What’s a new rail line worth?Posted: November 23, 2010 | |
One way to answer this question is to consider what else the money could be spent on.
One possibility is the 1,235 people with disabilities in Victoria who, according to this article, are registered with the Department of Human Services for supported accommodation.
One of them is David Graham, a 44 year old who is legally blind, has an intellectual disability and suffers from epilepsy. Last month his 70 year old mother died of cancer. She had looked after him all his life since he was born premature at 24 weeks. Now Mr Graham is on the waiting list for supported accommodation.
Mr Graham’s plight illustrates the importance of opportunity cost, something I’ve banged on about here at length. In plain terms, when you spend money it refers to what else you could have spent the money on i.e. the opportunities you’re foregoing.
The writer of the article, Carol Nader, refers specifically to the $50 million that Ted Baillieu promised he would spend in his first term to commence building a rail line from the CBD to Avalon Airport. The full cost would be $250 million.
She implies that $50 million could instead be spent on something else, like supported accommodation for people with disabilities. It costs $1.5 million on average she says to provide a unit for five residents and an average annual cost of $125,000 to support each resident.
I’ve looked quickly at the policies of the major parties. Labor has a range of initiatives including providing 50 places for people with disabilities who have an older carer. The Opposition says it will ‘champion’ a new national disability insurance scheme to provide lifetime support to people with a disability. The Greens express sympathy but don’t appear to propose much in the way of specific action.
Of course we still have to spend money on economic infrastructure. And there’s no question Ms Nader has chosen an extreme example in the proposed Avalon rail line – you would go a long way to find a more valueless way to spend such a large sum of money. But there are plenty of other transport projects of doubtful value when examined in the context of the broader society’s needs.
For example, it disturbs me that so many people rabbit on about replacing perfectly good bus rapid transit services with new rail lines – whether to the airport, Doncaster or Mernda – when we can’t find enough money to support profoundly disabled people. And it really upsets me when some organisations propose massive transport infrastructure programs as if there weren’t any competing priorities that might also warrant funding.
I recognise that disability is a complex moral, medical and social issue. It is also an emotive issue, but it highlights starkly how every decision has a cost.
People like to think they could get the freeways or the rail lines they want if only governments weren’t incompetent, inefficient, disorganised or spent money on the “wrong” things. There’s an element of truth in that but it’s mostly a self-serving delusion. For the most part you only get what you want if someone else misses out. It is a zero sum game.