30 thoughts on “Monday Message Board

  1. a few thoughts on 4WD economics for Swade (not rolled gold JQ economic comments of course, but may be of some interest).

    the whole issue of pricing and transport is one that Australia needs to examine – and 4WD vehicles are just one of the elements. Charging road users full costs should take in to account direct costs such as emissions (either particulate – which involves cleanup costs immediately, or go the whole way and also charge for CO2 emissions), congestion and road damage. Such charges would ensure proper price signals, and potentially change behaviours. At present the system encourages free riding (not a pun in this context) given the taxpayers as a whole pick up a large proportion of these sorts of costs.

    On emissions charging, this could be built in to registration fees reasonably easily given that the data on emissions are available for each type of vehicle; true, there are variations in practice depending on how well the vehicle is maintained, but outrageously offensive emitters could be picked up by fines for maintaining an unsafe vehicle (in this case, unsafe to others if not the driver).

    Congestion charging is a well accepted concept internationally, and has been the saviour of central London since being introduced by economically rational Mayor Ken Livingstone (I never thought I’d write that!). Again, it recognises that vehicle use has externalities in terms of the costs that congestion and delay impose, and should be charged. In our region, Singapore has a particularly sophisticated electronic charging system for both congestion and use of certain routes.

    Introducting charges to reflect road damage has long been a concern to transport economists – and it’s particularly relevant to 4WD vehicles which tend to be heavier. I’m not an engineer, but I’m told damage is in proportion to the square of the weight on the axle of a road vehicle – so a heavier vehicle does a whole lot more damage than a lighter one. Of course the taxpayers as a whole pick up the tab for potholes and repairs.

    This discussion is just on the obvious costs; there is less justification for charging users for eg accident and medical costs given they presumably don’t actually intend to be in an accident. Insurance premiums should in theory reflect the different tendencies of different vehicles to be involved in accidents (maybe some of the 4WD drivers out there know whether they pay a higher premium?).

    Disclosure: my family has a Subaru Forester. we actually take it off the main road to reach bushwalking spots, too! we love it because it is small, light, and fuel efficient, therefore relatively environmentally friendly (if one has to have a car at all that is).

  2. On the issue of contracting, it’s worth reading Ross Gittins’ article in the SMH on the aging of Australia’s population (http://www.smh.com.au/news/Ross-Gittins/Old-age-is-good-for-your-wealth/2004/11/30/1101577483809.html?from=storylhs). He points out, among other things, that companies (and government departments) are likely to become increasingly keen on retaining their staff as labour shortages become evident due to more of the population being aged. Labour will once again have the whip hand.

  3. One solution to growing labour shortages is to encourage more sole parents and DSPs to enter the labour market. As I understand it, there are as many (if not more) people in each of these categories than people on Newstart Allowance. Hence the new govt now has a Minister for Workforce Participation.

    There’s also the option to increase the minimum age for the old age pension. Would Howard do that? Heck, if people are healthier and live longer, why not make them work longer?

  4. November 2, 2005 the first anniversary of Bush’s “re-election”, we will take the first major step in this by organizing a truly massive day of resistance all over this country. People everywhere will walk out of school, they will take off work, they will come to the downtowns and town squares and set out from there, going through the streets and calling on many more to join us. They will repudiate this criminal regime, making a powerful statement: No! This regime does not represent us! and we will drive it out!

  5. >>As the happy owner and driver of a Mitsubishi Pajero that’s never been off-road I’d be more than happy to pay a bit extra for rego if it is proven that it causes more damage than regular cars. It’s such a nice car to drive that the extra cost would be worth it, and I’m all for user pays.

    Andrew, go check the rates of sales tax and import duties on 4WDs and passenger vehicles. You’re getting a taxpayer-funded hand-out.

    As for public transport, it generates significant positive externalities – reduced pollution; fewer traffic accidents; reduced congestion; allowing older people to remain in their homes and other of expesnive care facilities when they can no longer drive; increased labor market efficiency by allowing low-incoem workers to commute further.

    Any public transport system that recovers it’s full costs from its users in the presence of such externalities is operating in an economically inefficient way.

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