Equity and the Automobile
Russell Degnan

Now the Federal election is over and Bracks isn't afraid of making a political scene (not that it helped), the Scoresby tollway is the big news. In a blatant piece of short-sighted political opportunism, the Liberal opposition has responded by saying they will remove the tolls if elected.

Road pricing is something that a political party ostensibly dedicated to free-market ideals should not be disagreeing with. Normally, the main argument put against them is one of equity. That is: poor people need to drive and charging them to do so will mean they cannot. A similar argument for equity is put up to defend the building of large parking garages in the CBD and inner suburbs: to allow people in outer suburbs access to services. However neither provides good outcomes in planning terms and neither is exempt from the inherent problems associated with socialist economic models.

As with any good, the subsidisation of roads causes an increase in usage beyond what people would be willing to use if they were paying the full costs. Often referred to as "induced demand". It is probably more accurate to describe the increase in use, not as an increase in travel demand, but as an increase in the distance people are willing to travel. Time is by far the most important element in travel, commutes tend to be between 30 minutes and an hour for everybody. Building a freeway merely increases the distance people can travel in that hour. The result though, is more cars, on the freeway, on local roads, and in the urban centres that should be for people.

The argument that roads are vital for our economic growth, or for people to live is irrelevant. If it is so important people will pay for it; if they aren't willing to pay for it how can you justify it? Parking garages - being a private good - are a slightly different matter. Their subsidy comes in the form of local roads and freeways that connect drivers to them. Take them away and the demand for parking would plummet, and the price of parking likewise. In other words, the people who really do need to drive and park are being charged more because of road subsidies.

But subsidised roads don't just aggravate the traffic problem (and hurt the public purse), they also cause greater inequality. In the under-serviced outer suburbs. The problems caused by car-centric traffic is not confined to the communities receiving cars although their's is more visible and dramatic. By pushing demand for services to the centre the local communities are further disadvantaged. Banks in small towns and the outer suburbs aren't closing for nothing. They lack customers because people shop at large malls in regional centres. Inequity is magnified because the under-serviced (poor) areas remain under-serviced. The poor are being partially paid to drive, at cost to themselves and the wider community.

There is also an implicit assumption that everyone must drive, and that everyone in the outer suburbs don't drive. It is not and never has been true. In fact, with an ageing population it may get less true, not more. Road subsidies are nothing more than a large wealth shift to car-owners. People forced to use public transport actually have to suffer a double blow, because the quality and quantity of services having to compete against the subsidised automobile declines.

Talk of integrated transport planning is nothing but hot air. People make choices based on time, cost and convenience, and they choose what is best. All the different methods of getting around compete with each other on that basis. Trying to achieve equity when none can exist is doing more damage than good. For once, I applaud the Bracks government for introducing tolls. I hope they put them on all our roads.

Sterner Matters 17th October, 2004 15:14:08   [#] 


As if the Liberals would really do this...
If they get into office, they're going to examine the books, discover things were "far worse than they anticipated", and it would be "financially irresponsible" to buy out the toll operator.

I'm sure Peter Costello's office could help drafting the press release...
Rob  18th October, 2004 11:56:29  

I don't expect they will
If I recall, Labor made similar noises about CityLink. It is a cheap political shot that plays on people's general dislike of user-pays. Once it is built noone will really mind the tolls. Implementing a wider toll regime could be more problematic though.
Russ  18th October, 2004 20:01:52