2011-07-17

Treating Rail Transport as The Commons

As a child in Northern Sydney in the mid 1980s, I lived near a railway line. On the way to school each morning I would see the regular-as-clockwork XPT pass by, New South Wales' newest high speed train. I remember feeling a sense of pride that we had built and operated such a great piece of machinery.

Since then neoliberal economics has made rail transport difficult to maintain or expand or promote. The idea of "user pays" and government departments (such as Countrylink) being corporatised and made to run profits was turned into policy. Of course there's nothing wrong with such policy if it can indeed create more efficient services - but in the case of rail it has not. As a result, rail has been seen as an increasingly obsolete and expensive infrastructure.

Yet there are two important factors we must keep in mind when looking at rail transport.

Firstly, the long distance delivery of bulk grain and bulk ore needs rail. In Australia (as in other countries) ore from mines and grain from farming areas can only be transported to ports by rail. Using trucks to carry that much material would be prohibitive. As a former Newcastle resident I can testify to the power and presence of trains transporting coal to the port from up to 100km inland.

Secondly, studies have shown that the total cost of rail-based public transport is less than the cost of running a car. I blogged about this in 2006 and subsequently argued for free rail-based public transport paid for by taxes.

Given that these two facts are true, why has rail been relegated to the "expensive and unprofitable" category? Simple. It's because the neo-liberal doctrines of "user pays" does not work.

A good way to think about this issue is to compare the rail system with the road system. While there are certainly toll roads run by private corporations, the vast majority of road infrastructure is owned by government and maintained via tax revenue. The NSW government sought some years ago to approve private tollways, but the result has been less than impressive with some consortiums going insolvent due to financial losses. In short, running private tollroads in NSW has been problematic. This is because it is almost impossible to impose a direct "user pays" system whereby users of a certain road pay for the upkeep of such a road. At a tollway level there is still a chance that it might work. But for ordinary suburban streets the idea is simply ludicrous.

So if the road system should be maintained by government and funded by tax revenue, then why shouldn't the rail system?

At present, mining and agriculture companies pay enough for rail freight to exist solely upon a user pays system. But what about suburban public transport? Since a user pays system has been in place for over a century in most places in the world and has not worked, and since studies have shown that rail is more efficient a transport system than road (in terms of money spent on travel) maybe we should see the rail system in the same way as we see "The Commons" - a resource that is collectively owned. Of course for most rail systems this is technically true - the rail system is owned and funded by government, who act on behalf of the people. Yet the problem does not seem to be its ownership, but how people can use it. Charging people a ticket fee for traveling from A to B, while seemingly common sense, is what seems to cause the problem.

In short, making rail-based public transport free and funding it entirely by tax revenue is the policy governments should take. While it might "reek of socialism" the reality is that it will make transport cheaper, which means that it is a type of microeconomic reform which, ironically, is what neoliberalism preaches as an important goal.

3 comments:

richard middleton said...

There is so much that's right and intelligent about this policy that one can almost guarantee it won't happen.

A said...

I'm sorry, but making public transport free is not such a good idea.
Some reasons why are here: http://www.ptua.org.au/myths/free.shtml

One Salient Oversight said...

A. I read that link. My reply to it is as follows:

1. No industrialised nation that I know of has attempted to make Public Transport free over an extended period of time. To dismiss it because certain theories don't agree with it is quite wrong.

2. People who live in public transport areas and who use it to go to and from work would agree that making it free would benefit them, as well as many people who live in those areas who don't use it. The answer to those who complain that public transport isn't in their areas can be answered by the call to build more public transport routes.

3. The article writer doesn't take into account the total cost of free public transport verses the total cost of a car & road system. More money spent on rail means less money spent on roads. Higher tax rates imposed on people to pay for higher Public Transport costs if more than offset by less money people spend on buying & maintaining personal vehicles.