Fuel tax, Road User Charges increase

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The New Zealand Herald reports that both fuel tax and road user charges will increase tomorrow, as the Government increases petrol excise by 3.75c per litre. Road User Charges (RUCs) will increase an average of 7% tomorrow as well. An interesting quote:

drivers of small diesel cars and other vehicles weighing up to ten tonnes will pay 10 per cent more.

Heavy truck operators will pay 3 per cent to 6 per cent more, but there will be no increase for truck trailers.

Road Transport Forum chief executive Tony Friedlander denied that meant the trucking industry would be subsidised by other road users.

Waterview Motorway: Economic Nonsense

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With most business opportunities, it is possible to calculate the expected monetary benefits and costs, while considering other factors such as the opportunity cost of capital and project risk.A similar approach for transport infrastructure projects is also attractive. Just work out the benefits in today’s money, divide this by the cost and – presto! – you know exactly how much the economy will benefit from for every dollar spent.

Take the proposed Waterview motorway extension, for example. Treasury and Ministry of Transport officials have worked out that for every dollar spent on the $2.8bn motorway connection between Mt Roskill and Waterview, the economy will receive $1.15 worth of benefits.

In the business case document now being considered by Cabinet, officials point out that “full tunnel” option means that the benefits are only a little in excess of their costs. Some above ground options might save up to $200m from the construction cost, but these have higher social and environmental costs, and also involve the loss of park land and a significant number of houses.

Considering the billions of dollars at stake, one would hope that the economic benefits and costs of the various options are as accurate and as realistic as possible. So are they? Well, no, actually.

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The REAL cost of automobile dependency

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Now if I’m being honest here, I will admit that public transport advocates do get hammered a bit on the whole “economics of transport” debate. The roads lobby constantly states how through petrol taxes trucks and cars pay their way, yet at the same time rail and buses simply can’t fund themselves and require massive subsidies. Now I’ve always thought this strange – that something which just seems so much more efficient (putting a whole lot of people inside a metal box and moving them) could actually be not as economically justifiable as something which just was so obviously less efficient (putting one person in a metal box and then shifting heaps of those metal boxes).

Thanks to a most excellent book that I own, called “Asphalt Nation: how the automobile took over America and how we can take it back“, by Jane Holtz Kay, we can see the argument for cars over public transport start to unravel. Not only in terms of the environmental and social impact of cars – but in their economic inefficiency, striking at the very heart of those who promote roads-centric policies. It’s a book that Steven Joyce, Minister of Transport, should definitely read. It is written from an American perspective, but pretty much everything can be applied to New Zealand as we’re definitely one of the most auto-oriented countries in the world, particularly in the case of Auckland. An interesting quote on page 128 looks at the overall cost to individuals of transportation:

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Auckland, City of Cars

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A series of videos on Auckland’s auto-dependency:


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