Every three years, Statistics New Zealand carries out the Household Economic Survey (HES).This is a major survey of households across the country – collecting information on their incomes, how much they spend on various goods and services, and various other attributes. In this post, I want to highlight some of the results from the latest HES, which was carried out between July 2012 and June 2013. Matt did a post last year looking at this, but I’d like to dig a bit deeper into the HES data, and look at some of the other spending which is transport-related, but not included in the Transport spending group (read on and this will make sense!)
The HES splits household spending into twelve groups, including things like Food, Clothing & Footwear, and of course Transport. The Transport group is a big part of household spending – the average household spends $158 a week on transport, 14.2% of their total spending. Over the course of a year, that’s $8,231 – far from being small change. For all the households in New Zealand combined, the figure is $13.8 billion.
There’s a lot that goes into the Transport group. The costs of car ownership (excluding petrol and diesel) include car purchases, car parts and accessories, servicing and repairs, and various other costs like licensing, WOFs and parking. In total, households spend $6.6 billion on these items, in “gross” terms. In “net” terms, the figure is a bit less: you need to subtract the money which a household gets when selling a car to dealers or other households. You can take off $650 million for this, for a net figure of just under $6 billion.
As Matt pointed out in his earlier HES post, and as we’ve written many times previously, a big part of the value from shifting to public (or active) transport is that it lets households get by with fewer cars. Sure, some households will be able to go car-free altogether – but others will be able to go from two cars to one, or three to two. This all saves money, and could take a fair bit of steam out of that $6.6 billion-minus-the-sales-and-tradeins.
Then there’s petrol and diesel: those are big ones too, coming out at $4.6 billion combined. Public transport isn’t split out as such, but falls under road, rail and sea passenger transport. Combined, these items add up to $470 million, and would also include taxi fares and so on. Domestic air transport is $230 million, and international air transport is $1.3 billion… all those overseas holidays add up, although it’s probably a bit unfair to lump this stuff in with the domestic costs.
Overall, household spending on transport looks like this, with the dollar figures in billions:
Aggregate Net Household Spending on Transport (in $billions)
Statistics New Zealand note:
In 2012/13, average weekly household expenditure on transport was $158, up 20.8 percent from 2009/10. This was largely driven by an increase in spending on petrol over the three years – from $41 a week in June 2010 to $49 in June 2013 (up 20.1 percent).
Transport showed the largest increase of all expenditure groups over the three years. [Transport in the] CPI showed a similar increase, with petrol prices up 23 percent for the three years.
Anyway, this data is interesting, but it’s not a complete picture of transport costs in New Zealand, and nor is it supposed to be. It doesn’t show transport costs for businesses or the government, or the “net” cost to the country as a whole. It doesn’t include the hidden costs of our current transport system, such as inefficiently high numbers of carparks being provided due to parking minimums.
Insurance isn’t counted as being part of the Transport spending group either, but NZ households also spend around $780 million a year on vehicle insurance, according to the HES. Households also spend $2.3 billion on rates. For Auckland Council, and most councils, transport is the biggest spending item.
Part of the reason I write for this blog is that I think New Zealand can have a transport system which costs less and delivers more than the current one, and the country will be better off for it – financially, and in terms of our travel times, and our greenhouse gas emissions (and even our health). The best place to get started is with greater use of public and active transport.