Fares and fairness:

Ian Lowe writes: Re. “The Urbanist: should public transport be subsidised?” (yesterday, item 13). Alan Davies correctly points out that public transport is subsidised and asks why this non-means-tested benefit is given to all who use public transport. That is a good question, but would it not be equally valid to ask why the public purse pays for roads and makes them freely available to all, a huge non-means-tested benefit to all who drive?

The Productivity Commission has pointed out that most of the damage to roads is done by large freight vehicles, so taxpayers effectively subsidise freight operators by about $30,000 per truck per year, but nobody questions this hand-out. Every citizen pays about $180 a year to subsidise the transport fuel used by the mining industry, inflating the profits that largely go overseas, but the Treasurer declined to wind back this outrageous hand-out of public funds in the Budget. If we are going to have a debate about transport subsidies, they should all be on the table.

More broadly, we should be asking why State governments continue to pour huge sums into road schemes that we know cannot meet the transport needs of our cities. The WA Budget this week blew about $130 million on urban road schemes and made no provision to build the public transport infrastructure the city urgently needs. Melbourne has no rail link to its airport and no plan to build one.

If we were thinking about the viability of our cites in the age beyond peak oil, we would be rapidly investing in public transport. The obsession with roads will put huge burdens on future generations.

Niall Clugston writes: Alan Davies’s argument on public transport is constructed from a series of leaps of logic.

The assertion that CBD workers are the main beneficiaries of public transport is generalised into considering them the only beneficiary. Some CBD workers being affluent becomes all CBD workers being affluent. Some CBD workers lacking viable alternatives becomes all of them lacking viable alternatives.

From this he leaps to the incredible conclusion that if subsidies were cut, and ticket prices more than quadrupled, there would be no impact on patronage. In fact, even the well-off would consider driving and people of low income would be devastated.

A logical approach to public transport would not be to eliminate subsidies, but to eliminate fares. After all, according to Davies’s figures, fares recoup as little as 22% of operating costs, and none of the capital costs, and from this must be subtracted all the costs relating to the ticketing system.

In the interests of fairness, let’s eliminate road tolls and provide free parking at transport hubs on the outskirts of the CBD, such as Sydney’s Olympic Park. Problem solved.

Queensland:

Patricia Hoffie writes: Re. “Rundle: our Greek tragedy is that democracy here is broken” (yesterday, item 5). Well there are little rumblings of not-very-democratic discontent in terms of the little Greece of Brisbane — this weekend is planned as the annual Paniyiri held in Musgrave Park — but also home to inner city Murris, and for many long, long years an ongoing campsite on the edge of one of the Boundary Streets (West End) of Brisbane that corralled any indigenous people in to prevent them from coming across to the “white” side of the river.

In one of his first telling acts (his first was axing the Premier’s Literary Awards) Campbell Newman mustered 250 police to remove Indigenous owners of that land from the park to make way for the souvlakia and honey sesame balls … lots of marching and demos to come, and ghastly waves of putrid ether from the Bjelke-Petersen past (and Campbell all too happy to claim him as a hero)…

Greece may look like chaos, but it’s still difficult to ever top the craziness of Queensland politics.

Welfare:

Terry Mills writes: Re. “What would a real economic reform budget look like?” (yesterday, item 2). Joe Hockey seemed to be signalling some major changes in how the unemployed will be treated under an Abbott government. In his speech to the Canberra Press Club he said “We will also insist on work for the dole” indicating a return to the Howard era mutual obligation program .

It seems that the coalition approach is going to be that you are either undergoing full time education or job training or you will be required to do community work in exchange for New Start payments. He linked this policy toughening to the proposed “Green Corps”, teams of unemployed who, as part of the coalition’s Direct Action Plan on climate change, will be conscripted to plant trees.

Housing:

Adam Schwab writes: Poor Rory Robertson (yesterday, comments), a few years away from Macquarie and out of the spotlight and he appears to be getting a little confused. Rory was perhaps a little too quick to point out that I overstated the housing turnover, proudly claiming that “housing turnover at about 4% today is less than half of Schwab’s estimate. For his information, the RBA estimates that the range for housing turnover in recent decades has been 4-8% per year, and we’re near two-decade lows at present.”

The problem for Robertson is that I was being conservative in claiming the 10% figure — a lower turnover, as Robertson was gleefully pointing out, actually reinforced the point I was making. That is, it takes only a small number of property buyers to keep a bubble inflated as such a low proportion of property actually changes hands each year. Although given Robertson’s views, such an error in understanding is not exactly out of character.

Robertson famously claimed “victory” in 2010 in his bet with Steve Keen, only to not really win it, but Keen did the walk and raised a fortune for charity anyway. Now poor old Robertson is still trying to pump up the housing market despite almost everyone, other than his old mate Chris Joye, disagreeing with him. Rory was also wrong about gold in 2010, when he ironically claimed in a newsletter called “Bubblewatch” that “punters should be sceptical of gold around US$1,250 per ounce.” Since then gold has dramatically outperformed the share market and Rory’s beloved residential property (which should have been the subject of Rory’s newsletter).

No word on how Robertson can explain how a 10 percent drop in real prices fits in with his bullish property views.

Peter Fray

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