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Rabid Furry Skier
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I was having a debate with someone about how he thought it is stupid to focus on public transport and that it was spend more effort on roads with the reasoning that road covers the cost of its use in whole and therefore is more efficient that public transport as a transport network.

He pointed out that even if we saved money on the cost of the roads by reducing the number of cars, cost of maintaining the roads and the requirement to build more or expand highways, the government loses access to its revenue which is used to fund other needs (welfare, military, etc for the federal, or hospitals, schools, etc for the state government) as the income from the vehicles tax (supposedly) pays for itself with no subsidisation required from other taxes.

Ignoring the fuel crisis (say, they find a replacement for it what ever that is) or any global events, my question is, is any of this is true and what are the financial issues that comes with the road network of Australia if it does indeed cover the whole funding requirement?


Also, if the above is true, what benefits does public transport offer in comparison that makes it a more appealing project than building more roads and freeways?


I have my own views, but I will be more interested in hearing what your views on this kind of topic is and the reasoning behind it. I am sure some of you have statistics to back up your argument which would be a great resource to this topic.


PS: I hope I make sense considering it is 2am and all... sorry if there is already a topic like this as it isn't revealing itself in the search function.
 

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...........
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Ask him if he would be prepared to maintain the road at the front of his property half way across the road plus any extra for using arterial roads or roads that fronts crown land instead of paying rego and fuel tax.

I think he may be surprised to find the cost of laying a road ;)

Road maintanance and construction for the State may be close to the cost, however that is entirely ignoring the local Government roads.
 

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Cost us $100k to lay 1.6km x 5m bitumen for our landing strip on our property.

Not sure about my local council costs but they've only street swept my street twice in 6 years and the developer actually paid for and built the road and lighting infrastructure. So the bit of road outside my house has cost the council maybe less than $50 + what ever rate 3 street lighting costs per annum which I think comes out of rates anyways.
 

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You have to consider both implicit and explicit costs.

-Explicit

Do road-related tax revenues > expenditure on road maintenance?
Your friend seems to think the answer is yes, however it is often said that roads receive substantial subsidy from normal taxpayers... I'm not sure which is true.

This isn't really a great line of argument however, as people will always have to move around and public transport also requires subsidy.

-Implicit

There is a point where the road system reaches maximum capacity and is incapable of expansion (e.g. Old South Head Rd through Bellevue Hill). Everyone using that road has to waste 20mins - that means less deliveries/jobs per hour = higher G+S costs and less tax revenue for the Gov. It is estimated that congestion costs our economy $8bn/year from lost productivity.

The goal of PT is to get all the less productive people off the road (e.g. business people who wouldn't use the time saved from a faster trip to do extra work; parents driving kids around; P-platers driving to school).

This is why I reckon its so dumb to focus on providing 1 bus/hr to random suburbs on the outskirts of Sydney where the true economic benefits will come from increasing eastern suburbs bus services from every 15mins to every 5mins and speeding trip times through boosting bus priority in heavily populated areas.

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IMO, there's nothing wrong with encouraging driving in a place like Canberra because there is little congestion to impede productivity (assuming you can develop tech to discount the environmental impacts). In country towns etc there may be no economies of scale from providing PT either - as the burden of private transport capital expenditure falls on households.
 

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derp
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I was having a debate with someone about how he thought it is stupid to focus on public transport and that it was spend more effort on roads with the reasoning that road covers the cost of its use in whole
wow...ur friend is an idiot and this particular part invalidates any future nonsense coming out of his mouth
 

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Rabid Furry Skier
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Discussion Starter · #7 ·
wow...ur friend is an idiot and this particular part invalidates any future nonsense coming out of his mouth
That is why he isn't my friend. Was just a random who made me want to think a bit deeper in this topic. ;)

All very interesting points about how much it costs to maintain the road and where the total value is (such as the economic impact and all).

The point raised about the congestion is a very valid point. $8 billion is quite a large sum. I found an old white paper from 2000 and from my calculation of 20 cents per km (I am not too sure how much tax the government makes out per km, but the 20c per km number seem to be my recollection), Victoria earns around 9 billion dollars in terms of income each year, $2 billion of that goes to the federal government in terms of fuel exercise. So already, it is starting to lose its value and the return it makes to the economy (at least in the heavily congested areas).

http://www.mav.asn.au/CA256C320013CB4B/Lookup/whitepaper_June2000/$file/whitepaperreformatted.pdf

I am interested in how much it costs to maintain the existing road network and when it comes to the cost of needing to expand (more lanes for example, $1 billion for the Ring Road as an extreme end of the scale for example).
 

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Don't forget that a lot of what is spent on private transport (taxes on vehicle purchase, fuel, registration, blah, blah) doesn't go into roads but into consolidated revenue.
 

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^^ that is what he is trying to get to the bottom of.

externalities are what kills it for the road I imagine. eg. pollution, congestion, safety etc. that is a big negative for the road system but generally could be seen as a positive for public transport.

Here is the vicroads annual report

http://www.vicroads.vic.gov.au/NR/r...icRoadsAR_0910_Part5_Financial_management.pdf

VicRoads’ funding is derived from the Victorian Government annual budget, program funding from the Transport Accident Commission, revenue from regulatory fees and fee-for-service charges. Funding for operating outputs and capital works from all sources totalled $2.1 billion during 2009−10,

in 2010 VicRoads was funded from the following sources:
$500 million from the federal government
$1.2 billion from the state government
$300 million from 'internal sources'

it collected:
$1.6 billion in TAC fees (about $400 per registered vehicle)
$850 million in rego fees (about $200 per registered vehicle)
$600 million in stamp duty (I assume on car sales)
$35 million in driver licenses
$35 million in federal licenses (trucks and stuff I suppose)
$60 million 'other'

it spent:
$366 million on asset management (maintenance)
$250 million on network planning and improvements
$175 million on road safety
$145 million on Registration and Licensing expenses
$80 million on 'other services' (I assume overheads)
$400 million on asset depreciation
 

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Rabid Furry Skier
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Discussion Starter · #10 ·
It is quite interesting to see the costs as figures. I was always under the impression that roads were a loss making infrastructure that was built with government subsidy to provide economical support for the areas that benefits from the roads. Guess I was wrong and that it really does make a profit for the government coffers and also seen as an economical advantage (at this point at least).

But as mentioned before, the congestion is the issue that is going to reduce the whole value of the roads to the state's economy and my assumption is that even if VicRoads recovers all the costs independently of the government, the businesses will lose out and suffer as a result potentially reducing the business tax income.

Then there is the safety and pollution issue that comes with roads which no doubt could start costing the state a fortune in health needs rising as a result.

Slightly off topic, I often say that while health care is very important, having activity centres that gets people to be more active and hopefully have a happier lifestyle is a good way to reduce the everyday ailments such as obesity, stress, and so on, or at least that is my impression when it comes to a healthy lifestyle. Therefore having more efficient transport options (and less emphasis on roads) will no doubt become valuable as a tool to improve the well being of people.
 

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Firstly, road based revenue exceeds road expenditure but that doesn't mean they are more cost effective than PT.

If PT was closed the money saved plus the additional revenue generated from increased traffic (even if all road revenue were spent on roads) would not be sufficient to build enough extra roads to cater for the increased traffic in the major cities.

Therefore, investment in PT not only reduces total expenditure on transport it also reduces the costs faced by remaining road users (as road charges and fuel taxes would need to rise to cover the additional road requirement)

I think the most intresting stat is the one Peter Newman used to use, can't remember the exact figures but it essentially said that car based cities spend nearly twice as much per capita on transport when compared to similar wealth PT based cities.
 
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