increased monitoring, but anecdotally I can say I see heaps more cyclists at peak hour. And not one improvment to cycling infrastructure has been implemented on my route, it’s crappy as.)

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  64. 2. transport and land use

    As for the 1930s, yes car ownership per capita in NZ may have been high compared to other countries — but it was a tiny fraction of what it is now! Car dependence did not really start happening until the 1950s. In the 50s Auckland’s PT and walking mode share was something like 75%, and both have steadily reduced since then. Remember, I said the economically optimal per capita VKT was something around 5,000 km per year. In the 1930s car usage was probably at an economically efficient level.

    80% of NZers live in cities and towns, and that is increasing, so when I talk about decreasing car dependnce I am not talking about the exceptions — I am talking about the majority of routine trips which are to work, school, shops every day. And most trips are short. 50% of round trips are a total of 10km. This could be less if destinations were closer to origins. Of course there are trips for which a car is the most efficient (like going to Cleavedon when you really want to see your friend), but that doesn’t mean that for every trip that is the most efficient means. For most NZers it certainly isn’t, or wouldn’t be, if they had to face the full costs. That is where car share organisations, car rental, and taxi service come in — you don’t need to own a car to have access to one. But once you do own one, and nearly everywhere you go has free parking, you will use it more often than is economically efficient.

    Btw, I just saw Prof. Reid Ewing give a presentation on urban design, transport and public health, and he mentioned that in the States they estimate that the demand for housing in walkable communities is about 30%, while only 2% of the housing stock meets that demand. I say MARKET FAILURE. And any time there is a market failure of that proportion, you can bet there is a subsidy or market distortion, which is my whole point. You don’t need to force people to live in walkable communities, just take away the subsidies for car use and change the planning regulations to make mixed use possible. It shouldn’t drive up housing costs, because every form of transport except cars requires significantly less land. Get rid of minimum parking requirements and the cost of goods and living and everything else should go down. 30% of all the land in cities and towns is dedicated to transport infrastructure — and that doesn’t include service stations or panel beaters or car sales lots. (MOT website Transport Facts.)

    I don’t understand your position about supermarkets and distribution centres. Are you saying we should subsidise private transport costs to enable centralised economies of scale to reduce the cost of consumer goods? That doesn’t seem like an efficient approach — because you get a distorted demand for transport and a distorted demand for consumer goods. In the meantime, taxpayers pay a billion or so to offset our GHG emissions to meet our Kyoto comitments while increasing the fossil fuel intensity of the transport system and economy. Direct charging is more fair and efficient, it allows people to chose not to pay by avoiding a trip, car pooling, walking, cycling, or taking a different mode.

    (I haven’t mentioned stormwater yet, but I should point out that all those paved over surfaces for roads and parking create a huge infrastructure burden in terms of stormwater runoff (and contamination). So even if all the land used now used for cars wasn’t transformed into dwellings or commercial opportunities, it could be green space to trap the stormwater and return it to the water table in a far more efficient manner than stormwater pipes. That would reduce the ratepayer burden of local and regional councils to provide stromwater systems, clean up pollution, and would reduce the risk of damage from flooding, etc.)

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  65. I can’t really explain the whole parking mess in a blog comment, so you should definitely check out Donald Shoup “The High Cost of Free Parking”. (There’s a book and a journal article; article covers it all pretty well, book is quite long) All USA research but theory completely applies to NZ and Australia.

    Finally, yes I agree that the transport system shapes development. That is an important concept and you totally grasp it. However, I don’t consider development oriented around a train line to be car-dependent at all. If you can access goods and services by walking 10 minutes, and walking to a train for longer journeys, then that is not car dependence, and I have no problem with surburban development that doesn’t induce a bunch of car trips. That is efficient Transit-Oriented development.

    So, if the true costs of costs of car use were all internalised, my guess is that you’d get a lot more urban and suburban development that supports PT, walking and cycling, and eventually you wouldn’t have to subsidise PT. And people might travel less, and some consumer goods may cost more, but we’d spend less of our wealth on transport. (Check out Peter Newmand’s research which demonstrates that welathy cities with good PT spend less of their income on transport, and PT doesn’t run a loss). Plus we’d spend less time trapped in traffic jams, and have less environmental and health externalities to pay for and cope with (which no one wants to pay for) and therefore we’d be a richer society. I am all for holistic market solutions.

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  66. (Correction– Peter Newman and Jeff Kenworthy. They did the research for the UN I think.)

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  67. Kevyn,

    Good points, however where this is most crucial is in urban areas where land is already valuable. The value of the land is much lower next to a motorway or arterial than it is next to a light rail line, so if you replace car traffic with other modes, there will be a lot more valuable land, and this won’t cost the public anything to maintain. I recently saw some property research (in “Planning for Place and Plexus”, Krisek et. al.) that demonstrated this effect. Point being, the opportunity cost of the land is highly relevant in the places like Auckland, where a large proportion of NZers live.

    I don’t really think the rural situation is that relevant to my argument, because the highest costs are incurred by car use in cities and urban areas, where land values are high, congestion is a problem, air pollution is a problem, etc. And while I appreciate that some people live in rural areas, as long as they pay the full costs of their car use (including carbon emissions), I have no problem with it. Most people and most transport problems in NZ are in urban areas. And that is where the problems of car dependence are the easiest to fix, and alternatives like PT are likely to be very economic and efficient– if only we cut the subsidies to cars and change out transport and land use planning.

    The amount of parking required for malls and subdivisions is not currently determined by developers, it is mandated by arcane and illogical rules in district plans. The mall could provide a lot more retail space, which could be supported by dwellings within walking distance, if they weren’t forced to provide parking for 85th – 95th percentile of demand. In otherwords, they could provide less parking and charge for it to manage peak demand, and use surrounding areas for residential and commercial property development. This would be a likely market solution if there hadn’t been distortions due to district plans and traditional traffic engineering.

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  68. In connection with this, I remembered something I observed in Tokyo: there you are not allowed to register or own a car unless you can prove you have offstreet parking. My flatmate there paid 50,000 yen a month for his room in our house and 30,000 yen a month for his car park :-).

    I think such an idea in Wellington would do wonders in clearing its narrow streets of cars.

    Slightly of tangent; one of the stupider things i saw in Tokyo was someone trying to drive their SUV down a narrow suburban street only to realise he couldn’t drive out or turn around. Took him ages to back out, and the street was so narrow even pedestrians couldn’t get past him.

    Still speaking of Japan, world’s number two economy, a friend’s place I stayed in Nagano still had a weekly “nightsoil cart” which took away the toilet waste from his house, since there was no sewage network. This was in a town of 50,000. No reason that couldn’t be done here, (in fact in many places it was even up until the 1970s) and its probably cheaper than investing in sewage pipes to every household.

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  69. “Give me a break! NZ is not fundamentally different to the US or Australia or Canada. NZ hardly has an established tradition, it’s not even 200 years old. Car culture is only 50 -60 years old, which is the same in all these other countries. It is a recent phenomenon in the history of human settlements.?

    New Zealand is different in terms of the nature of its population distribution, compared with the Eastern United States and Europe. We have towns scattered around the place, with significant distances separating them – in the Eastern United States and Europe, you have a town of several thousand virtually every few kilometres. Of course, with that increased population density, it becomes easier to justify a wide range of public transport services; for instance, interwar, it was possible to travel between Chicago and New York by various interurbans. That is what I was talking about, not culture, not established tradition. We took up cars at a very early stage, since it made it far easier for rural folk to get about; and bear in mind that public transport links to rural areas, even close to major cities was extremely poor; for instance, in 1928, Upper Hutt residents only had 14 train services to Wellington per day – and that included passenger trains from Masterton, as well as the mail trains. When the line to Waterloo opened in 1927, there were only 11 services to Wellington and 9 services from Wellington.

    “remember I said drivers are highly price sensitive over MEDIUM and LONG term, this is because it takes a while for people and businesses to relocate, ie. got to wait for that land use response. We have not had sustained high oil prices until now… so we’ll see what the reaction will be. Also, the Booz Allen Hamilton reserach report called “The Auckland Regional Parking Study? (2001) cites NZ specific elasticity wrt parking prices. It is -0.9 for long stay (7 jours or more), which is basically all commuters.?

    What is the medium term? We have seen these increases in costs for eight years now since 2000 where petrol prices rose 50% due to increased oil prices and a drop in the NZ Dollar. As I said, there was a triplication in the price of petrol during that period, as well as increases in the costs of parking and other associated costs. Yet we haven’t seen this massive migration to public transport that your studies would suggest. Even if the price of fuel was a small cost for the average car user, it should still have a seeable impact. Unfortunately, public transport usage in Auckland has barely increased over the last five years.

    “You’ve got your facts wrong on the current response. State highway traffic volumes have decreased 7% since last year (Transit). Car ownership has remained static over the last 3 years (MOT). Overall PT usage is way up in Auckland, and we have really shitty services. Cycling is the fastest growing mode. (I would say that could be because they have been monitoring it better, but anecdotally in Auckland I have observed many more cyclists on the streets — paticularly at peak hour. And that’s one of the worst urban cycling environments I’ve experienced in an OECD country — terrrible unconnected facilities.)?

    Overall PT usage in Auckland is barely increased and that is because of the impact of increased rail and ferry services. Bus services have had virtually static patronage at a seasonally adjusted average of between 4 million and 4.5 million passengers a month since 2003. In fact, if you look at the recent ARTA reports, that average has only climbed above 4.5 million passengers in the last couple of months for the first time since 2003. Also, I was talking over the longer term, since 2000, not the last few months – we don’t know whether or not the increase in oil prices is a mere blip, or a more permanent state.

    “Yes you are right. As far as I am concerned car dependence did not begin until the 1950s. (PT mode share in Auckland was over 60% in the 50s). While NZ had high car ownership and VKT rates comparable to other countries in the 1930s, but these were still very low compared to now. I said previously that there is an economically optimal rate of annual car usage, and it is probably around 5000km per cpaita. So, until the 1950s, car usage probably was economically efficient.?

    There was a difference between car dependence and the rise of the car; as far as I am concerned, the rise of the car occurred in the interwar period in New Zealand. I also am aware that public transport had a good mode share in Auckland in the 1950s, however, that was only for suburban Auckland. Areas beyond the suburbs had very poor services during that period; Howick only had a few buses per day; Papakura only had a few trains a day, and so on. Furthermore, any level of car usage was bound to increase the chances of your “subsidies? occurring – the rise of the car would be enough to turn the car into a competitive tool to be used by entrepreneurs and employers alike; and it was that competitive tool that helped cement your car dependence. Plus, of course, the sheer incompetence of public transport providers when it came to adjusting for the new age.

    “The proportion of people living in rural areas is getting lower and lower. Just because cars are practical for some occasional trips (to visit someone in Clevedon) does not mean that they are the optimal solution for every trip, particularly in mostly urbanised communities. That’s where car-share or car rentals come in and could be a better model than private car ownership. You use the car when it is the most efficient and economical solution. And for most NZers most days, that is not the case.?

    The proportion may be getting lower, but then again, it depends on how you define rural. I would be willing to suggest that anything outside of the suburban reach of a city would be rural, so the likes of Pukekohe, Helensville and so on would be in my definition rural. Furthermore, I do agree that the car is not the optimal solution for every trip; however, there are more instances where it is optimal than you suggest. For instance, courtesy of the dispersal of workplaces which started occurring in the 1940s (mostly heavy industry), it became more optimal to use a car to get to work. There is no point in providing a bus service from West Harbour to Papakura for six people that would use it daily; not only is there no point, but it has been shown that unless you have a CBD trip, transit incurs a time disadvantage, and this is even true of Paris, Tokyo, New York and London where you have very good public transport systems

    “I absolutely agree that the transport system you provide will determine the land use pattern you get. But suburbs developed around rail links are by definition NOT car dependent. Doesn’t matter how far out they are, if you can walk to a rail link and get to town, that’s not inefficient. Development spurred by motorways is sprawled out all over the show, because property values right next to a motorway or major arterial are much lower. (check out “Planning for Place and Plexus?, Krisek et. al., excellent research on effect of transport systems on property values)?

    Wait, wait, wait a second. You are saying that if you can walk to a rail link and get to town, that is not inefficient. Imagine I was a resident of Nambour; I would take any one of five trains to get to Brisbane to work; however, over the weekend, I use my car to do the shopping, to have some fun, to possibly visit Aunty Sally in Caloundra. Is this efficient or inefficient? Remember, that Nambour’s rise has been mostly due to the railway line and that the popularity of the area by commuters has seen the decline of the Sunshine Coast’s Pineapple Industry.

    “Year-to-date bus patronage is up 1.86%; rail patronage is up 17.5% and ferry patronage has increased by 0.17%. And that’s with very minimal improvements to services! I am sure if the capacity and convenience was greater, uptake would be swifter. Also, cycling is the fastest growing mode in Auckland. (That could be a reflection of increased monitoring, but anecdotally I can say I see heaps more cyclists at peak hour. And not one improvment to cycling infrastructure has been implemented on my route, it’s crappy as.)?

    The seasonally adjusted average for buses has only recovered back to the 4.5 million mark that it was last at in 2003; that isn’t growth; that is just recovering lost ground. The ARC have been pouring millions extra into buses over the last few years, yet there has not been an increase in patronage – even Mike Lee is getting concerned about it that ratepayer money is being wasted on buses that are carrying air. Remember too that there have been service improvements in the period since 2003, and we still see virtually static bus patronage.

    “80% of NZers live in cities and towns, and that is increasing, so when I talk about decreasing car dependnce I am not talking about the exceptions — I am talking about the majority of routine trips which are to work, school, shops every day. And most trips are short. 50% of round trips are a total of 10km. This could be less if destinations were closer to origins. Of course there are trips for which a car is the most efficient (like going to Clevedon when you really want to see your friend), but that doesn’t mean that for every trip that is the most efficient means. For most NZers it certainly isn’t, or wouldn’t be, if they had to face the full costs. That is where car share organisations, car rental, and taxi service come in — you don’t need to own a car to have access to one. But once you do own one, and nearly everywhere you go has free parking, you will use it more often than is economically efficient.?

    While 80% of New Zealanders may live in cities and towns, you need to factor out those places for which public transport is unviable; your Cromwells, Te Anaus and Queenstowns. When you get down to the cities, your number drops off to about 70%. Even then, it would only be in the big cities were a car dependence busting public transport schedule (i.e. turn up and go) would be viable, and so now, you have 55% of the population.

    Furthermore, remember how I talked about autonomy. I don’t think that people would sacrifice their car even if they lost much of the free parking, or the other “subsidies? for taxi services and the like – that still binds them to the whims of the taxi company and so on.

    Finally, it would be impossible to get rid of free parking and so on – it came about to allow the shopping centres and suburban employers competitive advantage with their CBD counterparts; like everything, it is akin to Pandora’s Box – once it is open, you cannot close it.

    “Btw, I just saw Prof. Reid Ewing give a presentation on urban design, transport and public health, and he mentioned that in the States they estimate that the demand for housing in walkable communities is about 30%, while only 2% of the housing stock meets that demand. I say MARKET FAILURE. And any time there is a market failure of that proportion, you can bet there is a subsidy or market distortion, which is my whole point. You don’t need to force people to live in walkable communities, just take away the subsidies for car use and change the planning regulations to make mixed use possible. It shouldn’t drive up housing costs, because every form of transport except cars requires significantly less land. Get rid of minimum parking requirements and the cost of goods and living and everything else should go down. 30% of all the land in cities and towns is dedicated to transport infrastructure — and that doesn’t include service stations or panel beaters or car sales lots. (MOT website Transport Facts.)?

    They estimate the demand for housing in walkable communities is about 30%? Well, then, let me ask you one simple question.

    When are they going to start construction?

    The cities in America, and indeed throughout the West have been placing greenbelts all over the place and have been bending over backwards to the New Urbanist phase, yet guess what the result has been – housing has become unaffordable. I don’t believe for one minute that the demand for Coronation Street housing is as high as 30%. Furthermore, bear in mind that developers would like to develop more dense housing as it means greater profits for them, so there must be something loopy with Professor Ewing’s comment.

    “I don’t understand your position about supermarkets and distribution centres. Are you saying we should subsidise private transport costs to enable centralised economies of scale to reduce the cost of consumer goods? That doesn’t seem like an efficient approach — because you get a distorted demand for transport and a distorted demand for consumer goods. In the meantime, taxpayers pay a billion or so to offset our GHG emissions to meet our Kyoto comitments while increasing the fossil fuel intensity of the transport system and economy. Direct charging is more fair and efficient, it allows people to chose not to pay by avoiding a trip, car pooling, walking, cycling, or taking a different mode.?

    I suppose I should clear myself up a little here. When the car was rising, entrepreneurs were keen to develop their shopping centres; of course, to attract the punters (competitive measure), they offered free carparking. Over the years, you got the supermarkets which gradually became the anchor stores of these shopping centres – supermarkets were of course more efficient than the butchers, bakers and candlestick makers that they replaced. Once the “Pandora’s Box? was opened, it was too late. To go toward a direct charge approach (which in itself would be difficult, as much of the land is privately owned) would just force prices up for most people – that would not be fair, even though it may be more efficient.

    “(I haven’t mentioned stormwater yet, but I should point out that all those paved over surfaces for roads and parking create a huge infrastructure burden in terms of stormwater runoff (and contamination). So even if all the land used now used for cars wasn’t transformed into dwellings or commercial opportunities, it could be green space to trap the stormwater and return it to the water table in a far more efficient manner than stormwater pipes. That would reduce the ratepayer burden of local and regional councils to provide stromwater systems, clean up pollution, and would reduce the risk of damage from flooding, etc.)?

    They started developing stormwater systems in Victorian times, long before the motor car existed. I think that Auckland’s earliest stormwater pipes date to the 1870s; the car didn’t come to New Zealand until 1904 I believe.

    “Finally, yes I agree that the transport system shapes development. That is an important concept and you totally grasp it. However, I don’t consider development oriented around a train line to be car-dependent at all. If you can access goods and services by walking 10 minutes, and walking to a train for longer journeys, then that is not car dependence, and I have no problem with suburban development that doesn’t induce a bunch of car trips. That is efficient Transit-Oriented development.?

    Um, remember my example about Nambour. I could apply that example to Bunbury, Newcastle, Geelong, Ballarat, Masterton, and other places where development occurred because of the presence of a rail line. They are more car dependent than you are catching on

    “So, if the true costs of costs of car use were all internalised, my guess is that you’d get a lot more urban and suburban development that supports PT, walking and cycling, and eventually you wouldn’t have to subsidise PT. And people might travel less, and some consumer goods may cost more, but we’d spend less of our wealth on transport. (Check out Peter Newmand’s research which demonstrates that welathy cities with good PT spend less of their income on transport, and PT doesn’t run a loss). Plus we’d spend less time trapped in traffic jams, and have less environmental and health externalities to pay for and cope with (which no one wants to pay for) and therefore we’d be a richer society. I am all for holistic market solutions.?

    Of course you would, but the question is the how. Shopping centre car parking is on privately owned land, and no shopping centre would suddenly issue a $1 parking charge; that would just drive people away; similarly with employers.

    Also, not just some consumer goods, but virtually all the basics would cost more. Which is cheaper, the butcher or the butchery section of the supermarket? How about the baker or the bakery section of the supermarket? There might be some mitigation due to the rise of chains such as Bakers Delight and the Mad Butcher, but you still have to remember economies of scale. Furthermore, what cities did Peter Newman look at; ones in Japan? The last time I checked, the only public transport systems that did not run at a loss was Japanese ones (cross-subsidisation of rail by the bus networks), and one in Hong Kong. While holistic market solutions may sound nice, they fly in the face of practicality – you need to first make the public transport system look attractive, and in Brisbane, for instance, that is still a work in progress after forty years and it is similar in Perth.

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  70. Julie, We are not fundamentally at odds by the looks of it. Targetting parking pricing would be the best way to properly price urban transport without impacting on rural transport.

    If there is one suggestion I would make that might help to orient this debate a little better it is don’t confuse “cars” with “roads” or “private transport”. New Zealand has always been heavily focussed on the latter two priorities as witnessed by the fact that our earliest form of district government was the District Roads Board who were allocated “thirds” and “fourths” of the revenue from sales of Crown lands provided the money was spent on maintaining and improving the roads that provided access to those lands.

    In the 1870s one notable travel writer of the day refered to Christchurch as a driving city and Sydney as a walking city. That was in reference to Sydneys extensive use of terraced housing at Christchurch’s preference for garden suburbs. I think the fact that the early settlements were attempts at building utopian communities is a large part of the reason that low rise low density housing predominated from day one. The type of independent people that were attracted to those settlements, the absence of any public transport and the ease with which land could be bought or leased gave us an early history of private transport dominance. The acsendency of public transport in the early 20th century appears to have been but a brief interuption to this tendency. And being very brief, little more than a single generation, the wide spread use of PT seems to have disappeared as quickly as it arrived. In fact there does seem to be a tendency for this phenomonen to be evident for the older and newer cities in the USA and for the older and newer countries in the OECD. That tendency is for cars to displace PT over about the same timeframe that PT took to achieve dominance in urban and inter-urban travel.

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  71. John-ston,

    I appreciate you taking the time to respond, but you are not really basing your arguments on facts and research. You are relying on “conventional wisdom” — especially with regard to parking. Yes, some people believe they need to provide free parking to attract business or employees, but in fact many other developments are stymied because of minimum parking requirements. In the beginning there were minimum parking requirements, this is a market distortion. It was not a conscious decision on the part of businesses to provide free parking in the 1950s and 60s and afterwards, it was a solution developed by planners and traffic engineers to avoid parking management, and developments just absorbed that excess cost. Please look up Shoup’s paper — it is fascinating stuff, especially if you are interested in economics and transport!

    In NZ there are many examples of this happening even now. The Lynn Mall in New Lynn wanted to expand but couldn’t because the District Plan required providing extra parking, for which they would have had to construct a structure which wasn’t economically viable. (The on and off street parking supply in New Lynn is almost 2 times the PEAK demand for car parking.)

    In fact, I have worked with several councils in the Auckland region that have a problem getting the economic development and redevelopment they want because of minimum car parking requirements. That is – developers and owners are keen, but rules require onerous resource consent process to provide less that minimum car parks. The reason people provide car parking for free now is because there is an oversupply, and you know what happens when supply is greater than demand — price falls. The oversupply is because of city planning rules. If we allowed businesses to develop as they wished, the supply would naturally reduce, and eventually the market price for parking would start approaching the true value of the land. If that were the case, it would not be to the detriment of any business to charge for parking, particularly if they were easily accessible by other modes, or if they provided services such as free home delivery. These are market solutions that we aren’t allowing to happen. I am very optimistic that if we take away the market distortion and run some education campaigns, parking supply will reduce, because everyone wins.

    As for stormwater, do you really think the stormwater costs we cope with now resemble anything like those of the original system? The stormwater and wastewater systems were combined until very recently. (Still are in many places in Auckland). Now we’re going through the process of separating them because the flood of stormwater has increased to a point where (on the North Shore) we get constant sewage overflows. I’m not saying there wouldn’t be stormwater problems in urban areas to deal with even if we didn’t dedicate 30% of our land to tar sealed vehicle infrastructure. But I think our problems would be less costly and more manageable, particularly if we adopted low impact development design standards. http://www.lid-stormwater.net/background.htm

    Newman looked at rich Asian cities and wealthy European cities and compared them to rich American and Autralian ciities. Actually, I understand that the new Light Rail in Dublin is profitable.
    But my fundamental point is that if we unsubsidise cars, PT will not need subsidies, and eventually land use will support PT and other modes. You say that’s not practical — I disagree because I know urban form is constantly changing. But even if it was impractical, I think you haven’t given a reason why the principle is wrong.

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  72. “I appreciate you taking the time to respond, but you are not really basing your arguments on facts and research. You are relying on “conventional wisdom? — especially with regard to parking. Yes, some people believe they need to provide free parking to attract business or employees, but in fact many other developments are stymied because of minimum parking requirements. In the beginning there were minimum parking requirements, this is a market distortion. It was not a conscious decision on the part of businesses to provide free parking in the 1950s and 60s and afterwards, it was a solution developed by planners and traffic engineers to avoid parking management, and developments just absorbed that excess cost. Please look up Shoup’s paper — it is fascinating stuff, especially if you are interested in economics and transport!?

    When did New Zealand get minimum parking requirements; I am aware that a considerable portion of the 1955 Master Transportation Plan discussed about the need to expand parking spaces – and I do agree, minimum parking requirements is an idiotic distortion. Further to that, I would suggest that it was likely that free parking was partly a conscious decision as well – you needed to provide your employee and customer greater incentive to work for, and access your business, especially if you were out in the suburbs where public transport links were poor, even in the 1950s.

    “In NZ there are many examples of this happening even now. The Lynn Mall in New Lynn wanted to expand but couldn’t because the District Plan required providing extra parking, for which they would have had to construct a structure which wasn’t economically viable. (The on and off street parking supply in New Lynn is almost 2 times the PEAK demand for car parking.)?

    I agree, that is idiotic – having state mandated parking regulations is a bad idea, and should be gotten rid of. Whether or not that would make a significant change is a different story; I suspect that given the surplus parking, Lynn Mall would have not needed to build the extra car parking capacity

    “In fact, I have worked with several councils in the Auckland region that have a problem getting the economic development and redevelopment they want because of minimum car parking requirements. That is – developers and owners are keen, but rules require onerous resource consent process to provide less than minimum car parks. The reason people provide car parking for free now is because there is an oversupply, and you know what happens when supply is greater than demand — price falls. The oversupply is because of city planning rules. If we allowed businesses to develop as they wished, the supply would naturally reduce, and eventually the market price for parking would start approaching the true value of the land. If that were the case, it would not be to the detriment of any business to charge for parking, particularly if they were easily accessible by other modes, or if they provided services such as free home delivery. These are market solutions that we aren’t allowing to happen. I am very optimistic that if we take away the market distortion and run some education campaigns, parking supply will reduce, because everyone wins.?

    Surely, you should take away the planning regulation; I am of the view that planning regulations should be as minimal as possible. However, I doubt that you would see a massive decrease in the provision of parking spaces – if one shopping centre has surplus car parks, and another one has a shortage of them, then the first shopping centre will use it to their advantage.

    The other thing you forget is that shopping centres need to supply sufficient parking for peak periods in the year; and by that, I mean December. IIRC, before Christmas, Sylvia Park opened their staff car park for customers because all the spaces were full. Botany has had the same problem over the years; you see cars parked on grass verges and in other weird places during December.

    “As for stormwater, do you really think the stormwater costs we cope with now resemble anything like those of the original system? The stormwater and wastewater systems were combined until very recently. (Still are in many places in Auckland). Now we’re going through the process of separating them because the flood of stormwater has increased to a point where (on the North Shore) we get constant sewage overflows. I’m not saying there wouldn’t be stormwater problems in urban areas to deal with even if we didn’t dedicate 30% of our land to tar sealed vehicle infrastructure. But I think our problems would be less costly and more manageable, particularly if we adopted low impact development design standards.?

    Well, it wasn’t until a few years ago that the pipes under the CBD (the same ones that were first developed in the 1870s) were replaced, and that was because of a desire to increase population density in the CBD.

    Also, what do you mean by low impact development design standards? Suburban housing? Coronation Street housing? Hong Kong style apartments? What?

    “Newman looked at rich Asian cities and wealthy European cities and compared them to rich American and Autralian ciities. Actually, I understand that the new Light Rail in Dublin is profitable.
    But my fundamental point is that if we unsubsidise cars, PT will not need subsidies, and eventually land use will support PT and other modes. You say that’s not practical — I disagree because I know urban form is constantly changing. But even if it was impractical, I think you haven’t given a reason why the principle is wrong.”

    Again, the question is how would you unsubsidise cars? While getting rid of minimum parking controls might help, it will still have little impact – you will still need to subsidise transit. They still subsidise transit in London, Paris and New York; yet there ain’t the space for massive carparking buildings, and in the case of London, they charge you to go to the inner city by car.

    Furthermore, urban form doesn’t change that quickly – a building is only redeveloped at the end of its economic life, and that is often a hundred years, as well as being dependent on the nature of the area.

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  73. Hi John-ston,

    Minimum parking requirements are in district plans. Municipal town planning codes probably began incorporating minimum parking requirements sometime in the 1950s but it could have been sooner. They are applied differently in every TA. Wellington CBD and suburban centres have no minimums and some maximums, Auckland CBD has had no minimums and some level of maximums for maybe 10 years. But there is still clearly a surplus left over from the old days. I think the true price would be higher than the current $4 an hour you can pay. Everywhere else in NZ has minimums for now.

    Remember, the peak demand for carparks at Sylvia Park in December is the demand for “free” car parks. There are many efficient and effective means of managing parking demand, pricing is one of them. Shared parking is another (think, peak parking demand for offices is during the week, restaurants and movie theatres in the evening, and shopping centres on the weekend.) The most efficient response is NOT building spare capacity that sits unused 360 days a year. If they are concerned about people getting to the mall, they can offer free shuttle buses or something during peak periods. But anyway I say, let the development decide how to best use their land, I am confident it will not be heaps of underutilised car parks.

    You can find out about LIDD (stormwater design) here
    http://www.lid-stormwater.net/background.htm

    I suggest you check out this excellent and easy to read paper on the market distortions related to transport.
    http://www.vtpi.org/distortions_BPJ.pdf

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  74. Julie, I’m sure you have a good source for your claim that petrol only accounts for 4% of vehicle operating costs. However the figures used in the STCC study suggest it was close to 10% 7 years ago. It also depends on the value of the car since depreciation seems to be by far the biggest cost in the STCC tables. I suspect the impact of rising fuel prices is lowest for company cars and highest for workers cars. My insurance company’s depreciation of the insured value of my car is less than my annual prteol bill. I do notice that they never depreciate my insurance premiums – crafty bugg#rs.

    We import our cars from Japan so maybe we can import kuruma banare too.
    http://www.leftlanenews.com/japans-kuruma-banare-dramatically-decreasing-new-car-sales.html
    “One industry that doesn’t mind the trend in Japan? Car rental companies. Young suburbanites wanting to get away for the weekend have fueled a 30 percent growth in the industry over the last 8 years.”

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