Public Transport Debates More Substance, Less Gimmicks

By Allsop, Richard | Review - Institute of Public Affairs, July 2006 | Go to article overview

Public Transport Debates More Substance, Less Gimmicks


Allsop, Richard, Review - Institute of Public Affairs


In a market economy, decisions about travel choices are ultimately made by individuals deciding the optimal mode of transport for their needs. However, with the vast majority of infrastructure for both private car transport and public transport provided by governments, public policy decisions play an important role in determining the attractiveness of the different modes for commuters.

On the political Left, and often more broadly, there are perennial calls for public transport to be 'improved'. The argument is that not only would this deliver better transport outcomes, it would also fix perceived environmental and land use problems allegedly caused by over reliance on the private motor car. This argument generally ignores the fact that many citizens enjoy car travel, fails to consider potential impacts on taxpayers, and too often even shows little understanding of what improvements would actually make public transport services more attractive to users.

This last failing was well illustrated by Melbourne's Sunday Age which for several weeks earlier this year whipped up a populist campaign to make public transport free to the end user. To be fair to the Sunday Age, it also gave some consideration to other more serious aspects of the public transport debate.

Victoria is a logical starting point for discussion of the big issues in transport, as it was the venue for the most ambitious actions taken in Australia to reform and improve public transport-the Kennett Government's 1999 privatisation, or more accurately, franchising out, of the States public transport system.

As if to underscore how difficult it is even to agree upon the basis for any discussion on transport issues, at the same time as the Sunday paper was running its series, its weekday counterpart was sponsoring a lengthy debate in its business section on whether car users subsidise public transport users, or vice versa.

Given that debate, it is hardly surprising that an inability to agree upon the basic parameters also hinders any clear assessment of the success or otherwise of the privatisation. There is much dispute about the financial outcomes, even before one starts on the more obviously subjective aspects related to the quality of the service. There is no doubt that the current operators in Victoria are receiving a larger subsidy than envisaged in their 1999 bids, but how the revised figure relates to what taxpayers would otherwise be paying if the service were still run by the Government, is a moot point.

Although, with the benefit of hindsight, it is clear that the bidders for the franchises were too optimistic in their 1999 projections, it is still hard to see what the Government and its advisers could or should have done to dissuade them from bidding so aggressively.

The fact that some of the bidders had been too keen was demonstrated most graphically when, in December 2002, the largest operator, National Express, walked away from its train and tram franchises. In what was, for commuters, a seamless transfer, the other operators took over its franchises. Naturally this was done with Government funding at a level above that provided to National Express, but whether that took the subsidy above what it would otherwise have been is keenly debated. A recent study by some academics claimed that taxpayers are paying far more than if the privatisation had never taken place but, among other questionable premises, their work failed to recognise adequately the benefits in new rolling stock and increased services that have flowed since 1999.

An inability to establish the facts is not the only unusual aspect of the ongoing debate about whether the privatisation has been a success. While one might expect former Premier Jeff Kennett to defend his policy vigorously, he has instead commented that it had turned out 'different from what we intended'. By contrast, current Labor Transport Minister Peter Batchelor supports retention of the current system of private operators that 'are managing the train and tram networks in a time of unprecedented passenger growth' and claims that the former Government authority would have failed to handle the Commonwealth Games in 'the magnificent way the current operators did'. …

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