The Auckland Council’s business advisory group has decided, based on what wisdom I don’t know, that the best way to raise the supposedly necessary additional funding to build Auckland super-expensive motorways like an Additional Harbour Crossing and the East-West Link, is through tolling people who travel on the motorway network. It sounds a lot like an idea that was proposed by the NZ Council for Infrastructure Development last year. With the briefest of analysis, the tolling idea seems like it might have some merit because of the large amount of money that could be raised – with (NZCID estimate) 915,000 vehicles joining the motorway network each day, even a fairly low toll for each vehicle would raise a lot of money that could be spent on transport projects. Compared to other revenue raising systems, the idea is also relatively simple: just toll gate every motorway onramp.
Here’s how it was described in a NZ Herald article earlier this week:
The council’s business advisory panel believes a toll of about $2 a day would be fairer and more effective than 12 other options raised by Auckland Mayor Len Brown to fill an $11.7 billion transport funding gap.
Councillor Cameron Brewer, who chairs the forum, said yesterday that there could be some variation in the toll according to time of day and location but an average of $2 would raise about $700 million a year.
“That would go a long way to servicing and making inroads into the $11.7 billion funding shortfall,” he told the Herald.
However, the idea has a number of significant flaws – one of which really kills the whole concept. Firstly, the ‘non-fatal’ flaws:
- The system is likely to disproportionately impact upon lower income Aucklanders by pricing them off the motorways (at least at peak times). While the system seems like it’s designed to raise money as its primary purpose, rather than to reduce congestion, clearly adding a charge to driving on the motorway will dissuade some from doing so, who by definition will be priced off the road (the big question is ‘where do they go). Set against that argument is the reality that this is how markets work, and we live in a market economy for most things – why not roadspace? We can, arguably, achieve social equity in other ways such as a progressive tax system and through the social welfare system.
- The next flaw, as pointed out by Brian Rudman’s column yesterday, relates to the efficiency of these tolling systems at raising money. As a way of raising money, tolling is far less efficient than – for example – simply whacking up fuel taxes. You need to build a whole pile of infrastructure to capture people getting onto the motorway, you need to set up a very large and complex computer system to process it all, you need to send out a lot of letters reminding people to pay their bills, you need to take a few people to court to ensure they pay their bills. It’s just complicated and costly, particularly when compared to fuel tax which is just done through sending the petrol companies a bill once in a while. Set against this argument is that perhaps, even despite the massive collection costs, the system could raise enough money to still be worthwhile.
These issues aren’t necessarily fatal to the concept as a whole. If Auckland’s population can be convinced that we need to waste billions more on additional motorways, to the extent that we’re willing to pay $2 each and every time we get on the motorway, perhaps with different pricing schemes to reward those travelling outside the peak for shift-work, maybe we can get past the social equity issue. And perhaps, if the operating costs for this system could be minimised – in comparison to the amount of money raised, then the efficiency argument becomes a bit less critical.
However, there remains a flaw that I don’t think has a solution – and that is a little thing called diverted traffic. If motorways are tolled but not adjacent arterial roads (and the system’s complexity would be increased hugely if we included non-motorway roads), then surely a fairly significant chunk of traffic is going to shift away from the tolled routes and onto the free routes. This has a number of rather perverse results:
- The big, wide and fancy new motorways that we’ve spent billions on will be largely empty, except for rich businessmen to drive along (maybe that’s why they like the idea?)
- The arterial roads which people actually live in, where we run our buses, where we have pedestrians, cyclists, driveways, where we want to improve the balance between movement and place functions, will become horrendously busier and more congested as people use these roads to avoid having to pay the motorway tolls.
- In short, we shift traffic away from where we want it (on the motorways) and into places where we don’t really want much through-traffic (the streets and roads where we live, work and play).
The only way to get around this flaw is to also start charging for travel along local roads. In which case we’re really shifting to a GPS-based congestion pricing scheme which, although probably more sensible in terms of avoiding problems like the above, is likely to be much much more complicated and expensive to implement and may well face significantly greater political opposition.
In short, tolling motorways to raise money (in isolation) may sound like a good idea in theory, but when you look at it in reality, it’s pretty damn stupid.