In the lead up to next month’s state election Chris Minns and NSW Labor have been dropping transport policy ideas like they’re going out of fashion.
Much of it seems to be ill-thought-out populist dogma that is, at best, harmless: mobile phone chargers at busy train stations, or manufacturing more trains locally. The first is a cute irrelevance, while the second could be a boon for Newcastle but is really an employment and business policy, rather than a transport one.
Last week’s high-profile policy unveiling is anything but harmless.
If elected, NSW Labor has promised to introduce a $60 weekly cap per vehicle on toll roads in Sydney thus ending ‘Toll Mania’. Their argument is simple and easy to pitch in the short-attention-span world of social media: public transport fares are capped, so tolls should be too.
The logic is flawed and if this policy is introduced it will be bad news for the state. Let’s have a look at why.
- Public transport is a social good, cars are not. We, collectively, want people to take public transport. Cars, usually carrying just one person, produce a negative externality to the city. They cause congestion, they pollute, they need to be parked somewhere all day and night and, once in awhile, they crash into a pedestrian or cyclist and kill them. We subsidise public transport because we can all get around faster, more healthily and safer when people use it. Just because we cap Opal fares does not mean we should cap tolls.
- Induced demand. Cheaper tolls will encourage people to drive more. If you’re planning a trip for Saturday and you’ve reached your Opal cap, you know that you can take the train for free. Hooray! If Chris Minns’ policy becomes reality this logic will apply to toll roads. You could do laps on the M5/M7/M2/Eastern Distributor all weekend if you fancy. For free. Free for you, anyway.
- There is no such thing as a free lunch when it comes to tolls. The NSW government collects all public transport fares in the state and uses them to (partially) pay for all public transport service. This applies even if the bus or train is run by a private operator. Tolls do not work like this. One company, Transurban, owns almost all the toll roads in NSW. Contracts have been signed stipulating toll prices. If the NSW government changes the pricing structure, they will have to pay the shortfall to Transurban. If a driver hits the $60 weekly cap the rest of their ‘free trips’ will be paid for directly by the taxpayers of NSW.
- NSW stands for New South Wales, not Newcastle-Sydney-Wollongong. Minns’ is keen to point out that that the brunt of road tolls are worn by residents of Western Sydney. This is undoubtedly true. After all, our toll roads are in Sydney and the people that use them generally come from areas that lack high quality public transport or walkable mixed-use neighbourhoods. If this policy is enacted, residents from regional NSW, public transport users and anyone that does not regularly take toll roads will be directly subsidizing the road use of those that do. It’s a transfer from rural to urban, from public transport to motorists, from have-nots to haves.
- This policy is regressive. It is targeted firmly at the middle. Labor have stated just 51,000 car owners will benefit from the policy. The rich don’t care about tolls, although they will benefit too. The poor are less likely to own a car and less likely to take toll roads often. This policy doesn’t reduce tolls in a way that benefits occasional users such as people from the country, public transport users and those that work locally. It will only benefit regular toll users that are clocking in more than $60 a week.
A lot of people, I’m thinking about taxi and rideshare drivers, tradies and long-distance commuters, spend a lot more than $60 a week on tolls. These users will have their toll bill reduced dramatically and will take more trips on toll roads than they otherwise would. Why not? They’re free! All this extra money will go straight to Transurban shareholders, courtesy of the NSW taxpayer. This policy isn’t just populist, it is corporate welfare on a staggering scale.
The people of NSW deserve a government that can think critically about the rapidly changing world we live in and introduce infrastructure and policy to help us all survive and thrive. This policy demonstrates that NSW Labor are thinking only about residents of Sydney, do not take climate change or urban congestion seriously and are playing fast and loose with our collective wealth.
A toll cap will push more people onto motorways and off public transport. It will be expensive, diverting transport funding away from public transport projects and towards corporate profit. It is a regressive policy that demonstrates a profound ignorance of the complexity of our state’s transport system.
If you’re thinking of taking a punt on Labor to win the election next month you should put your money where your mouth is and buy a few Transurban shares, too.
Both Sides of the Political Divide
If you’ve spent any time in Sydney in the last 30 odd years it goes without saying that building new toll roads, alongside approving new fossil fuel projects ($), is about as close as we get to bipartisan policy in NSW. The M4, M2, M5, Eastern Distributor, Cross City Tunnel, Lane Cove Tunnel and the M7 all opened well before Westconnex got underway and it’s a he said/she said as to which major party is more responsible for the excess of toll roads in Sydney.
‘Toll relief’ projects go back almost as far and enjoy similar bipartisan support. The catch being that, with the exception of the Sydney Harbour Bridge and Tunnel tolls, any ‘toll relief’ scheme is a direct cash transfer to our privately owned tollway operators and the name ‘Transurban’ just keeps cropping up.
Bob Carr kicked off this habit all the way back in 1995 when he was elected on the promise of offering cashback for drivers on the M5 motorway; now part owned by the State Government and part owned by Transurban.
As toll roads spread like tentacles across Sydney a more holistic approach to toll relief was deemed necessary, one that didn’t quite so obviously porkbarrel a few swing seats in Southwestern Sydney.
In 2017 Gladys Berejiklian announced free car rego if you rack up a big enough annual toll bill. In 2019 the scheme was expanded to give discounted registration to moderate toll road users. Just last year the Perrottet government expanded the scheme even further and adopted the cashback model whereby drivers receive a portion of the tolls they pay back directly, in this case after exceeded a given threshold.
Not to be outdone by the Liberals, Minns’ is keen to make sure that the Labor party are offering the biggest boon to Transurban and incentivising car usage the most.
What’s most problematic about the latest iteration as put forward by NSW Labor is that it offers totally free toll road use beyond a threshold. Perrottet’s version only offers a partial discount on toll fees and spreads this benefit to a wider number of people, not just our state’s heaviest toll road users. The Labor version is more costly, less inclusive and less progressive.
Just one more toll road bro
What’s obvious through all of this is that the dream of ‘Build-Operate-Transfer’ was always too good to be true. We were promised massively discounted motorway construction where the brunt of the cost would be borne by the user and seamlessly managed by the private sector.
What we’ve ended up with is a classic late-stage-capitalism grift: the Government splits the construction bill with the private sector who sign lengthy operational contracts with over inflated toll rates and guaranteed quarterly increases, voters complain and so the taxpayer steps back in to foot the bill, only now instead of just paying for the construction of the thing we have to meet the terms of a contract designed to provide ongoing return to Transurban’s shareholders. One of whom, incidentally, is the now former Finance Minister. Although if you have a managed super fund, which is basically every person that has ever had a job, then you’re probably one too.
At this point the road out from the downward spiral is long and politically treacherous. It’s a safe bet that the two major parties will continue their one-upmanship when it comes to new toll roads and subsequent ‘toll relief’.
Come to think of it, whichever way you’re punting this election the safest bet is on Transurban.
