Does business oppose congestion charging?

Projected avoidable costs of traffic congestion (BITRE)

I’m very disappointed with the line one of the State’s largest employer associations, VECCI, is taking on road congestion charging. This issue was raised in a report prepared by consultants Acil Tasman for the Competition Commission’s (VCEC) inquiry into a State-based reform agenda.

Congestion imposes such a high cost on business – whether freight or personal business travel – that I’d expect the great majority of VECCI’s members would be better off with pricing. The Bureau of Infrastructure, Transport and Regional Economics puts the current cost of congestion in Melbourne at around $3 billion per year, rising to $6.1 billion by 2020 with unchanged policies.

VECCI says it is opposes the idea of congestion charging for three reasons. First, motorists already pay both the CBD Congestion Levy and the fuel excise. Second, there’s no spare capacity in the public transport system to take displaced motorists. Third, the economy can’t handle another tax on top of the forthcoming mining tax and the carbon price.

In regard to VECCI’s first objection, the obvious point is that these existing imposts on motorists aren’t working – many Melbourne roads are still congested at peak times. Despite the lofty title, the CBD Congestion Levy is actually a tax on parking. It’s only had a very minor impact on traffic because most drivers don’t pay it personally – their employers do. It isn’t in any event peak-loaded and of course it does nothing to manage the level of through traffic. And as per the name, the levy only applies to the CBD. The $0.38 fuel excise tax (no longer indexed) does reduce the overall level of travel by motorists, but has no appreciable effect on congestion because it doesn’t vary with the level of traffic or time of day.

So far as the “no spare capacity on public transport” objection is concerned, a congestion price only has to remove a relatively small number of vehicles in order to get traffic moving at an acceptable speed. The vast majority of motorists won’t come seeking a seat on the train – they will continue to drive but, rather than pay with time as they do at present under congested conditions, they’ll pay in cash. Their numbers may increase over time, but so will public transport capacity. Also, revenue from congestion charging should be applied to improving public transport and increasing capacity.

VECCI’s argument that the economy can’t handle another tax is about as nakedly political as you can get. Australia is one of the world’s most vibrant economies and has been growing for 20 years. Motorists, both business and private, can afford to pay their way. In any event, a congestion charge isn’t a tax — as the name says, it’s actually a charge. Motorists pay directly for the quantity of road space they use and get a direct and immediate benefit – faster travel. That means motorists who travel more pay more. It also benefits drivers from all income strata by enabling them to reduce delays when they make high value trips. Read the rest of this entry »


How can we improve our schools?

High demand: tram or bike? (Fed Square, late morning, Tuesday 9 November, 2010)

The editorial writer in The Age today reckons many teachers and parents will be underwhelmed by the Government’s new $208 $258 million Education for Life promise. The writer bemoans the lost opportunity for the Government to advance some “big ideas”.

I agree that Education for Life won’t rattle the windows of most voters, but the objectives of the program are important and worthwhile. As explained by VECCI, it addresses the disengagement of many young people from the education system. This is a program that, if done well, might help to tackle the sorts of safety and security issues around trains that I discussed yesterday.

It’s a pity, though, that the Premier didn’t use the opportunity of the campaign launch to also pick up on the important message in the new report on teacher effectiveness released this week by Melbourne’s own Grattan Institute, Investing in our teachers, investing in our economy.

In the past I’ve wondered what the purpose of some of the Institute’s reports is, but not this one. Its message is clear and direct – improving teacher effectiveness is the single most important reform that could be put in place to improve educational outcomes.

The report makes three key points. Read the rest of this entry »


Do employers encourage too much driving?

Guess who is at fault in bicycle-car smashes in The Netherlands?

Monash University’s Professor Graham Currie is quoted in The Australian (6 October) as arguing that employer subsidies for staff car parking should be removed:

When buildings go up in cities, the parking component is about 37 per cent of the total cost. Is that cost passed on to the people who use it or borne by society as a whole? I can tell you it’s the latter because most car commuters don’t pay their own parking; their employers do. The costs of this ‘free parking’ flows through into the price of goods and services, so we are all in effect subsidising the car owners who drive into the city. Traffic congestion in Australian cities is unlikely to diminish because so many car commuters don’t pay their own parking bills

The Victorian Employer’s Chamber of Commerce and Industry (VECCI) has hit out at Professor Currie, arguing that many employers offer subsidised parking as a way to woo workers to city jobs where it is otherwise inconvenient or untimely to use another transport method, like the train or bus:

The way to lessen inner city congestion is not to restrict choice but to increase it – making it more attractive to travel on trains, trams, buses or to walk/ride. Ultimately employers should retain the freedom to offer whatever incentive it deems it requires to lure the best calibre of workers to its business.

I don’t buy VECCI’s line about not restricting choice, but I agree entirely that employers and their staff should generally be free to negotiate whatever lawful remuneration packages they want. However I think it’s an entirely different matter if those packages are underwritten by tax payer subsidised car use. Read the rest of this entry »


Should bicycles be registered?

The Victorian Employer’s Chamber of Commerce and Industry (VECCI) reckons bicycles should be registered and cyclists licensed.

VECCI’s recently released Infrastructure and Liveability policy paper, which is intended to influence public debate in the lead up to this year’s state election, argues that “road users should be treated equally. For example, all road users, including cyclists, should be licensed and vehicles registered”.

There are four key arguments commonly advanced against compulsory registration.

The first is that registration, as it is traditionally understood, is a charge for road damage, which rises exponentially with axle load. Since bicycles are extremely light compared to cars and trucks, the amount of damage they do is inconsequential.

The second is that fees for compulsory third party personal insurance are collected as part of the registration process. Again, bicycles are so light that the likelihood of cyclists seriously injuring other road users is very low (although they might injure themselves).

The third argument is that the scope for “incentivising” cyclists to obey the road rules via registration is limited. The main offence committed by motorists – speeding – doesn’t apply to most cyclists. They don’t avoid tolls because they’re not permitted on freeways and they don’t do a runner at petrol stations. Some might get picked up running red lights but not enough to justify the administrative cost of registration or the inconvenience of arming bicycles with legible number plates.

Finally, it is contended that cyclists impose very low, even zero, costs on the environment compared to motorised vehicles. Accordingly, they should be exempted from registration charges. Read the rest of this entry »


What’s VECCI’s vision for Melbourne?

I've always said street art is rubbish (video)

The Victorian Employer’s Chamber of Commerce and Industry (VECCI) released five policy papers on Monday aimed at guiding the pre-election decision-making of the major parties.

The paper on Infrastructure and Liveability is of particular interest to the Melbourne Urbanist. Apart from a short introduction emphasising the economic importance of infrastructure, it’s essentially a list of actions, some very specific, which looks like it was cobbled together by the proverbial committee.

It includes some current projects such as the planned Melbourne Metro, but there are some other ideas that are very interesting, to say the least. Read the rest of this entry »


Is the Lord Mayor’s new parking charge a ‘money grab’?

The Lord Mayor of Melbourne, Robert Doyle, has bought himself a heap of trouble with Council’s decision to impose a flat $4 charge for parking in the CBD from 7.30 pm to midnight (see here, here, here and here).

The new fee will apply to 3,000 on-street metered parking spaces that are currently free at night. It will raise an estimated $1.9 million in revenue to be used for general Council purposes. Council is expecting to earn a similar amount from fines associated with the new policy.

While some people think it will encourage greater use of public transport, others say it will have a severe impact on restaurants, movies and shows and is just a naked grab for money. Another criticism is that public transport is too unsafe at night and finishes too early to provide a satisfactory alternative to driving. Others vow they’ll stop visiting the CBD and go elsewhere.

I find the reaction extraordinary. In my view Council’s action is understandable – any time you have a scarce resource that is under-priced there are bound to be some perverse and inefficient outcomes. Melbourne is a 24/7 city – the streets of the CBD are frequently heavily congested at night, particularly on Friday and Saturday nights. Charging for parking at night makes sense.

The Melbourne Business Council however is concerned that people coming in to the CBD to see Fame or Sir Ian McKellen in Waiting for Godot will now have to pay for parking. VECCI is worried about the impact on restaurants, small bars and theatres. But who shells out $100 plus for tickets to a show or dinner and quibbles over $4 for parking? On the contrary, I expect patrons will feel they’re better off if it loosens up parking options a bit. Read the rest of this entry »


Should bicycles be registered or cyclists licensed?

There was a major debate over the Easter weekend on the VECCI blog about whether or not bicycles should be registered and/or cyclists licensed. It was initiated by an online poll started by VECCI. As of Monday night a narrow majority had voted in favour of licensing (51:47) and mandatory education of cyclists (50:45). Not clear to me why you’d license a cyclist other than to educate/train her, but it’s not my survey.

My view is that registration is not a good idea. However there’s a stronger argument for licensing notwithstanding there are some real difficulties in implementation. Read the rest of this entry »