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The Forum > Article Comments > Congestion charging schemes for Australian cities > Comments

Congestion charging schemes for Australian cities : Comments

By Dick Wharton, published 25/7/2005

Dick Wharton argues federal government should take a lead and co-ordinate an infrastructure plan to combat traffic congestion.

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Congestion levy 2.5 % of gross income for personal and 5% for business income for those living within 50kms of CBD. Maybe double for that hell hole in NSW.
Posted by Kenny, Monday, 25 July 2005 10:37:31 AM
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Dick Wharton asks

"What then are the underlying causes of the congestion problems we are now facing?"

, however his discussion misses one of the most crucial points of why congestion is increasing, i.e. population growth in our cities and Australia as a whole. Due mainly to high immigration rates, Australia's population continues to grow at very roughly 1/4 of a million a year. Most of these new people will help to congest the transport system even further. With rapid population growth one is faced with the prospect of continually upgrading roads etc just to keep congestion the same as it would be without population growth. Eventually, as all mega-cities have found, you will lose the battle to keep traffic flowing above walking pace.

Possibly the most important person affecting future congestion is the federal minister for immigration who sets the annual immigration quota. The other is the treasurer whose half-baked calls for every family to have three kids does not help our problem of growing population - and inevitably congestion in the cities.
Posted by Ridd, Monday, 25 July 2005 11:41:14 AM
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This article is a continuation of the prevailing metro-centric view of theses problems. For example, the ink is barely dry on the South East Queensland Regional Plan, designed in major part to manage the unsustainable growth that produces the major diseconomies of scale outlined in the article.

This plan compells higher densities and high rise on suburbs that do not want them while funding expensive educational, health and road infrastructure in bare paddocks beyond Ipswich where no-one wants to live. Development rights on 80% of the region have been stripped away so that the forecast million extra settlers by 2025 have no choice but to settle on the State and Local government's existing 40,000ha stock of freehold land. In short, the entire development business in SEQ has been "oligarched", as it were, between big business and big government.

But what does Premier Beattie then do? He swans off to Melbourne and Sydney to attract even more settlers to the SE Corner of the state. Brisbane is to be "rebadged" as a sophisticated place to visit (and then settle)while prospective settlers to other parts of the state have dried up due to the disaster in country health services.

The relationship is hardly new. Settlers follow prospects. Jobs and investment follow settlers. Seats of Government attract more investment and create better, head office job prospects which attract more settlers. And if there is only one seat of government in one large state then an increasingly unsustainable metropolis and all it's congestion is the only likely outcome.

Disperse the governance, disperse the benefits, disperse the impacts and reduce the scale and difficulty in metropolitan diseconomies. Any duplication of functions by new states would cost a lot less than $8-9 Billion a year.
Posted by Perseus, Monday, 25 July 2005 12:20:52 PM
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My first problem with the article is the concept of "congestion cost". The report upon which it is based (BTCE 1996) does not appear to be available on the net, and it is difficult to work out its methodology from the plethora of follow-on reports that use its data. But it would appear to be pollution-based, and therefore health-related, and if so, we are in territory very similar to "smoking-related" or "obesity-related" costs.

How these translate into what you or I would recognize as actual dollars is something of a mystery, and tends to fluctuate wildly with different researchers.

I suspect they are not real dollars at all. With real dollars, you can find out who has them now, and between what points are they presently moving. Then you would be able to work out who would actually trouser these dollars in future, if we solved the problem of congestion.

If on the other hand we are looking at the same kind of "social" costs as smoking and obesity, why don't we tackle them in the same way? With pointless advertising campaigns and patronising slogans...

My next problem is the whole "user pays" concept, which is based upon dubious logic. The "pensioner", that Mr Wharton argues should be charged the same to use the road as the commercial traveller, is surely going to be driven off the road, thanks to the additional cost. Meanwhile, the travelling employee continues to drive and congest, allowing his employer to pay, and to then pass on the additional cost to the consumer.

E.g. the pensioner, who thereby suffers a double whammy.

Flaky stuff. Very Flaky.
Posted by Pericles, Monday, 25 July 2005 3:09:52 PM
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The proposed $0.5 billion dollar "upgrade" of Kuranda Range Road in the Wet Tropics World Heritage Area of FNQ,(near Cairns) from a scenic forested 2-lane road to a 4-lane concrete and steel highway is a case in point.

The proposal is driven by regional planning which has recommended an urban node supporting 63000 people by 2036 (current population 4000)- totally dependent on a road corridor to access employment and most services, 25km away in Cairns.

It's time the government started investing in rail - for freight and public transport - and planning urban centres which are largely self-contained. Getting the freight of the roads and onto rail would be a good place to start. In the meantime, we need to impose a curfew on heavy freight vehicles to avoid peak traffic hours.

Australian's will never totally lose their love affair with the motor car and the independence/mobility that mode of transport provides - but public transport incentives (effficient, reliable and affordable) and conversely, private transport disincentives, is a step in the right direction to reduce our dependence on and demands for more and more road infrastructure.

A reduction in traffic congestion is not the only benefit. Good quality public transport services also has a lot to offer in terms of social equity and environmental benefits.

It's time to stop talking about integrated, strategic transport planning which helps reduce greenhouse gas emissions, delivers environmental outcomes and offers social benefits (eg: the lofty ideals of AusLink) and start making it happen. There's no excuse in the 21st century to put it off any longer.

As for population growth pressures - I dont know too many local or state governments who don't encourage it - and then bleat about the need for more dams, roads, power etc etc. Some sustainable population planning would be a step forward as well
Posted by Frogmouth, Monday, 25 July 2005 4:10:25 PM
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Instead of all the talk about traffic congestion, and more regulations to solve it.

Why don’t we talk about why it’s as cheap to take you car as go with 30 others in a bus or train when you remove the public transport subsidy?
Even with it, it still does not attract enough people to keep the roads at a reasonable traffic density.

One way to help would be to tool all roads, but only when traffic density reaches 80% of max density.
Would work like the electronic tool roads in the east coast?

Cheers
Posted by dunart, Tuesday, 26 July 2005 12:26:32 AM
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We are or have reached our population limit in Australia - at least on the east coast. From the perspective of air pollution, water resources, energy, housing and traffic congestion.

However, politicians who have only a short term view will try to convince us otherwise. For anyone living in Sydney with the daily smog, heavy traffic, water restrictions, public transport problems etc and the knowledge that every week about 1000 newcomers are moving in, one can only wonder the why we are letting this situation get worse.
Posted by mtb, Tuesday, 26 July 2005 8:35:45 AM
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The key to Australia's genuine future prosperity are specific water projects aligned with a planned decentralization programme Nationally.

Day by day Governments Federal,State ,Local are notoriously incapable of planning any major infra structure developments. QED
Posted by adam weishaupt, Tuesday, 26 July 2005 9:15:17 AM
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Dear Pericles, the fact sheet at the end of the url indicates that these costs are calculated from a standard 15,000km pa and on the proportion of city KM in passenger car equivalents and the proportion of time spent stopped in traffic. It is not flaky at all as it would include the proportion of vehicle trips taken on toll roads etc.

The fact sheet includes data for Adelaide, Perth and Canberra as well (but not Hobart) and it is the data for Canberra that really underlines the importance of effective decentralisation as the cheapest solution to metropolitan diseconomies.

Canberra's 2015 projected congestion cost per vehicle km is only 5.9 cents/km while Sydney's is 23.2 cents/km and Brisbane's is 53.5 cents. So any metropolis with a projected population growth of a million extra people over, say, 25 years, can make substantial savings for its existing residents by encouraging some of that growth to settle elsewhere.

A new provincial capital of Canberra's current 300,000 people would not happen overnight but a more realistic 100,000 each in three new capitals would buy almost a decade of valuable metropolitan breathing space at a lower cost than Canberra's 1995 estimate of 2.2 cents/km.

The saving for Sydney would be a net 21 cents/total vehicle pcu km x circa 8400km per capita = $1,764 per person x 300,000 = $529 million pa. For Brisbane it would be a net 51 cents/total vehicle pcu km x 8400km per capita = $4,284 per person x 300,000 = $1.285 billion pa.

That leaves an awful lot of change to cover any duplication costs of additional provincial parliaments, dont you think?
Posted by Perseus, Tuesday, 26 July 2005 11:33:35 AM
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What neither the article nor your post illuminates, Perseus, is a) what exactly constitutes a "congestion cost" and b) who pays it, to whom.

I too saw the spreadsheets, and followed the line items' references to the sources, as far as I was able to do so online. There seems to be a disconnect between the base calculation - kms travelled, time spent stationary etc. - with actual, real dollars.

One of the calculations I found when following the trail identified a "cost of a year's life", which was then multiplied by the putative years life lost due to pollution, caused by congestion etc etc. To me, that is a long trail to follow, since you have to agree with every step (life is shortened by pollution, caused by congestion etc.) and on the calculation (one year of life is worth so much) to be able to work out who is losing and who is winning. After all, two years shorter life may be something of a nuisance to the individual, but release two years-worth of nursing costs to the community.

Until and unless there is some more concrete calculation, the entire argument is nebulous and illusory, fuelled only by the emotion of "wouldn't it be nicer if..." Sure, it would be nicer if the air is cleaner, but putting a dollar value on it in this manner is entirely unconvincing. Except to the folk who make money out of dreaming up the figures, of whom I suspect there are many.
Posted by Pericles, Tuesday, 26 July 2005 12:03:56 PM
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I hope you don't fall off your chair, Pericles, when I advise that I actually agree with your wish to see the original work and follow the entire calculation. If you find it post the url for us here, please.
Posted by Perseus, Tuesday, 26 July 2005 12:40:35 PM
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Car usage is a great indicator of several urban-consolidation woes.

The myth that people living in high rise and on transport nodes not needing or having cars is demonstrated (all over Sydney) to be a false, text book wish, all the more cruel due to the failed rail system and over extension of other infrastructure.

The proposal for a congestion tax, like the incredible developer discounts provided by inept public accountability of these modern day bucaneers, will mean nothing to the rich & privilaged - who will reap the benefits of a faster chaffeur driven drive from the Airport to HQ.

Decentralisation in combination with a radical re-assessment of consumerism might have some more real lasting & measurable results!
Posted by Reality Check, Tuesday, 26 July 2005 1:47:07 PM
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Always pleased to find a fellow seeker-after-truth, Perseus, but as far as I can discover the original report is not available on the Internet. You can order it from BTRE direct, apparently, by email addressed to btre@dotars.gov.au

I would do it myself but i) by the time it arrives, the forum will have moved on and ii) life's too short.

I wonder if Mr Wharton has actually read it himself - after all, it was his reference - and will perhaps enlighten us?

Mr Wharton? Over to you.
Posted by Pericles, Wednesday, 27 July 2005 4:32:52 PM
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Seeker of truth? I just like to outwit Gorgons and decapitate Medusa's, Pericles, it's better than sex. Seriously, I should take issue with your general contention (if I have it correctly) that the notion of 'costs' should be limited to actual exchanges of money. I think it is entirely appropriate to cost the time people spend in traffic at the hourly equivalent of average weekly earnings (AWE)even though no money has changed hands.

Some could argue that an extra 15 minutes sleep-in for a working parent is far more valuable than the AWE equivalent whereas an extra 15 minutes for the "Big Brother" audience would have questionable value indeed.

What we do know is that in large cities the methodology for assessing the priority of government expenditure is quite different to that used to assess regional expenditure. Regional expenditure tends to be based on a purely cost recovery basis while urban expenditure need only cite the opportunity cost of not making the outlay.

The airport railway lines in Brisbane and Sydney are good examples. These new lines were never going to pay their way because the minimum standard of such infrastructure was way beyond the likely revenue streams. But the mere promise of less congestion on adjacent roadways was more than enough to swing the necessary public opinion behind these projects.

Clearly, leisure time forgone has a value the same as work time foregone has an impact on business efficiency and profitability. They must both be valued in analysing congestion.
Posted by Perseus, Thursday, 28 July 2005 11:37:21 AM
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If you find decapitating Medusa is better than sex, Perseus, you are in serious need of a vacation to readjust your perspective. Breakfast at your place must be a nightmare...

You are right, my contention is that if you are going to measure a problem by its dollar cost, it is only reasonable that these should be in the form, as you put it, of actual exchanges of hard currency. My reasoning is that dollars are precisely, and only, dollars.

If you want to measure inconvenience, like an extra fifteen minutes in traffic, or dying early, that has a wildly fluctuating value from one person to the next - as you also rightly observe. To then select an entirely arbitrary yardstick such as AWE that will give you a dollar figure, simply for the sake of having a dollar figure, is thoroughly misleading. I might spend that extra time(in the traffic, that is, not dying early) learning a foreign language, which would render the time actively useful, and offsetting notional dollars elsewhere to turn a net profit.

The reason it is misleading is that the dollar figure will then be treated as real. If a spending proposal is then produced that "uses" these savings, it will be regarded as cost-justified, when in fact it is - I strongly suspect - based on pure unquantifiable convenience factors.
Posted by Pericles, Thursday, 28 July 2005 12:47:28 PM
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Real men don't take vacations, Pericles, they accumulate them so they can have serial mid-life crises.

You appear to be arguing for the blanket exclusion of the assumption in any analysis. I agree with most of what you have said in relation to 'remoteness of cause and effect' but add the qualification that assumptions do have a role in understanding the cost of policies, whether you like them or not. The question is, of all the assumptions that could be employed to enable consideration of a fact that is difficult to determine accurately, which one is most valid. And until a more appropriate assumption is provided, one can quite reasonably use AWE as a basis for costing wasted time.

Thanks for the lead on the report. It is serious grist for my mill.
Posted by Perseus, Friday, 29 July 2005 10:18:20 AM
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I have just acquired the source reports on this, Pericles, and can say that the methodology is reasonably sound. Appendix XIII does conclude with a caution in respect of the degree of uncertainty. But it should also be noted that this analysis does not consider the actual costs of new roads that are demanded by an expanding population nor the exponentially higher cost of widening urban roads.

It does calculate the cost of time spent in traffic on both a fuel cost and a total cost basis. The overall national (fuel based) value of commuter travel time was $15.19/hour. And this was validated by modelling of propensity to pay, or not pay, a toll of $x to save time in transit. It represents what the community is willing to pay to avoid congestion.

So while you suggest that only actual transactions should be costed, this methodology would put this valuation on the same basis as the listed share price of a listed company. It does not require every share to be traded for the market to determine the value of every share.
Posted by Perseus, Tuesday, 9 August 2005 11:26:06 AM
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Motorists wear 100% of the cost of congestion. To slug them with an extra cost in the way of a tax hardly seems fair
Posted by Terje, Saturday, 20 August 2005 3:51:15 PM
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