But I can’t help but think that and geograpically located public good (transport, beaches, parks etc.), if subsidised, may end up passing much of its subisdy directly to landowners. If such a good is underpriced, then agents are prepared to pay more for access, whether by directly higher prices, or trading off space for access (living in a flat near a station) or time (driving/walking to the station).

Which may mean that whilst a user may have higher incomes, if they are a recent buyer or renter, their incomes after transport and land may not be much better off than if there was no subsidy, most of it dissapearing into rents in the form of….rent.

Which poses another quandary, that if a subsidy is required for other purposes (lowering road congestion/pollution etc.), they may need to increase it just to get the appropriate price signals at the level of the agents they want to influence.

Bugger.

and now, amusingly, I am using my travelpass to take a bus and a ferry to swim in an enclosure elsewhere rather than buy a $5 pool ticket here, because the travelpass makes the marginal cost $0 in dollars.

I don’t think we can look at moving to unsubsidised any time soon, although if it were accompanied by appropriate increases in road charges to remove its hidden subsidies and external costs, and accompanied with reductions in taxes and increases in welfare then there could be a pretty good case made for it. Rents would go up closer in, but then perhaps a lot of apartments might also go up, which may not be a bad thing environmentally.

I do think though that some rail commuters would prefer paying a greater share of their ticket cost if it meant newer trains on a modern network. The way the pricing review is set up this trade is pretty much out of the question. It is a review process for a static network, further capital outlays are, of course, catered for, but a trade of ticket price subsidy levels for increasing the network coverage is not.

A lot of Sydney commuters would be quite surprised if they saw they level of subsidy printed on their ticket. Some may stop complaining about the state of the network, others may want to pay more to get a decent one.

The picture, by the way, is the Bradfield plan from wikipedia from the 1920′s. It’s a plan Sydney is still only dreaming of.

Yes, thats right, that weekly ticket for $30 really costs $120 to provide with the NSW State Government contributing $90, that $6 return ticket really costs $24 etc.

This is not completely true. During times of the day when the trains are packed and the prices are full (i.e. peak periods) the effective subsidy is less (probably nearly zero). During off peak times, there might be two or three people per carriage but the prices off peak are lower and all the infrastructure costs just as much to maintain. The real problem is that we have built infrastructure designed to handle massive peak loading but only for a few hours out of every day.

If more businesses were willing to move their offices out to where their employees can afford to live, then the commuter peak on the trains (and roads) would be greatly reduced and the rail network could run much leaner. From the business point of view, why care about the cost of transport? They don’t pay it.

I cannot remember the politics that got rail pricing into a regulators hands with so little guidance for the regulator and so little flexibility for the government, but it is time it was undone.

If the weekly ticket really went up to $120, that is approx $6k per year but at a marginal tax rate of around 33% you actually need to earn $9k more per year just to pay for transport. The roads would become bedlam and a lot of people would be demanding pay rises. Of course, maybe we could get some of it back in tax breaks but seems rather unlikely. Rents in all the city apartments would go up too.