Tuesday, 17 March 2009

Right decision. Wrong decision. [Update 3]

Two decisions in on one -- one of which is sensible, the other of of which is completely f'ing ludicrous.

The first decision is the right one: to scrap Labour’s ridiculous Auckland regional petrol tax.

Transport Minister Steven Joyce says the government will not proceed with regional fuel taxes, which are an "expensive and inefficient" means of collecting revenue.

Good decision.

Here’s the bad one.  To raise the national petrol tax to make up for it. To allow Labour’s planned additional theft to go through, and to add another impost of their own on top.

From 1 October this year motorists will pay an increase of 3 cents per litre in fuel excise duty and drivers of diesel vehicles will pay the equivalent in road user charges. A second 3 cents increase will occur at October 1 next year. Each 3 cent per litre increase includes an annual increase of 1.5 cents per litre scheduled by the previous government.

Bad decision.

After last year’s increases we’re already paying the government over fifty percent of every litre we put in our cars.  They already take more in excise taxes and GST on petrol than the local petrol companies earn for importing, refining and selling the stuff.  And rather than dropping fuel taxes, we’re all going to be dunned even more to increase the government’s revenue, and to pay for Labour’s ridiculous plans for an electric train set around Auckland.

Just dumb.

Why can't electrification be paid for out of the profits made by the existing train set?  Oh, that's right . . .  there aren't any. The ‘system,’ used by just 30,000 Aucklanders out of a population of 1 million, is parasitical on the real transport system – and on the rest of the country.

Just like the government.

UPDATE 1:  Despite being at work in downtown Cairo, Liberty Scott is still all over this, and with details a'plenty on why the decision to raise the tax is is wrong, ill-thought out and a waste of our money -- he kills of a few myths raised by Idiot/Savant, which Scott says are "just pure posturing. In short, he doesn't know what he is talking about."  Not for the first time.

It's also, says Scott,

a lost opportunity to make Auckland councils think about a user driven transport strategy instead of the failed "Smart Growth" rail fetish that has done nothing to relieve congestion in US cities.

    ARTA/ARC have dressed up the rail business case to suit the answer they wanted, on grounds that the government's own funding agency would question. It will continue to cost taxpayers $5 per trip when electrified, it will generate very modest benefits, and most of those who benefit will be those who get their trip subsidised. It will make diddly squat difference to those using the road network, at best it might increase property values for those living nearby a station and work nearby one on the same line, or businesses who may have a catchment from those able to use the train.
    At best, it needs independently appraised - not by anyone in Auckland local government - to determine if the appraisal itself is robust, the levels of confidence and optimism bias around costs and benefits, and whether a thorough appraisal of alternatives has been included.
    Sadly, National has been taken for a ride, and you're being asked to pay.

UPDATE 3:  Bernard Hickey, bless ‘im, reckons this Auckland electrification decision is just as bad as Cullen’s Kiwirail debacle

Why on earth is the National government making the same mistakes as Labour did with rail? . . .  Surely someone has to point out that pouring good money after bad money is still a bad idea. Where’s the analysis saying it makes sense for KiwiRail to run this?

Good questions, to which he gives a thorough fisking.

(Be careful clicking the link, however.  For no apparent reason It contains pictures of a grown man wearing a bicycle helmet!)


  1. I think you mean 3%...

  2. Oops.


    Me, that is.

    Ta. :-)

  3. PC

    There is an interesting book written by Bent Flyvbjerg where he investigates megaprojets (a.k.a. boondoggles) and what passes for "analysis" used to justify them.

    He surveyed many big projects (similar to the Ak rail electricfication) and discoered that the costs are always understated at the project promotion stage, the projected patronages and income stream generated from users is always over-stated at the project promotion stage and that, in the end, these things end up costing the local economy hugely. Taxpayers always get lumbered with the on-going bailout costs that these projects inevitably result in.

    The Auckland rail electrification is no different. It is a massive theft and no more than that.


  4. Politicians think they are in power because they are smarter than everyone else, yet they come up with lazy revenue gathering policies like this. Fucking unacceptable.

  5. Good news from my friend Randall O'Toole – the Anti planner.

    "Good news! You can save money by selling your car and riding transit instead. The American Public Transportation Association (APTA) says the average person can save $8,500 a year taking transit instead of owning a car.

    This is based on the AAA cost-of-driving formula, which says that driving costs an average of $0.54 cents per vehicle mile. Funny how Americans only actually spend $0.39 cents a vehicle mile, at least according to the Bureau of Economic Analysis. The difference? The BEA uses actual costs while AAA numbers are hypothetical.

    So that might reduce the savings to only $6,100, which is still a lot. But the other big thing APTA is leaving out is the huge subsidies to transit. Transit subsidies amount to $0.61 per passenger mile. APTA assumed that, prior to giving up their car, the transit rider drove 15,000 miles a year. At $0.61 per mile, a transit rider who rides 15,000 miles a year gets about $9,150 in subsidies.

    So you can save, maybe, $6,100 a year by imposing more than $9,100 in costs on other taxpayers. Good deal!

  6. We all to remember the efficiency of a transport mode is not determined by the efficiency of the vehicle.
    It is determined by the efficiency of moving the freight or the person.
    For example a container ship is the most “efficient” transport vehicle in the world.
    But if you want to ship green lipped mussels from NZ to California then an aircraft is much more efficient.
    People keep saying trains are more efficient at carrying freight than trucks.
    If they were then all freight would go by truck.
    It doesn’t. Some does because the combination of journey length and the bulk of the cargo makes the train mode efficient.
    But the average freight trip in NZ is only about 30K and trucks beat rail hands down over such small distances.
    When you say “Portland Rail is very efficient you have to identify “who for and for what?”
    As Aaron Widavsky once said in a class in which we had all agreed that efficiency was “a good thing” - “So would you like a train carrying Jews to Belsen to be efficient?”

  7. Owen

    I'd be interested to know the subsidy per Auckland train trip. Do you know what it is? And what would it become if the trains are electrified?




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