Another tax increase proposal

Another day, another tax increase proposal.

As reported in the Australian Financial Review today, a PWC report commissioned by the Tourism and Transport Forum says:

Australian cities recover a fraction of the cost of public transport tickets compared with their international counterparts and governments need to increase fares to make the system sustainable.

According to its website, the Tourism and Transport Forum:

is the peak industry group for the Tourism, Transport and Aviation sectors.

It is thus not obvious why they are meddling in this area.  But notwithstanding, why is it assumed that because the ratio of fare revenue to costs is too low that the only available solution is to increase fares?  Why are they not advocating for a reduction in the cost of delivering public transport?  You know, how it works in a normal business?

Included in its ‘analysis’, the Tourism and Transport Forum offers the usual survey nonsense question about paying more for getting more:

A survey by TTF found 39 per cent of people were willing to pay more if it meant better transport services.

The rigor is such surveys is usually, how do they say in French, le crap, with the survey sample often including people who don’t actually use the service in question being asked about someone else paying more.

But why do we need to pay more to get better anyway?  We don’t pay more for better televisions, mobile phones, computers, cars, clothes, toys, and lots of other things.  The difference being that the government does not provide those goods and services.

As Kerry Francis Bullmore Packer said before the 1991 Senate Print Media Inquiry

… as a government I can tell you you’re not spending it (taxes) that well that we should be donating extra.

Let’s have some research also in the the relative costs of public transport per kilometer of distance and then talk about cost recovery.  Until then, government should fix the efficiency and productivity of their public transport systems before increasing transport fares.

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46 Responses to Another tax increase proposal

  1. cuckoo

    One mystery I have often observed in Melbourne metro stations is that druggies and hardluck cases who haven’t the energy to jump the turnstile or crawl under it just go to the nearest pass gate, murmur some Masonic formula to the station attendant and are waved through without paying. I wonder what the magic words are?

  2. struth

    Tourism and transport Forum should hand back the taxpayers money they have parasitically taken to give themselves(a bunch of nobodies) big job titles (everyone is a manager of, or director of) and big salaries to come up with nothing but inane bile.
    Another advocacy group the country can ill afford.
    SHUT.IT.DOWN.

  3. Bruce of Newcastle

    Two major costs for transport operators are energy and employees.

    The Labor Party is committed towards increasing energy costs through things like carbon taxes, renewable energy mandates and crazy electricity decisions. They also oppose reductions in manning, for example removal of guards on trains, and oppose driverless trains.

    Yet they always pushing for more public transport? Madness.

  4. teddy bear

    Politicians always take the path of least resistance, unfortunately they are too stupid and insulated from the real world to realise that taking on unions and their cronies is that path.

  5. miltonf

    Interesting article Spartacus. Bruce’s points re manning and energy costs are valid too but I’ve heard it said that if concession travel was abolished we may come close to full cost recovery in Melbourne.

    I’ve noticed also that, in spite of the Myki nonsense, public transport is very cheap in Melbourne even when paying full fare.

    In constrast, Brisbane and SE Qld seems much more expensive.

  6. miltonf

    PS Melbourne sparks don’t have guards- I think Jeff abolished them.

  7. Hydra

    This is the only post you’ve made that I 100% disagree with Spartacus.

    It is an absolute farce how low our transport fares are compared to the costs and we need a user pays system.

    The fact that in Victoria it costs me the same to get from Pakenham to Werribee as it does to go from Richmond to Southern Cross is disgusting.

  8. Leo G

    Heavy rail passenger transport revenues in Australian cities are typically only about 15% of recurring revenue costs.
    Successive state governments have never genuinely tackled efficiency and productivity problems- except to worsen the problems. They generally initiate transport system expansions as a cost of land development where the long run cost of inefficient operation is not considered.

  9. miltonf

    It’s a bit of a gift if u r a long distance commuter eh Hydra

  10. PhillipW

    Interesting point about concession fares. I am nearly 70 and I know I will never qualify for the pension. About the only age-related benefit I get is the Gold Opal card in NSW which enables me to travel up from Bowral and all round Sydney for $2.50 per day (there is a similar deal in Victoria). I would not object to this being doubled – it would still be a great deal.

  11. incoherent rambler

    I wonder what the magic words are?

    I have used: “My card did not work” several times.

  12. sabena

    Why is a tourism body proposing higher fares which will deter tourists?
    As Bruce says one of the big costs of public transport is wages-particularly overtime and penalty paid time.The technology exists for driverless trains, which would on the basis of eliminating penalty paid time. make a big difference to cost.
    Finally the paying more getting better service mantra-for practical purposes the service delivered now is the service you will always get unless the capacity of the system is expanded-and that takes serious infrastructure dollars.

  13. Hydra

    It’s a bit of a gift if u r a long distance commuter eh Hydra

    Yep. I live in Werribee so it’s fine for me. But I used to live in Southbank and it just didn’t make any sense.

    I’m not saying we should not also tackle productivity issues – 100% they should be #1 priority – but do we really think that paying $4.20/day on a monthly pass for unlimited Metro travel is sustainable? Even if every Metro employee worked for free it still wouldn’t cover the costs.

    The fact of the matter is that costs are high because our transport is terrible, and it needs more funding, and it should come from those that use it – like me.

    Also it would be nice if people didn’t jump in front of trains or walk on the tracks every second day.

  14. H B Bear

    When it comes to the “I would pay more for …” crowd look to voluntary opt-in schemes for “green” electricity and carbon offset on air fares. Tiny take-up rates that barely cover the costs to establish schemes in the first place.

    It’s easy to virtue signal until you have to put your hand in your own pocket.

  15. Snoopy

    Outside of pure accounting, the big four accounting firms are little more than policy whores. The have no more credibility than the Ponds Institute.

  16. Jonesy

    When the system is run like a socialist utopia then costs will never be recovered. Our taxes pay full whack for the services regardless of useage….the train/bus is still paid for even I it runs empty!…Myki is for recovery of costs not to pay for the service.

  17. Hydra

    The technology exists for driverless trains, which would on the basis of eliminating penalty paid time. make a big difference to cost.

    You would need to spend hundreds of billions.

  18. Mmmmmmm.

    That Potential Greatness™ just gets brighter and brighter, doesn’t it.

    Trickling down to State government level as well.

  19. Leo G

    The technology exists for driverless trains, which would on the basis of eliminating penalty paid time. make a big difference to cost.

    You would need to spend hundreds of billions.

    Rail technology has been converging toward remote command, autonomous control. The cost of thereby progressing that to removing fulltime, independent control by an onboard driver would be modest, but would not in itself make a big difference to operating cost.
    The most important factors in reducing cost involve ensuring patronage above a minimum level for all parts of a route throughout operating times and pricing to minimise wasteful patterns of patronage.

  20. BrettW

    Just look at Qld Rail where a Union closed shop has prevented recruitment of driver from outside the organisation. This is despite having applicants who actually have train driving experience. The result is a shortage of drivers, schedule chaos and very high overtime costs.

  21. pbw

    Uber has demonstrated what the internet, and the powerful computing resources behind it and on your phone or computer, can do for the cost of taxi transport. AFAIK, no major public authority is even experimenting with a change to smaller buses, including privately owned mini-buses, using uber-like technology and recruiting part-time drivers to provide street-to-street transport intermediate between fixed bus and rail routes.

  22. pbw

    …intermediate between fixed…and taxis.

  23. Siltstone

    Yes BrettW, Qld has achieved high-cost driverless trains (sitting idle in the yards)

  24. Cynic of Ayr

    Good one! Shows with absolute clarity the imbecilic thinking of the Tourism and Transport Forum.
    Them, “If you pay more, we’ll give you better services!”
    Us, “Won’t that cost more?”
    Them, “Shut up!”
    “Won’t you then say the same again, because it did cost more?”
    “Shut up!”
    “Won’t you then want an increase in Salary, because you are handling more money?”
    “Shut the f**k up!”

  25. Walter Plinge

    Interesting point about concession fares. I am nearly 70 and I know I will never qualify for the pension. About the only age-related benefit I get is the Gold Opal card in NSW which enables me to travel up from Bowral and all round Sydney for $2.50 per day (there is a similar deal in Victoria).

    Ditto me. The Seniors Card is a good deal. Cheap weekday travel, free weekend travel, and free V-Line travel once a month. And it’s got me travel discounts overseas too (just a couple).

  26. tgs

    The technology exists for driverless trains, which would on the basis of eliminating penalty paid time.

    NSW’s two new metro lines will be driverless.

    Much easier to do with greenfield projects though rather than having to modify brownfield networks.

  27. DaveR

    “….governments need to increase fares to make the system sustainable….”

    Classic PWC. A new definition for sustainable?

  28. Walter Plinge

    Also it would be nice if people didn’t jump in front of trains or walk on the tracks every second day.

    Sad but true. The problem of weekly suicides off Westgate was fixed by the safety barrier but depressed people just moved to trains instead. It’s a big issue for drivers.

    Millions of dollars is being spent fencing off open sections of Melbourne’s railways where people are regularly taking their own lives.

    Suicide by train has become so common Metro plans to build a dedicated train wash, called a ”biopit”, to clean train exteriors after a person is hit. The bio-pit will cost an estimated $5.4 million to build.

  29. I wouldn’t worry about making any plans to “improve” our train tram or any other public transport system just now. Whatever clever idea some overpaid committee of buffoons comes up with will take years to study, and many more years to develop and implement.
    The major obstacles facing any public transport system in cities and countries that are used to heavy private car use are privacy, convenience, cleanliness, cost and safety. No committee will overcome those obstacles to deliver a cost effective system. It’ll just be more millions and billions down the drain.
    I would suggest being patient for another 5 years or so, by which time driverless technology will enable us to flood our streets with driverless taxis of all sorts for private, convenient, clean, cheap and safe transport.

  30. Marcus

    Why is a tourism body proposing higher fares which will deter tourists?

    I’d never heard of the Tourism and Transport Forum until Trent Zimmerman got preselected (that was where he was warehoused when he finally quit working as a political staffer in his forties), but you’re right, it is an odd pair of issues for a single advocacy group to take on. Why not the Tourism and Education Forum? Or Tourism and Health, or Tourism and Law Enforcement?

    It seems like it only exists because maybe there wouldn’t be enough for a single Tourism or Transport Forum to do. Mind you, beyond conducting surveys and releasing glossy reports to the media every few months, I’m not sure that the combined TTF really does anything anyway.

  31. Leo G

    “I would suggest being patient for another 5 years or so, by which time driverless technology will enable us to flood our streets with driverless taxis of all sorts for private, convenient, clean, cheap and safe transport.”

    Driverless technology is advancing rapidly but it will need to operate on roadways that conform to certain minimum engineering standards.
    All state road authorities have design standards that are considered “appropriate” for the present. But most main roads do not conform properly even to specified absolute minimum standards. Compliance with even stricter minimum standards will be necessary to allow the widespread use of autonomous vehicles on public roads.
    The cost will be enormous.

  32. DB

    The tourism industry is the greatest rent seeker of them all.
    They want the government to pay for the airports, trains and roads and for most of the attractions.

  33. Paridell

    The technology exists for driverless trains, which would on the basis of eliminating penalty paid time. make a big difference to cost.

    But apparently there is no technology to fix punctuation.

  34. Zyconoclast

    Just look at Qld Rail where a Union closed shop has prevented recruitment of driver from outside the organisation. This is despite having applicants who actually have train driving experience. The result is a shortage of drivers, schedule chaos and very high overtime costs.

    Sounds like the scam the warfies union was running.
    Any ‘ghost’ train drivers?

  35. Phill

    Geez this makes me feel all omnis delenda est.

    Whats going to happen when the US introduces 15% corporate and 20% personal tax rates? Australia will not be able to compete unless it does likewise. Investment capital for Oz will dry up. I want to hear about any plans our government has to innovate around that. Will they just let the economy collapse? Will they reduce our taxes in line with the US?

    I don’t think they have the sense to see it coming, or the guts to deal with it when it does.

  36. PeteD

    The NSW Government seems to have driven some staffing efficiencies in their policy changes.

    Moving everyone to Opal means less ticket selling staff.

    Moving to driverless trains on new lines also reduces costs.

    They also get some cost recovery on genuine service improvements with the increased Stamp Duty generated by economic activity and development in the new area.

    Yes, they should aim for increased cost recovery over time, but the best way to do this is to strip out inefficient costs from the system.

  37. Diogenes

    Put the equivalent of $20 on a rabbit card in Bangkok, despite 5 days reasonably heavy usage, still had enough left on it to buy a cheap meal at the MBK Centre.

    Put the equivalent of $25 on a Singapore ez-link card , spent 4 days doing a lot of travelling on the trains and buses (@ least 2 trips a day on each mode, and still had $8 left when we came home.

    In BKK the BTS is all elevated and must have cost a small fortune to build trains every few minutes.
    In Sg many trains are underground & again must have cost a fortune to build, again a train every 3-4 minutes, they are building some new lines & the intention is to have a station within 150m of any resident (!), buses every 10 minutes. I don’t think we travelled on a bus more than 2 years old

    All lines in Sydney are running at capacity, and short of spending beaucoup dollars on double deck stations and new carriages to suit, or signalling there is no way to increase service frequency at peak times

    Come home Opal card is dinged close $20 to get me home(ok $12 of that is for the privilege of using the airport station). The bulk of the journey is on rail that has been owned by NSW govt since 1855 (Syd-Strathfield) or 1892(when Wyee was opened) in a carriage built in 1981. Still distance wise $8 for 100+ k is not bad – The comparable distance in Qld including the airport line would have cost twice that.

  38. Mother Lode

    governments need to increase fares to make the system sustainable.

    So, if they increase fares to cover more of the cost of operation, are they going to lower the other taxes which are currently making up the difference?

    Yeah, it is a rhetorical question.

  39. Diogenes

    Pete D

    Moving everyone to Opal means less ticket selling staff.

    IIRC, in the 80s there was a study done which basically said the NSW govt would be no worse if they sacked all the ticket sellers & collectors and used turnstiles that accepted 20c coins(!) , therefore a flat fare of 2oc .

    The state government awarded the contract for the Opal card and the underlying electronic ticketing system (ETC) to Cubic Transportation Systems in 2010 – a deal that would cost $1.2 billion over its 15 year life.

    http://www.itnews.com.au/news/nsw-pours-15m-more-into-opal-project-366941

    Or from 2014

    THE cost of commuting on trains has jumped an average 13 per cent since the State Government’s Opal card was rolled out to all 300 stations on the Sydney Train’s network, a spending study shows.

  40. hzhousewife

    One mystery I have often observed in Melbourne metro stations is that druggies and hardluck cases who haven’t the energy to jump the turnstile or crawl under it just go to the nearest pass gate, murmur some Masonic formula to the station attendant and are waved through without paying. I wonder what the magic words are?

    I experienced a similar oddity yesterday in the bank. The teller along a bit was serving a bloke in t-shirt and jeans with a small back-pack and green supermarket bag. He had a very loud and authoritative voice and spoke a million words a minute with good vocabulary. He needed money from his account which was already overdrawn, but apparently that was OK because “Centrelink” and he had to get to Sydney that day. My teller caught the eye of his teller and said “use code xxx, it will be OK”, and rolled her eyes at me. Magic code, I gather.

    The tourism industry is the greatest rent seeker of them all.
    They want the government to pay for the airports, trains and roads and for most of the attractions.

    On RN last week I heard a discussion about a proposal for some new wave pool development, sensationally good for training surfers and surfing will be in the Olympics in future. The interviewer said how fantastic and the interviewee said yes we need one in every capital city. How to be paid for, must be expensive said the interviewer. “Oh, government would have to pay” said Layne Beechley……

  41. Leo G

    But apparently there is no technology to fix punctuation.

    Apple’s iOS v10.2 and the Cat’s Comment window have a mutual disregard which tends to displace punctuation. Technology can be fix or unfix.

  42. King Koala

    So how much taxpayers money did we waste for PWC to tell us what a high school student could have told us?

    I do have some tips for the rail system to make money:

    1.Sydney trains ought to be marketed as a tourist destination. Experience the joys of the third world; the trash, the stench, everyone speaking a foreign language, without leaving Australia

    2. Do as the State government did in Newcastle. Shortern the rail line where it runs through prime real estate, replace the trains with unreliable and overcrowded buses, and sell the old rail corridor to developers.

  43. Easy fix – reduce power costs by ditching the CAGW scam and unshackling mining and voila, public transport costs are reduced.

  44. JohnA

    According to its website, the Tourism and Transport Forum:

    is the peak industry group for the Tourism, Transport and Aviation sectors.

    As I once learned:

    “Cream rises to the top, until it sours”

  45. Sydney Boy

    I’d be surprised if tourists make up even 10% of all train / bus / tram travelers in the big cities. Most would be workers on their daily commute to and from work.

    I agree with Diogenes, the public transport train system is awesome – I have never waited more than 5 minutes for a train, and the trains are DRIVERLESS! I have also found Hong Kong, London, and Tokyo public transport to also be efficient and cheap. Japan’s system is not without its own issues – a bit of capitalism gone mad initially (different lines owned by different private companies) but it is all sorted now – the travel cards work for every company.

    And another, Hong Kong’s Octopus card started in 1997, Tokyo’s Suica started in 2001, Singapore’s EzLink started in 2002, London’s Oyster started in 2004; yet Sydney didn’t get a public transport smart card until 2013!

  46. Leo G

    All lines in Sydney are running at capacity, and short of spending beaucoup dollars on double deck stations and new carriages to suit, or signalling there is no way to increase service frequency at peak times

    The electrification of the Sydney Rail System and the development of the City Railway were detailed in a set of papers published by the Institution of Engineers Australia in 1927. One of the papers, by Chief Engineer of the Construction John Bradfield, specified the train and passenger capacity of each track within the City with the continuous overlap system of signalling, automatic train stops and the introduction of speed control:-

    42 trains per hour per track

    The project failed to meet the specification due to limitations of station-stop design and the fault was never rectified for practical reasons- the corrections would have been costly, the additional capacity was not needed at the time, nor through the Depression years nor through World War 2.
    The corrections are still possible and have the potential to increase service frequency at peak times more than fourfold.

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