The Federal opposition spokesperson for Infrastructure, Transport and Regional Development, Anthony Albanese, wrote last week that traffic congestion is a handbrake on economic growth. He says it costs the national economy dearly:
Imagine if each and every year, the Australian government discovered a hollow log containing $16.5 billion. We could use that windfall to boost services or reduce government debt. Or we could return the money to the pockets of families and small businesses via tax cuts. Actual hollow logs are rare in Canberra.
A whopping $16.5 billion that could be put in the pockets of families and small businesses every year? No Mr Albanese, that’s a whopper. There is no “actual hollow log” filled with glittering cash.
That $16.5 billion estimate is an economic cost estimated by the Bureau of Transport, Infrastructure and Regional Economics (BITRE); it’s not actual cash that could be brought into the budget and given away as a tax cut. The great bulk of it is the value of extra travelling time incurred by personal and business travellers as a result of traffic congestion.
And even if it were real cash, we don’t need politicians proposing even more Howard-style “tax cuts”, especially to the tune of $16.5 billion per year that, Mr Albanese tells us, will rise to $53 billion p.a. within 15 years.
But that’s not the only thing he gets wrong. He goes on to say that the losses from congestion should be reduced:
That would involve investing in better urban rail as well as roads, making it cheaper and easier for people and goods to move around our cities.
No again, Mr Albanese. Building more rail and more roads won’t reduce traffic congestion. It will allow more trips to be made in the peak period, but it won’t reduce traffic bottlenecks because induced demand will cancel the initial increase in speed and bring back the congestion. That’s true for both new road and new rail investments; it’s Infrastructure and Transport 101 (see Are motorways the only answer to traffic congestion?).
The only way to manage traffic congestion effectively is to ration access to road space. There are various ways of doing this, but the most obvious and most efficient would be to charge road users at congested times; for example, either directly by a charge per kilometre, or indirectly by a charge on parking.
Naturally Mr Albanese accuses the Turnbull government of failing to take action to address congestion. If he’s serious, what he should be doing is advocating road pricing and challenging the Government and the Greens to do likewise (see Is it time to get serious about road pricing? and Is congestion charging just too unfair to bother with?).
Sure, that would be politically risky, but the state of our cities demands a more honest response from politicians. At the very least, they should justify investments in transport infrastructure capacity on the grounds they enable more trips to be made in the peak at current speeds; they shouldn’t pretend it will provide long-term relief from traffic congestion.
It’s a fond hope of course, because so much of contemporary politics is an appeal to fixed values. It would be so much better if politicians helped us understand the full implications of our travel choices and explained that some problems can’t be solved without pain.