the public finance debates: “it’s time…new zealand extended charging for public...
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THE PUBLIC FINANCE DEBATES:
“It’s time…New Zealand extended charging for public infrastructure”
Commentator:
Chris Money
Three Questions
The VUW-GEN Public Finance Debates November 12, 2013
1. What does “It’s time….” mean? 2. What are we actually charging for? 3. Is directly charging the best response?
Now or Never or At Some Stage?
The VUW-GEN Public Finance Debates November 12, 2013
• 4 major concerns with the current system:– Increasing reliance charging to achieve multiple policy
objectives– Intergenerational funding inequities– Net revenue efficiencies now, but technology is moving
fast– Do sustainable networks need demand management?
Net
Inve
stor
s
Now or Never or At Some Stage?
The VUW-GEN Public Finance Debates November 12, 2013
Palm SpringsPortland
Detroit
Direct charging for cities is already happening
Proposed and implemented schemes
Singapore
Stockholm
Milan
Edinburgh, ManchesterWest Midlands, Bristol
Cambridge, Telford
Auckland
NetherlandsNew York
Serious proposals not progressed and unlikely to come back soon
Recidivists
London
The pipeline of potential schemes Potential schemes
USA
Copenhagen
France & Germany
Tel Aviv
Toronto
Guangzhou & Hong Kong
Sydney
What are we charging for?Construction Maintenance Consumption
Roads Road users/ratepayers Road users/ ratepayers No one
Public transport Road users/ratepayers Road users/ratepayers Users (40-60%)
3 Waters Users Users No one
Power Users Users Users
Telecommunications Users Users Users
The VUW-GEN Public Finance Debates November 12, 2013
The arguments summarised
Proponent Opponent
Efficiency 1. Critical to managing long-term service levels
2. Fairly apportions costs where they lie
3. A more sustainable funding path
1. Pricing will reduce mobility and therefore economic activity
2. Restricting access at point of use is sub-optimal from a revenue perspective
3. High transaction costs
Equity 1. Sub-optimal outcomes for those with higher values of time.
2. Those that don’t create the externality costs “overpay”
1. We’ve already paid2. Alternatives are critical –
disconnect between viability of alternatives, incomes and origins/destinations.
Other points 1. Proof is there for all to see. 2. Not an answer on its own.
Scheme Design is critical to outcomes
The VUW-GEN Public Finance Debates November 12, 2013