Carbon Tax Package finally Unveiled

above:  Julia Gillard announcing the government's Carbon Tax package

Julia Gillard's Carbon Tax package has suffered a very critical reception despite extensive compensation for trade-exposed industry and low-middle income households.  So how will the tax work to reduce emissions?  And what are we to make of charges of 'redistribution' made by Abbott and others?  In any case - is 'redistribution' such a bad thing?

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Tristan Ewins

12/7/2011

In the face of an almost all-pervasive fear campaign, what is the truth concerning Gillard Labor’s carbon tax?  How will it really be implemented? Who will it affect – and how?  Can it succeed in its object of restructuring the economy?  Does it involve elements of economic redistribution; and if it does, is that necessarily a bad thing?

According to ‘The Age’ (11/7) The Gillard government’s carbon tax will provide “tax cuts for those on incomes under $80,000” leaving “6 million households better off or fully compensated.”

Peter Martin has noted how “for more modest earners, the benefits are large: $626 a year for a single earner on $20,000; $1226 for a dual-income couple with two children on $75,000.”

(see: http://www.theage.com.au/environment/climate-change/cuts-for-everyone-but-some-worse-off-20110710-1h8zv.html#ixzz1RmjetGLR )

 Some of this compensation will be provided for by a restructuring of the tax system.

 For instance; the tax-free threshold will be “more than trebled to $18,200”.  And individual pensioners will receive compensation of up to $338 a year; with up to $510 for couples.

 Furthermore: $9.2 billion will be provided in the form of business compensation over a three year period – aimed largely at trade-exposed industries

 But “more than three million households” – those on the highest incomes - will lose out to some degree.  Some will only be partly compensated.  Around “one in ten” – the wealthiest of all - will receive nothing.  (‘The Age’, 11/7,  p 1)   

The most intensely affected areas of the economy will be energy generation and distribution. 

 Again, Peter Martin has noted how:

 “From mid-next year, the price of electricity will rise a further 10 per cent as a result of the carbon tax and the price of gas a further 9 per cent.”

But:

“The price of food is expected scarcely to move, advancing less than one-half of 1 per cent.”

(Read more: http://www.theage.com.au/environment/climate-change/cuts-for-everyone-but-some-worse-off-20110710-1h8zv.html#ixzz1Rmkguly2 ) 

The response from the Conservative side of politics was predictable.  Tony Abbott argued:

“[This is] socialism masquerading as environmentalism… This is redistribution pretending to be compensation.  It’s a tax increase pretending to be an environmental policy.”  (‘The Age’, 11/7/11, p 1)

And in the Herald-Sun in Melbourne reporter Steve Lewis seemed to be echoing Abbott by referring to tax cuts for struggling lower-income workers as a “classic ‘soak the rich’ Labor program.” (11/7, p 7)

In assessing the government’s policy it is best to respond to the claims of critics directly.

But to begin we should first return to basics: and that is recognising the virtual consensus in the global scientific community that global warming is real, and that carbon emissions by human beings contributes to this.   

So to what extent will the carbon tax and associated programs add up to a reduction in emissions?

The carbon tax will give a strong market signal for both investors and consumers to reduce emissions however practicably possible.   Indeed, Prime Minister Gillard has stated that this will result in:

“a reduction in carbon pollution of 160 million tonnes by 2020. [That’s] the equivalent of taking 45 million cars off the road.'” (See: http://www.skynews.com.au/topstories/article.aspx?id=636042&vId= )

Businesses will seek energy-saving measures, while households will do likewise – and also consider investment in renewable energy.  Indeed, there could well be a boom in the micro-renewable energy sector.  Overwhelmingly this will occur without financial pain for middle and low income households - as with compensation the main aim is to provide the market with a ‘price signal’ and not to raise revenue.

Meanwhile a “$2 billion-a-year Clean Energy Finance Corporation” will drive investment for research and development of clean energy technologies.  In this field Australia stands to become a genuine ‘world leader’.  ( see: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html )

Finally, Adam Morton from ‘The Age’ has noted how

“some carbon tax revenue will also be spent buying out and shutting down about 2000 megawatts of coal power, most likely either the Hazelwood or Yallourn power plant in the Latrobe Valley, plus the smaller Playford station in South Australia.”  (See: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html#ixzz1Rmn33ELS )

Morton has also observed how::  “the money to shut the plants will be from tax revenue paid by ''big polluters'', not budget cuts that reduce services.”  (See: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html#ixzz1Rmn33ELS )

This is absolutely crucial because Tony Abbott has committed to expensive forms of “direct action” on climate change running into billions and billions - which would be paid for through savings elsewhere in the Budget.   Refusing to submit his proposals to Treasury for costing, Abbott must nonetheless be aware that his proposed initiatives could not be funded simply through “efficiencies”. They would inevitably involve austerity measures. Perhaps these would apply in health and education; or perhaps through further privatisation of roads and imposition of flat ‘user-pays’ tolls - for which working class Australians would pay.

So before we even begin to address accusations of “socialist redistribution” we need to observe that price signals and direct intervention will make significant inroads into Australia’s carbon emissions, and as such is well-justified on environmental grounds alone.

That said, however, Abbott and right-populist elements of the media are raising alarm at the prospect of even mild redistribution via the chosen structures for compensation via direct payments and restructure of the tax system.

 In Melbourne on July 11th the Herald-Sun alone ran the headline ‘Kick in the Teeth for Hard Workers’ referring to a family on a combined annual income of around $130,000.  Another article in the same Herald-Sun supplement concerned ‘Sparkie’ (ie: electrician), Luke Peterson, who earns $150,000 - with his partner remaining at home to raise their children.  In this instance the headline ran: “ ‘Punished’ for wife staying at home with kids’.”

 Like several previous articles in the ‘Herald-Sun’ accusing Gillard Labor of ‘Class War’, these articles attempted at the same time to portray higher income groups as ‘average working Australians’ being ‘punished’ for effort.  Indeed the term ‘Sparkie’ could be interpreted as a colloquialism inferring working class status.

 But both the households considered in the Herald-Sun articles concerned would occupy a position in at least the top 20% of household incomes.  A single-income household with one income-earner bringing in a $150,000/year income would not be considered by most as ‘working class’ – colloquialisms aside.  Indeed, in this day and age few households servicing a mortgage and raising a family can afford for one partner to remain at home.

This raises the question that if action must be taken on climate change, how should we balance the burden?  The principle concerned could also be extended to other necessities: for instance, provision of health care, education, aged care, social housing, welfare and infrastructure.

Many Australians work hard for comparatively little return compared to the Herald-Sun’s chosen examples.  There are some dual-income households – with members employed in cleaning, retail, childcare, hospitality, textiles, and manufacturing – who bring in barely $50,000 before tax.  To speak of ‘punishment for effort’ for higher income households, and yet to prefer putting a disproportionate burden upon these families - would be revealing of the priorities and values of those concerned. 

In the labour market scarce skills usually bring in greater return, but many of these lower income individuals and households work under unpleasant and alienating circumstances – and with sometimes inconvenient or onerous hours.  In Australia, also, there is a recent history of falling minimum wages being compounded by housing market stress, past regressive restructure of tax, and increased energy costs as a consequence of privatisation.  It is not at all radical – or necessarily ‘socialist’ – to support a degree of redistribution to compensate those Australian workers and pensioners affected by these trends.

 And while there has to be reward to give incentive for workers to acquire skills, other ‘middle income’, ‘average’ individuals and households also deserve a ‘fair go’.  A worker on a wage of, say, $50,000/year should not be paying the same kind of tax as a worker on $150,000/year. Under circumstances where both workers were applying themselves with comparable levels of effort and effective sacrifice, skill differentials alone do not justify massive discrepancies in income. 

Finally there are the truly vulnerable: those who are unable to work as a consequence of illness or disability. Or those who have worked all their lives and deserve a peaceful and fulfilling retirement.  And to this we could add the unemployed: those who overwhelmingly are searching for work – and are subject to harsh active labour market provisions – but who need our assistance to ‘keep their heads above water’ and avoid social disengagement and isolation during the interim.  (such isolation can provide a ‘self-fulfilling prophecy’ of long-term unemployment)

 A progressive taxation system is therefore well justified in moderating discrepancies of income which are unjust, and ensuring universal access to social necessities . And the tax system more broadly is justified in providing best-value ‘collective consumption’ of essential social services from which most Australians benefit. Again: whether we speak of health, education, aged care, social security, social housing or other infrastructure – often these are provided more fairly and more efficiently via the ‘social wage’ than would be the case if ‘left to the market’.  

 Such principles have historically been acceptable to a variety of ideological perspectives – whether we speak, here, of liberalism, or of social democracy, or indeed of socialism.  It is only at the extremes propagated by the likes of Hayek and Rand – that the principles of progressive taxation, the welfare state and the social wage – have been rejected sweepingly. But such is the ideology which ‘has a grip’ on some parts of the Liberal Party of Australia today.  It is an ideology which threatens the ‘Americanisation’ of Australian society, with greater extremes of poverty, and a lack of basic social solidarity.  And it is an ideology that needs to be criticised explicitly by Labor.

All this said, there are dangers for Labor. In regions such as the LaTrobe Valley in Victoria there are well-grounded fears that the shift to renewable energy will ultimately cost jobs in coal-fired energy, and as a consequent will destroy many ‘flow on’ jobs which use that industry as their economic base.  Hazelwood power station is very likely to find its operations scaled back.

According to ‘The Age’ Greg Combet has announced that the LaTrobe Valley alone will receive “a $200 million package over seven years for ''strongly affected'' regions, with help in training and diversifying.”   But in the same article Electrical Trades Union state secretary Dean Mighell is quoted as arguing more needs to be done to create local jobs. This begs the question of whether government ought ‘get its hands dirty’ with more direct industry policies – reforging the ‘economic base’ in the LaTrobe valley and other affected regions – which would ‘flow on’ in maintaining thousands of other ‘peripheral’ jobs. 

(See: http://www.theage.com.au/environment/climate-change/brown-coal-cloud-of-doubt-hangs-over-latrobe-valley-20110710-1h8zg.html#ixzz1RnEZ7q9D)

And in another concern, the Financial Review has reported an impending $4 billion ‘budget toll’ over the next four years in order to pay for industry and household compensation.  Labor is flagging its intent to make ‘savings’ in order to reach its projected surplus for 2013, but had already been struggling to find savings for 2011-12 without impacting on crucial programs and initiatives.

(See:http://www.financialreview.com.au/p/national/gillard_carbon_blueprint_gfV7V7WexwrES8lrl47yaI )

Between now and the next Federal Budget, therefore, progressive forces across the factional divide in Labor need to build momentum behind an alternative response for the government to this shortfall.  Importantly, Labor has the choice of revising its party platform in December to open the way for a moderately increased tax take as a proportion of GDP.

 Such a decision could be followed with modest tax reform to the extent necessary to avoid austerity, or to the extent necessary to fund a bold package of initiatives addressing what is seen in this country as a ‘cost of living crisis.’  This would also attract the charge of ‘redistribution’, but there is the potential that by improving the circumstances of average Australian families this is a debate Labor could well win.  Indeed, that could properly be the object of an article in of itself.  

 A ‘National Disability Insurance Scheme’ is another potential choice for Labor in seizing the initiative and delivering on a reform agenda – but would also need to be backed by tax reform and increased revenue.  That would be another reform Abbott would find very difficult to undo.

 One option in this context could be a 1 per cent increase in Company Tax – which would still leave Australia way short of Company Tax rates in the United States.  Another option could be a modest reduction in dividend imputation to 75%.

 In conclusion, Labor has a long way to go in convincing voters of the merits of this carbon tax package.   What is interesting is that Gillard’s carbon tax package is very similar in its dimensions to the earlier proposed Emissions Trading Scheme.  But what is notably different is the word ‘tax’.

 The fear campaign spread in the right-populist monopoly media has found its mark. And many Australians are angry that Gillard is exceeding her mandate in this way – despite the fact she has had no choice in the context of minority government.  

 This will only change once the package is implemented and most people see for themselves they are no worse off.   Most Australians will only pay with the costs of structural adjustment being passed on over the very long term. We talk here of large-scale future investment in renewable energy.  But the same could be said with Abbott’s ‘direct action’ – where the costs of industry adjustment could be paid for with direct subsidies from tax-payers: paid for via sweeping austerity.

 And yet we all should be willing to make small sacrifices in fighting climate change – for the sake of our planet, and for the sake of our children. If all comparable nations also refused to take action the effect would be to cripple the global movement to address this crisis.

But by putting implementation off until mid-next year Labor is giving time for fear and anger to fester. All those political, environmental, industrial and social movements which support the policy therefore need to begin a mobilisation immediately if the situation is to be saved.  An information campaign involving all these movements needs to begin, even including advertisements and letter-boxing – as surely as if the election were this year.

Which way forwards in response to climate change?

nb: the article focuses primarily on the Australian context: but the arguments and issues are relevant for a truly global audience...

By Tristan Ewins

Towards the conclusion of 2009 perhaps one of the most significant events of that decade was the failure of the Copenhagen conference on climate change to authorise a comprehensive and binding response to the climate crisis.

Given the virtually universal consensus across the entire body of global scientific opinion, with regards to the reality of human-induced climate change, resistance to action must be seen as being harder and harder to justify.

Apart from the threat of rising sea levels, other effects of continued global warming could include damage to eco-systems and biodiversity. Acidification of oceans may result in extinction of many species - with the consequences of the disruption to the food chain ultimately flowing to humans. And with extremes of weather, life for many would become more uncomfortable.

But while some from the conservative Opposition in Australia saw the failure of Copenhagen as a vindication of sorts, the potential consequences of this failure are such that none should be seeking to milk these developments for opportunistic political gain.

In Australia, with regards to the environment, the Rudd Labor is besieged on both sides.
Bipartisan support between the government and the Coalition Opposition for an Emissions Trading Scheme (ETS) in Australia has collapsed after the relatively liberal Opposition Leader, Malcolm Turnbull, was usurped by arch-Conservative, Tony Abbott.

Now, while the Australian Greens deplore the government’s target to reduce greenhouse emissions to somewhere between 5 per cent and 25 per cent of 2000 levels saying it is vague and insufficient, the conservative Coalition is generating fear about what their leader Tony Abbott derides as “Labor’s great big tax”.

But what is the proposed ETS anyway?

“In a nutshell”, the Emissions Trading Scheme advocated by the Australian Labor government comprises a “cap and trade” system whereby polluters are provided with a limit on greenhouse emissions. After this “cap”, polluters need to invest in emissions permits if they are to continue such activity. A market is effectively created: usually whereby polluters must buy permits from economic actors whose activity is not so intensive in carbon emissions.

Importantly, Labor claims the ETS does not comprise a tax in the commonly-accepted sense of the word. For the government this is important: as it is official Labor policy not to increase tax as a proportion of Gross Domestic Product (GDP).

Given the need for investment in social services, welfare and infrastructure, critics may well point to the short-
sightedness of this policy. But advocates of the Labor ETS might believe it is a way to potentially “have one’s cake and eat it too”. Although after corporate compensation - and compensation for those on low and middle incomes - there is not much left over.

Ultimately, though, the proposed ETS would still comprise a system of “sticks and carrots”: impositions upon business and consumers to pressure them into changing their habits when it comes to investments and the purchasing of goods and services.

Achieving real change obviously cannot come without a cost. The question is who pays for reform and how.
Conservative Opposition leader, Tony Abbott has been quick to deride Labor’s ETS plans and the financial pain which will follow for many Australians. He has claimed that 50 per cent of middle class households will be worse off. In contrast, the government is claiming that 2.9 million low income Australian households will actually be better off as a consequence of the built-in compensatory mechanisms.

I will address this in greater detail further on in this essay.

Instead of an ETS or carbon tax Abbott has been spruiking the benefits of a more “direct” approach to reducing carbon emissions. The question hanging over such proclamations, however, is the same. Again: change cannot come about without cost: and someone will have to pay for “direct” change: or else perhaps there will be no change at all …

That said: there is a variation on the theme of “direct action” on climate that may have merit: although the author seriously doubts this approach would appeal to the Conservatives and neo-liberals - with their fetish for ever smaller government “no matter what”. I will also consider this later.

Into this “mix” we need to consider the human impact of action on climate change.

For all parties involved there was a concern with any ETS that it could have a negative impact on industry and jobs. As a consequence of cheap coal, benefits have historically “flowed on” to other export industries, and import-competing industries. With an increased cost for power, though, the reverse impact of this would flow on through the entire economy.

In response to this and other issues surrounding the competitiveness of Australian industry, the Australian government has included as part of the proposed ETS an “Emissions-Intensive Trade-Exposed Industry Assistance” (EITEIA) package.

The aims of this scheme are manyfold.

To begin with, the scheme aims to reduce the risks of investors simply relocating offshore to countries with more “carbon friendly” conditions. If the only impact of any ETS is that carbon intensive industries simply move offshore then obviously nothing is achieved.

Second, the program is aimed at enterprises which are “trade exposed”.

One test of this is if such enterprises “[demonstrate a] lack of capacity to pass through costs due to the potential for international competition.”

Under Malcolm Turnbull’s leadership, the Coalition had also secured through negotiation broader compensation for industries affected by the proposed ETS. Among these were coal-fired electricity generation and agriculture.

There are many who feel compensation goes too far. In March 2009 the Australian movement Friends of the Earth (FOE) condemned the inclusion of the EITEIA in the Carbon Pollution Reduction Scheme (CPRS) package.

FOE’s aim for the energy industry of “100 per cent renewable [energy] by 2020" seems especially ambitious. Nonetheless, the massive aid commitment for coal-fired energy providers - in the face of blackmail by those interests threatening continuity in energy supply - seems misplaced.

Properly such threats ought to have been stared down. Should these threats have come to fruition then, as Ken Davidson argues - in the case of Victoria: “the State Government has emergency powers that allow it to take over and run the assets.”

But worthy of closer consideration is FOE’s demand for “sector-by-sector transition plans for affected workers and communities”.

What, then, is the way forward?

Proposals for “transition plans” are refreshing, comprising a call for more direct government intervention than usually acceptable under the neo-liberal consensus that one way or the other everything must be “left to markets”. Indeed: the psychology behind such thinking - including the stigma associated with tax reform - is partly the reason why the ETS has been promoted without greater consideration of alternatives such as a
simpler carbon tax.

Active industry policy must be applied to create new jobs (especially in affected regions), maintain good incomes and income support (including during the transition process), while also supporting re-skilling - at no expense to affected workers.

At this point, therefore, it might also be appropriate to consider another interpretation of “direct” action on climate change.

Instead of only “sticks and carrots” being applied to “prod” markets into reform, the alternative could be massive and direct public investment to renewable energy and sustainability.


In the Australian e-journal On Line Opinion, social commentator Leigh Ewbank proclaimed that: “A new nation-building project on the scale of the Snowy Mountains Scheme is needed.” Here, Ewbank was correct in observing that “our windy southern coast; our vast deserts; and our rich geothermal resources, are untapped”. Utilising these natural assets - with public investment in sustainable energy infrastructure - could be instrumental in the creation of “a renewable electricity grid”.

This program could also include micro-energy reforms: making the inclusion of solar panels and micro wind turbines compulsory for new constructions - supported with generous government subsidy for those on lower incomes. Also integral in this process could be extensive “Green building” regulations, so our homes and workplaces are “resource-efficient throughout a building's life-cycle”.

These and other measures could gradually ween Australia away from dependence upon coal between now and 2020.

Importantly, tax, social wage and welfare reform would have to be enacted to prevent the costs of such change “flowing on” to more vulnerable groups and individuals.

Progressive tax reform - combined with a progressively structured ETS (made possible through compensatory payments) - is also critical given that the debt from massive public investment in renewables would need to be serviced in as fair a manner as is possible.

If the Australian government does go ahead with some form of ETS, it must be so structured as to have a more progressive impact on wealth and income distribution, and access to necessities including energy.

Towards the end of 2009, Lindsay Tanner, the Australian Finance Minister, affirmed that “low-income households will be hit around $420 annually under the scheme but will be compensated on average by $610 per year”.

The question here is why the government is not using this opportunity to do more in the interests of distributive justice.

Given that the broader tax system in Australia is in need of radical reform for purposes of distributive justice, an ETS - while not a tax - could be levied at a higher rate. By this we infer regulation ensuring a higher rate for carbon permits issued by the Federal government - and also central regulation of permit values thereafter. This is an alternative to the wild speculation some suppose might otherwise follow with the scheme’s implementation.

If accompanied by greater compensation for those on low and middle incomes (especially lower incomes), though, such reform (as advocated in this article) would comprise a “step forward” for fairness.

As Ken Davidson, writing for The Age, has noted also, if emissions permits are too cheap then there will be no incentive for corporations to make “higher cost investments” anyway.

While Davidson rejects the prospect of an ETS altogether - and a carbon tax would be more simple and potentially less volatile - there are ways of improving the proposed system.
In the wake of Copenhagen international action is necessary

The failure of nations to arrive at a legally binding framework (via an international treaty) for emissions reduction at the Copenhagen conference shows a disturbing lack of resolve and good faith among what some call “the global community”.

Among the most pertinent of issues was the failure of the developed world to provide the necessary compensation for poorer nations to continue development in an environmentally and socially sustainable fashion. Writing for the Sydney Morning Herald, Andrew Hewitt lamented that: “The promised $US100 billion a year by 2020, aimed at helping poor countries reduce their emissions and adapt to a changing climate, is less than half the amount needed.”

The quest to eradicate poverty, here, need not be abandoned as the price of sustainability. Technology transfer is of central importance, as is funding tied to the construction of sustainable infrastructure in developing countries.

In the same spirit, international co-operation in key areas of research, such as renewable energy, is critical. The world would do better pooling its research efforts rather than individual research units competing against each other - and quite likely not sharing their progress and their breakthroughs.

Here - in the wake of Copenhagen’s failure - there is nevertheless still the option of Australia “leading by example”. This applies to other countries in the developed world also: including the United States.

A good start for Australia would be a radical expansion of foreign aid: with Australian contributions being raised from approximately 0.32 per cent of GDP (2009 figures) to 1 per cent: significantly beyond the “UN benchmark” of 0.7 per cent.

For Australia’s part, Hewitt was also correct in observing: “We must … contribute our fair share of climate finance, based on our historical responsibility for emissions and our capacity to pay.”

This additional expansion could be tied exclusively to the development of environmentally sustainable infrastructure and industry, with funds devoted to Foreign Aid from Australia alone rising to significantly over AU$10 billion annually.

With Labor in power in Australia we have the right to expect better. But accountability of governments is only ever secured at the cost of eternal vigilance on the part of citizens. We must hold Labor accountable now, for the stakes are too high and the costs of failure too great.


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Also:  Leigh Ewbank's material was cited in this article: a plea for massive public investment in renewable energy infrastructure.    Leigh's blog focuses on environmentaland social issues - and can be found here:      Meanwhile: his contributions to On Line Opinion can be found here.

A Revolution in the Transport Economy

If you ask most Australians today what worries them most, chances are they will respond that the ever-spiralling cost-of-living is of prime concern. The rising cost of petrol, in particular, is one factor which flows on through the transport sector to impact upon the broader economy.

This tendency - felt worldwide - is worsened by tension in the Persian Gulf, and looming confrontation with Iran. In addition, there is the impact of rapidly developing economies like China and their insatiable thirst for oil.

Many commentators believe if we have not already reached “Peak Oil” we will do so soon. And as demand increasingly outstrips supply the crisis is set to worsen.

The aim of this paper is to consider the transport sector crisis: from the need for green and efficient alternatives, to the imperative of providing transitional transport supply infrastructure - as part of a “transport revolution”.

Transport economy in crisis

Considering the skyrocketing price of oil, it might reasonably be supposed that there is already sufficient incentive for governments worldwide to take decisive action and restructure their transport economies in favour of cost-effective and renewable solutions.

The Emissions Trading Scheme proposed by the Rudd Government - as applied to petrol - looked set to increase prices by as much as 10c a litre.

In response to criticism, the government signalled that it would be cutting petrol excise for three years so as to make the overall effect revenue neutral.

There is still, though, a strong case to transition beyond the kind of oil dependence we now have. Both for the environment and for sheer efficiency there is a case to be put for the public transport alternative - and for investment in electric and hybrid car technology.

Debate is now crucial: to spur Australian governments on to embrace reform and to restructure transport economies in favour of cost-effective, sustainable and renewable solutions.

The case for public transport

Public transport is a far more energy-efficient and is a less carbon-intensive alternative to petrol-driven vehicles. The Public Transport Users Association (PTUA) has surveyed the energy efficiency of public versus private transport. To break the figures down: an average petrol-run car will cost about 3.7 mega-joules (MJ) per passenger-kilometre (pkm). An electric train, however, operates at a rate of between 0.04 and 0.18 MJ pkm, making train transport as much as 92 times more energy efficient.

From an energy-conscious and environmental perspective the imperative of prioritising increased public transport patronage and improving infrastructure and services is undeniable.

But how affordable is public transport - considering the example of Melbourne - in the face of the current fare system?

Drawing on RACV figures, meanwhile, the PTUA compares the cost of running a used car to that of everyday public transport use: "… even used cars, already fully paid for and ‘running on the smell of an oily rag’ can cost over a thousand dollars more in annual registration and fuel than the most expensive Yearly Metcard." Here "annual running costs" are "$2,918".

In comparison, the PTUA has noted that (in regards to the Victorian example): "Metlink yearly tickets are $1,117 for zone 1, $748 for zone 2, or $1,722 for zones 1+2."

Despite the competitive cost of public transport, though, many still choose to use their cars as a matter of convenience. And also the above figures may appear deceptive if one considers that car transport can be relatively cost-efficient in comparison to public transport in the case of short trips. It is critical that such disincentives to the use of public transport are addressed.

As Royce Millar and Simon Mann have argued:

“Just one in 20 outer Melbournians take public transport to work. In the relatively transport-rich inner city, the figure is one in five. Citywide, just 9% of all trips are taken by bus, train or tram.”

Public transport infrastructure and rolling stock in Australia need to be upgraded to accommodate greater patronage, and to provide excellent and convenient service (including greater frequency) at competitive prices to all citizens.

The PTUA is launching a campaign on improving the regularity of public transport services to provide convenience for consumers. The campaign has been named Every 10 Minutes to Everywhere.

There is a particularly urgent need to expand transport networks into the urban fringe of major cities where services are often especially poor.

Indeed, compared internationally, there is much scope to improve the affordability of public transport in Australia’s cities. The PTUA notes, for instance, that the Canadian city of Vancouver enjoys fares of around half the cost of Melbourne's.

To conclude: the need to revolutionise the transport economy - to invest in public transport and rail freight - is undeniable. So also is the need for root and branch reform of Australian public transport fee structures.

Such are the environmental, equity and fiscal imperatives we face.

Transport from a different perspective: hybrid and electric car technology

Alongside the imperative to revolutionise the provision of public transport, there is the question of hybrid and electric car technology. Environmental and cost of living pressures are bringing to a head the need for such innovation.

Wikipedia notes that Plug-in Hybrid Electrical Vehicles (PHEV) are currently capable of about 100km a day on battery power alone - after which the car reverts to a petroleum motor. The working of the petroleum motor thereafter assists in recharging the vehicle battery. Notably 100km a day is more than most people require in their daily usage. But the hybrid system provides flexibility on long trips - when it is needed.

Research is ongoing, and Wikipedia also notes that:

“Advanced battery technology is under development, promising greater energy densities by both mass and volume, and battery life expectancy is expected to increase.”

Some researchers, however, feel that more work should be put into developing more efficient and “green” alternatives like “fuel-cell cars that can use sustainable sourced fuels, such as hydrogen”. Unfortunately, though, many suppose that hydrogen fuel cells will not provide a marketable alternative before 2025.

If PHEV vehicles are the best option available over the next 20 or so years, then the challenge is to make the technology affordable. Indeed, it is a basic “cost of living” issue essential to the transport framework of the entire economy.

One significant challenge here might be subsidisation and even socialisation of petrol supply during the transition period. The aim, in this instance, is to make private transport affordable for those on lower-incomes - who may not have the immediate means to “upgrade” to the new technology.

As part of this process, there is a key role for Australian government: to partner with other governments and automobile companies in furthering PHEV and hydrogen fuel cell research and development to make it affordable for all.

Other roles for government may also include driving the adoption of micro-renewable energy solutions - to complement the shift to a “green private transport economy”.

A revolution in transport infrastructure, including improved public transport, and the adoption of hybrid and electric vehicle technology - can provide better value and efficiency even while reducing greenhouse gas emissions.

We need to speak out and ensure our voices are heard so that decisive action is taken - now.

by Tristan Ewins