Is Sydney ready for “congestion” tolling?

NSW Treasurer Eric Roozendaal handed down his government’s much awaited mini-budget today, and boy has he been hit with a few brick bats in the media. Ross Gittins has effectively panned the mini-budget, commenting that it will “impress no one and win the Rees Government no friends”. One of the most contentious new measures has been a move to introduce a kind of cutdown congestion charge to two of the inner city’s toll roads. Roozendaal outlines the scheme in his budget speech [PDF]:

The Sydney Harbour Bridge and the Sydney Harbour Tunnel will become the first motorways in Australia to switch to time-of-day tolling.

The toll on these roads will be a ‘peak’ toll of $4, a ‘shoulder’ peak toll of $3 and an off peak toll of $2.50.

This is the first change to the Harbour crossing tolls in six years.

Mr Speaker, every cent of the extra revenue raised will go to buying new buses.

Despite the fact that this new measure comes in difficult economic times, I honestly think that on balance, it is a welcome step forward. If New South Wales does need more money to invest in public transport (and I don’t think this is in dispute), why not raise it through a new measure that acts as a disincentive to motorists? Why not ask the people who are causing Sydney’s ugly traffic snarls to pay for it? As Roozendaal says, the Sydney Harbour Bridge and Tunnel tolls have not changed in six years – if we really are concerned about climate change and decreasing traffic on our roads, then an increase is more than due. It is probably worth adding that the cost of the toll will actually drop by 50c per trip for people who use either tollway in off-peak times.

Predictably, both NRMA President Alan Evans and the NSW Opposition have condemned the congestion tolling concept, but the reasons they give for their opposition seem fairly half-baked. Besides throwing tee-hee slogans like “Nathan ‘Ned Kelly’ Rees”, “daylight robbery” and “highway robbery” out there, Evans’ main argument in opposition to the new measure is that Sydney does not currently have a sturdy enough public transport system for motorists to switch to. This seems to be the line that Barry O’Farrell is pushing as well, with the Opposition Leader suggesting that CityRail can’t cope with any increased utilisation during peak hour. While there is an element of truth to what both Evans and O’Farrell are saying, they are also somewhat missing the point. This new measure is being used to pay for more buses for Sydney. In other words, better public transport. In the current fiscal environment in New South Wales, assuming that we do actually want to improve the state of Sydney’s public transport, I feel that the new congestion tolling regime is quite reasonable.

So am I saying the measure is perfect? Hell no. Anyone who drives around Sydney or has done so over the last decade will know that there are several other key arterial roads that could do with a lot less traffic on them – Victoria Road, Parramatta Road, and the City West Link to name just three. Presumably because these roads do not currently have the infrastructure necessary to support a toll-based congestion charge, the traffic snarls on these three roads will not be going away any time soon – in fact, they may even increase as some drivers change their route in order to avoid the increased tolls. The measure, bound as it is to the Sydney Harbour toll roads, also unfairly targets those who live north of the harbour and work in the CBD or south of it, and vice-versa.

It will be interesting to see if we see the vigorous public objections to this charge that Ross Gittins predicted we would see if a congestion charge was introduced back in 2006. The NSW Government has not gotten a lot right in recent history, but I think it deserves a bit of kudos here for delivering a spot of tough love to motorists and indeed the motoring lobby.

A scandal a day keeps supporters away

Just when one thinks that things seriously can not get any worse, they get worse for NSW Labor. NSW Assistant Health Minister Tony Stewart has jeopardised his position and indeed further jeopardised the Rees Government by managing to somehow involve himself in a scandal at a recent Garvan Institute dinner. Stewart has been accused of verbally and physically abusing one of his staffers at the dinner, with the result that the staffer in question was moved to another office, and a formal complaint regarding Stewart’s behaviour was raised to Rees today. Stewart has been removed from the ministry pending an investigation into the matter.

Regardless of whether Tony Stewart is really to blame for all of this or not, the fact that this whole issue has erupted is a further unfortunate indictment of the NSW Labor Government. When members of the government and their staffers can’t find a way to get along during their day-to-day business without causing a needless scandal for their government, you have to wonder if anything is actually being accomplished for the people of New South Wales. In political terms, the Garvan Institute dinner that Tony Stewart attended was a free hit for him and his staff, and a free hit for the Rees Government. How it has resulted in this latest bad news story quite simply beggars belief.

When friends, family and colleagues talk to me in the lead-up to the next state election, soliciting honest advice from me on why I think they should vote for NSW Labor, I am really sad to say that on the government’s recent form, I don’t think I will be in the position to be in the slightest bit persuasive.

The news that isn’t news in Ryde

Given the dearth of healthy political debate in New South Wales at the moment, I don’t think it is really fair to describe next Saturday as “Super Saturday” as Lisa Carty does in the Sydney Morning Herald today. Sure, we have four by-elections happening in the state next weekend (triggered by the migration of Rob Oakeshott to federal politics and the resignations of Morris Iemma, Reba Meagher and John Watkins), but they are happening in a distorted political environment in which the media is gorging itself on whimsy rather than reality. Nathan Rees has received scarcely anything but a headkicking from the media since becoming Premier, and in such an environment it is patently obvious how by-elections are going to trend for the government.

Labor is tipped to cling grimly to both Cabramatta and Lakemba and indeed it should do so, although such is the environment that just about anything might well prove possible. In Port Macquarie Labor are not fielding a candidate, and the NSW Nationals have a fight on their hands to win the seat from a slew of independents.

In some ways I think Ryde is the most predictable seat of the lot. Lisa Carty reports the following breathlessly in the SMH:

In a stunning result for the Liberals and their candidate, Victor Dominello, The Sun-Herald/Taverner poll of 500 voters in the state seat of Ryde tips a swing of more than 20 per cent against Labor.

Pollster Philip Mitchell-Taverner said the shift in sentiment away from Labor and towards the Liberals was “extraordinary”.

For mine this is far from an “extraordinary” polling result. Let’s consider the following factors for a moment:

1) The toxic media environment that Nathan Rees finds himself in as head of a deeply unpopular and self-destructive government that has just vomited out its previous Premier and Treasurer.

2) The retirement of popular (and credible!) local member John Watkins.

3) The downward trend in two-party preferred vote that Labor received at the last election. Since the 2003 poll Labor’s 2PP vote has dropped by 5.4%, even without consideration of the factors mentioned above.

4) The demographics in Ryde, an electorate which borders Epping, Ku-ring-gai, and Lane Cove, some of the most blue ribbon Liberal seats in the state.

5) The fact that this is a by-election and voters have the luxury of being able to “send the government a message” by either lodging a protest vote or opting not to optionally preference Labor. It does not have to worry about the potential consequences of the NSW Coalition gaining control of the government in this poll.

In short, this is not an extraordinary polling result, and indeed I doubt whether there are too many people in even the NSW Labor Party let alone outside it who think a government victory is likely in Ryde this coming Saturday. It is virtually a dead rubber thanks to the prevailing conditions. The poor Labor candidate Nicole Campbell has nothing short of a mammoth task on her hands… I hope she wears some protective mental gear when the voters trot outside with their baseball bats on Saturday morning!

The OECD gives Nathan Rees a nudge

With respect to the incredibly destructive electricity privatisation debate in New South Wales, I remain a fence-sitter, at least to some degree. I was not convinced by the arguments that were put forward by the former Premier and former Treasurer Michael Costa in support of the sell-off, nor the arguments of those opposing it. In an ideological sense I do not believe there to be a simple answer to the questions raised by the associated issues in this case. The old left/right dictums of “state ownership” and “private ownership” can not simply be applied glibly to complex situations such as this one, no matter what the nation’s rigid ideological warriors might continue to believe.

It’s probably worth considering the politics of this for just a moment. The Rees Labor Government is in a spot of bother, given that its former leadership team was determined to push the privatisation through, with or without the support of the NSW Labor Party. With Nathan Rees enjoying only a tenuous command of the party organisation, he lacks the political capital to defy the rump of the party on this issue, as Iemma and Costa bravely (and stupidly) tried to do. This leaves NSW Labor looking like a bit of a shambles, with the whole issue shelved once again for now. Of course, unless the government can turn things around rapidly over the next year or two, the smart money in 2011 will definitely be on the Liberal Party returning to power in New South Wales, as unsavoury as that is for Labor supporters like myself. If and when that happens, it is likely that electricity privatisation will be back on the agenda anyway, and this is something that the Rees Government needs to consider carefully.

On balance, from what I have read, I do believe that a partial sell-off of the state’s electricity assets probably makes sense for the people of New South Wales. On the other hand, I don’t think any person within the Labor Party has yet cogently argued their case to the people of this state or indeed the party’s rank and file. It’s interesting therefore to note this excerpt from the OECD’s policy brief [PDF] associated with its Economic Survey of Australia 2008 report (pp. 8-9):

The implementation of a competitive domestic energy market needs to be accelerated, with companies still under government control privatised and the ceiling on electricity retail prices removed. Public control over electricity companies is neither necessary for securing power supply nor a guarantee of efficiency. Electricity prices have risen faster in New South Wales, where there is still a public monopoly, than in other states in eastern and south-eastern Australia since the creation of the National Electricity Market, whereas productivity gains have been smaller.

So where to now on the electricity industry Premier Rees? If anywhere at all?

More interest rates gubbish in the media

With an interest rate cut all but announced for tomorrow, I have been bemused to observe the public debate on interest rates once again focus on a red herring. Treasurer Wayne Swan has taken the brave and perhaps politically unusual step of declining to demand that Australia’s banks pass on the hypothetical interest rate cut to consumers. Shadow Treasurer Julie Bishop has taken precisely the opposite tack, criticising the government for not demanding that the banks pass on the cuts:

Reserve Bank governor Glenn Stevens has reportedly told Prime Minister Kevin Rudd that squeezing the banks too hard could make it unprofitable for them to lend and push the Australian economy into recession.However, opposition treasury spokeswoman Julie Bishop said passing on the full RBA cut would help keep people in jobs and the Australian banking sector stay strong.

“One of the most important ways to keep our financial sector strong is to ensure that Australians keep their jobs so that they can pay off their mortgages … their bank loans,” she told reporters in Perth.”

And that is why if there is an interest rate cut tomorrow it should be passed on in full so that people can keep their jobs and keep paying off their financial obligations.”

This debate raises some interesting questions about what Commonwealth Treasurers should and shouldn’t do, or perhaps more interestingly, what they realistically have the influence to do. Should Wayne Swan really be getting on the blower, as Julie Bishop seems to be suggesting, to the chiefs of the big five tomorrow and demanding that they immediately pass on the hypothetical cut to consumers? Does Julie Bishop, a so-called economic rationalist, have so little faith in the market that she feels the Treasurer needs to instruct individual private organisations on how they run their business? Put simply, it is an absurdity.

There are three points worth making here in rebuttal to Bishop’s foolishly populist demands:

1) It is not the Commonwealth Treasurer’s role to attempt to run the business of Australia’s big five banks by demanding that certain monetary policy actions be taken;

2) The Treasurer’s views are probably the least of the concerns of Australia’s big five. They are businesses answering to their customers and shareholders, not the fiefdoms of the Treasurer. here Any views that Treasurer Swan attempted to impose upon them would almost certainly be ignored;

3) It is almost a certainty that one of the big five will elect (if not immediately, than in the relatively short-term) to cut rates and seek to make their offerings more attractive to consumers. When this happens, there is a pretty good likelihood that the others will follow suit in due course.

This is not a good start from Bishop. One wonders whether the Turnbull Opposition is going to suffer for not having someone who can reliably score the odd point (e.g. the Opposition Leader!) against Swan opposing him in the Shadow Treasury.

Unpowered, unsupported computers for schools?

One of the most publicly prominent foundation stones of Federal Labor’s “education revolution” policy program was the so-called National Secondary School Computer Fund. Under this policy, announced during the November 2007 election campaign, a Rudd Labor Government would theoretically provide access to a dedicated computer for every Australian student in Years 9 – 12. Secondary schools across the country would be able to apply for capital grants of up to $1 million each from the government for funding either the upgrade of existing computers or purchase of new computers for this purpose. Although the actual educational benefits of this policy are a little on the nebulous side, the summary policy principles were sound, and one would have to assume that it was a potentially vote-turning policy for the then Rudd Opposition going into election day.

Unfortunately, there is one aspect of this policy program that leaves something to be desired from the perspective of no doubt many schools and of course the state and territory governments; namely, the funding of second-order costs for all this new kit. Who pays to install, configure and maintain all these new computers that the Rudd Government wants to parachute into schools? Who pays the increased electricity bills that will no doubt result from all this new energy consumption? How will all the computers be housed, bearing in mind that many secondary schools across the nation suffer from a lack of teaching space as it is, let alone if they have potentially over a hundred new computers to support? The NSW Government, struggling as it is at the moment with a range of financial and political issues, has just in the last week announced itself as the first to withdraw its support for the program. It remains to be seen whether the Rees Government’s rebellion will lead to something of a domino effect amongst the other state and territory governments, but clearly Federal Education Minister Julia Gillard and the Prime Minister need to have a good hard think about how the potential fallout from a collapse in support for the program should be managed.

As I am sure any senior manager in a decent-sized government department or business can tell you, hardware procurement is usually one of the less risky and more manageable components of an organisation’s information technology services. Where costs tend to blow out on IT projects is when mid to long-term factors like the costs of providing ongoing support and maintenance are not factored into the equation. The phrase “a computer for every school kid” seems like a simple enough proposition and appears from the very outset to be quite an attractive one, but one does have to wonder whether the mid to long-term costs of this proposition were adequately investigated by the Rudd Opposition before it embarked on this policy.

Is it fair and reasonable to expect that the state and territory governments have to cough up the money to install, support and maintain all the new hardware that the federal government has dumped on them?

Deflating a culture of alcoholism?

It is of concern to hear that new figures released by NSW Health suggest that there has been a 59% increase in alcohol-related emergency department cases in NSW from 2000 to 2007. Let’s be blunt; in today’s modern era of global financial upheaval, governments across the country can scarcely afford to continue to fund people’s alcohol-related stupidity. We are perhaps at the point now where some new measures need to be introduced to try and turn this concerning trend around. NSW Health Minister John Della Bosca has expressed a willingness in recent days to do just that, although the proposals he has floated as possibilities so far seem only to be targeting the advertising arm of the alcoholic beverage industry (e.g. the introduction of warning labels and a full or partial ban on alcohol advertising).

To be honest, I am not sure either of these measures in isolation will achieve anything near the desired result. If the campaign that has been waged on tobacco over the last decade by both the public sector and NGOs has taught us anything, it is that a co-ordinated campaign has the best chance of making long-term inroads. It is of course a difficult task for a government in any country to “crack down” on a national pastime that has gotten somewhat out of control. The liquor industry and powerful industry organisations like Clubs NSW and the Australian Hotels Association would no doubt fight any measure from the government that threatened to eat into alcohol sales. Unless a bipartisan approach to the issue was forged by Labor with the Coalition, there is also little doubt that the Liberal Party would seek to fight any measures that could conceivably damage the alcoholic beverage industry, citing their doctrine of individual choice and responsibility. A frighteningly stereotypical rag-tag mob of yobs, publicans and anti-regulation zealots would then almost certainly jump on the Liberal Party’s bandwagon, and the NSW Government would suddenly have a difficult fight on its hands given it’s extremely vulnerable political position at the present time.

What I would encourage the NSW Government to pursue is a long-term, multi-tiered strategy for reducing alcohol abuse in the state. Policy measures introduced to begin with should be relatively moderate, with pre-legislated increases in the rigor of measures if annual targets are not met on an ongoing basis. While limitations or outright bans on advertising in some sectors should be considered as part of this strategy, I think the government also needs to attack alcohol abuse from other avenues. Carefully conceived information campaigns (such as the Quit for Life campaign) and the more recent punitive negative advertising introduced by the Howard Government in relation to tobacco also clearly have a role to play. People across the country (and in particular young people) need to be reminded and understand that they will turn into blithering morons after a certain number of drinks, and that it’s not “cool” to be in that state, it’s actually pretty sad.

Despite the prevailing economic orthodoxy, it remains true that targeted increases to taxation can also be a powerful part of a co-ordinated government strategy. I think there are grounds, given these recent figures, to increase the amount of excise on alcoholic beverages in NSW, particularly if the excess funds gained are pumped straight into programs that seek to minimise alcohol abuse. Given the increasing scale of costs, private and public damage, injuries and death that alcohol abuse causes every year in this state, surely it is only fair to expect that alcohol consumers cover more of the public costs that their hobby generates when it is taken to excess?

It’s soft-core smear, but smear all the same

If we needed any more proof that NSW Labor has struggled to take a trick over the past couple of years, the amazingly short tenure of Matt Brown as NSW Police Minister has provided it. Freshly minted Premier Nathan Rees had more than enough on his plate already (indeed – probably enough for a few lifetimes), and the last thing he needed was the silly and needless scandal that has erupted over the last few days.

Politics is a tough business, and I don’t think anybody reasonable would begrudge Matt Brown or any politician from letting off some steam from time to time. Unfortunately, we live in a political age when the media and political operatives (in this case, Imre Salusinszky from The Australian) across the country are remorselessly on the hunt for “news” that can be construed in any way as controversial. Brown should have been aware of this, and should have put his noggin to good use instead of acting the way that he allegedly did during his post-Budget party.

Rees, of course, made the right decision in presumably forcing Brown to resign from his post. One wonders whether the Premier should demand an even more stringent level of disclosure, given the abysmal track record NSW Labor has had with regards to resignations and embarrassing incidents over the past decade in power. Perhaps the new Premier should force any member of parliament who is implicated in a scandal that breaks before he hears about it to resign not only from any ministerial duties but from parliament altogether, forcing a by-election.

In New South Wales in particular, the Labor Party desperately needs a public image overhaul. It can simply not afford to endure any further absurd scandals of this nature; it’s time for the Premier to lay down the law to his colleagues.

Nathan Rees in Hansard

Comparisons have already been drawn by some commentators between the elevation of Morris Iemma to the premiership of New South Wales in August 2005 and the unexpected rise of Nathan Rees to the same position this week. If anything though, it is arguable that the rise of Rees has been even less of a rational leadership transition than that of his predecessor. Prior to his gaining the premiership, Morris Iemma did have nearing fifteen years of parliamentary experience behind him, including a relatively high profile stint in the Health portfolio. Rees, by comparison, has served less than two years in parliament and despite the touch of (welcome!) colour in his early job history, he can certainly be regarded as an apparatchik premier. For the majority of the last fifteen years he has worked as a political staffer.

The Murdoch press (as expected) is running a typically unreasonable line about the emergence of Rees which seems to imply that New South Wales will soon explode in a ball of uncontrollable flames. Realistically the only reasonable perspective, of course, is to welcome the departure of Iemma, Costa and Watkins as the breath of fresh air that it represents, and to wait and see if the new leadership team cuts the mustard. Given that they have had only a couple of days in the job, any more aggressive attacks on the Rees/Tebbutt team can be dismissed as the vainglorious acts of political expediency that they are.

Given that I know about as much about Nathan Rees as the average person (e.g. nothing), I thought it might be worth while having a bit of a look through his contributions to the Hansard over the last couple of years to try and get a feel for where he stands. There are a few excerpts and thoughts over the fold.

Continue reading