If the carbon tax raises the price of public transport and push people back into their cars, could it potentially defeat the environmental purpose?
The NSW government has estimated fares will rise nearly four times the federal Treasury prediction. However, the real impact is hard to assess, in part because each state will face individual consequences.
The government has defended the tax with its prediction of minimal effects to transport. Treasury states: “Despite continued growth in transport activity across the economy, carbon pricing results in lower emissions in the transport sector. The carbon tax would have no ‘measurable effect’ on transport choices. It would increase prices by less than 1%.”
But critics say this is a sweeping statement, unlikely to apply to all states. “It’s an undeniable fact that the carbon tax is bad for public transport customers because it means the cost of providing buses, trains and ferries will go up,” the NSW Transport Department’s Chelsea Perry said last year.
Premier Barry O’Farrell said the tax would increase public transport fares in his state by up to 3.6%: “I also fear many many Sydney commuters will turn away from public transport and get back into their cars because the carbon tax will push up fares.”
This NSW figure predicts the tax will push up fares by up to $150 a year by 2013 for commuters. “Logic dictates that if price goes up, there’s a disincentive to use it,” O’Farrell said.
A spokesperson for Transport for NSW, Angela Kamper, told Crikey the cost of the tax would be passed on to consumers: “The government is unlikely to be able to absorb these costs so there will be pressure to increase fares. The carbon tax will also increase the cost of inputs to transport projects. This will need to be taken into account in future transport proposals.”
Economics Professor Sinclair Davidson has estimated Victorian commuters will be hit with a 7% annual rises in fares. The Liberal state government claims future infrastructure is at risk because of the tax, with the increase in electricity costs amounting to $13 million, or the cost of one new train.
And in Queensland, commuter lobby group Rail Back on Track has warned power costs will push up fares. “If public transport looks like having fare increases due to the carbon tax, people will vote with their feet and go to cars and cause more congestion and more pollution,” the group’s Robert Dow said.
Private contracts for the operation of public transport make the calculations more complex. In Queensland, a new $1 billion light rail system on the Gold Coast called Goldlinq will be operational by 2014. A spokesperson for construction firm McConnell Dowell Constructions said: “It is still too early to confirm what the carbon emissions will be once the system is in operation.”
Regular public transport user Emma Down says she will stop using public transport if fares rise along with the rise in the cost of living.
“Even though I live close to the proposed Goldlinq route, I cannot afford to keep using public transport if prices continue to rise when the carbon tax begins,” she said. “The cost of living is rising more and more, the worst thing for the public would be for our transport, a service that’s a part of many people’s everyday lives, to increase in price as well.”