Hear about the free-market policy that the Institute of Public Affairs didn’t like? Congestion pricing. It’s a terrible idea, an IPA “research fellow” argues today for News Corp, portraying it as “elite class … agenda of centralisation and densification”.
A congestion price, this week urged by the Grattan Institute and immediately rejected by the NSW and Victorian governments, “hits the least wealthy hardest”, according to the IPA. As a result, “the suburban working-class would be forced either to pay extra to get to work or to cram themselves into unreliable, already full trains.”
Well, the unreliable bit is certainly true in Sydney, where each day commuters wait to learn which minor problem will bring the entire network to a halt — something for which no one, anywhere, ever seems to be held accountable.
And it’s true that, like any price, higher-income earners have greater capacity to pay under a congestion pricing scheme. Charging for access to road infrastructure will indeed deter people who, because they can’t afford it or because they don’t want to pay it, will avoid driving into areas covered by the scheme, switching to other modes, delaying their travel or going elsewhere. Others with greater need or higher incomes will pay the charge and access roads with fewer vehicles on them, reducing commuting times and pollution and the economic losses currently associated with being stuck in traffic.
As the IPA fellow admits, people already pay a lot of money to register their vehicle, insure it and run it on fuel that comes with a de facto congestion charge — fuel excise. So we already have a regressive tax system in place for motor vehicles. The money raised by a congestion pricing scheme could be used to reduce rego costs for low income earners. Or fund a public transport system that doesn’t grind to a halt because someone sneezes.
But rego and excise aren’t the only tax that motorists pay. The dirty secret of opponents of congestion pricing schemes like the Victorian and NSW governments is that every urban motorist already pays a congestion tax, in the form of their time. Every second you spend stuck in your car, queued up along with thousands of other motorists, is a second you could have spent doing something better — like being at work, or being with your family or friends, doing what you’d prefer to be doing. Instead, you spend it crawling along and cursing the idiot in front of you.
This is what the Soviets did. They didn’t have effective price signals for consumer items like basic groceries, so they didn’t produce enough of them. Soviet people had to queue for everything, devoting large slabs of their lives to waiting in line for low-priced consumer staples. And that’s how we regulate access to most of our road space at the moment, by queueing, because we don’t have price signals — or the signals we do have, rego and excise, don’t work. Instead of allowing a free market price signal to determine access to the product, the IPA — and governments — prefer the Soviet solution, queueing. And they get away with it because motorists don’t see it as a tax, and don’t understand that a congestion charge would replace it with be a far more efficient and productive form of tax than making everyone queue.
No one pretends that the IPA actually has any economic credibility anymore, given it is funded by and advocates for a clutch of special interests, but it is amusing to see the author criticise congestion pricing as a “rationalist scheme”. Once upon a time, the IPA was proud to defend “rationalist schemes”. And it worshipped arch-rationalists — rationalists like Milton Friedman. Search the IPA site and you’ll see thousands of words devoted to the genius of Milton Friedman. On the economist’s death in 2006, Tim “Freedom Boy” Wilson wrote a glowing obituary for the man he called “one of the foremost advocates of freedom”.
Alas, it turns out, Friedman was a member of that “elite class” that advocated for congestion pricing. In fact he was pretty much the first to suggest the idea. Back in the days before e-tags, he proposed a Geiger counter on every car and roads painted with radioactive lines to provide the basis for the charging mechanism. Sigh. Out-of-touch elites, huh?
If the IPA opposes taxes which hit the least wealthy hardest, I must have missed their opposition to the GST.
Hmm, where was the IPA when the Abbott government restored the indexation of the Fuel Excise?
Oh, & they must despise toll roads…..oh wait, that benefits the private sector……
Another example of governments, fearing the use of the toxic term tax, abrogating their responsibility to lead and to implement policies- even if they are unpopular- to help make our lives function better. Instead, they will rely on drivers self excluding because of wasted time. Drivers will either change their work hours, work place or opt for a public transport option when available. Some, if able, may even simply drop out of the workforce. Leadership means doing the tough calls as well as the feel good stuff, just staying in office is not leadership.
Bernard, the worry about congestion taxes on roads, and to a lesser extent, the existing congestion costs (through registration, fuel excise supposedly hypothecated for road works, and users’ time using the road) is that it treates roads as only an economic resource. But roads are public places and thoroughfares. Are we to allocate their use according to capacity to pay? Already we have motorists claiming a greater right to use roads over other users such as pedestrians and cyclists because the car & truck users ‘pay the tax’ (& cause the damage).
And recently with the Extinction Rebellion and other public demonstrations using public roads we have had the claim from premiers and the media questioning these road users right to be in & use these public spaces. Will paying a congestion charge give people a new property right to car users, or to a corporation that buys the right to impose & collect congestion charges when a government decides it needs an election chest of funds and privatises it?
I think it may well be that paying for congestion through time ‘wasted’ sitting in traffic is a more efficient, fair and democratic way off allocating use.
Yes Mark Dunstone, this seems to be a resounding refrain from motorists, especially when cyclists are either badly injured or even worse killed..
There seems to be the idea that because they pay their rego & the various other taxes, that the roads are just for their exclusive access as well as the infrastructure that is connected into them..
There needs to be a realisation by car & truck users that, everyone’s taxes are a part of the system that’s used to build, maintain & expand on the nationwide road network, so everyone has a right to use it in whatever fashion they choose, as long as it is done in a manner that is safe & adhere to the rules of the road..
I would suspect that the misinformation motorist groups have been operating under for quite sometime, is due largely to ever increasing amounts of cars that are using the roads, with the belief that many newer ill informed, drivers (may) assume they’re the only one’s paying..
Just a last thought, with the continued investment by private investment company’s, no one can be truly sure whose paying for what…
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Just a last thought, with the continued investment by private investment company’s, no one can be truly sure whose paying for what.
One thing for certain those collecting the tolls will not be interested in any reduction in traffic using their roads. Yet another barrier to change.