Big Build boost but service starved in expansive state budget

The last fortnight has felt like a mini election campaign with all major political groupings releasing spending plans. Not least on public transport projects. 

Different priorities

We saw several announcements from the Government. Notable examples include a. $20m for a 3 year low emission bus trial, b. $2.2b to start Suburban Rail Loop Stage 1, c. More parking and new bus routes at Tarneit Station and, biggest of all, last Friday (d) airport rail via Metro Tunnel and faster Geelong trains. Sandwiched in between these and an announcement on easing COVID restrictions was a new charge on electric vehicles. Pre-budget releases like these from Australian governments are now so common that the budget itself, despite being kept under tight security, is almost an anti-climax. 

I discussed The Greens' Green New Deal plans here. It's a big boost for train and tram services, but, possibly reflecting the party's increasingly inner-suburban skew, does nothing for buses. Walking, unlike cycling, also gets neglected. 

Then last week the opposition Liberal Party released its transport hopes for the budget. Their theme is cost-effective smaller projects for public transport, including rail line duplications and small tram extensions. Plus, what has become an article of faith, reviving the (less cost-effective) East-West road link mega-project. I presented more detail on Sunday. Since then the Coalition released a list of 25 road/rail level crossings they'd like see removed. 

Overall, Labor is into big public transport infrastructure, big road infrastructure but not service upgrades. The coalition favours small public transport infrastructure, big road infrastructure but not service upgrades. The Greens like trains and trams (including service upgrades) plus bikes. But hardly anyone at Spring Street considers buses or walking worth making a fuss over. Which is regrettable due to the highly cost-effective and job-creating nature of improvements in these areas. 

Broader context

One can't ignore the bigger context of this budget. There's more uncertainty in this one than previous recent years due to COVID-19. At both federal and state levels the biggest economic shock since the Great Depression has resulted in huge public borrowing and spending to keep people in jobs. 

Even before that Victoria was borrowing and spending big on infrastructure, with low interest rates making the servicing of debt appear affordable and Melbourne's rapid population growth making big projects appear forward thinking. 

The high point of this thinking was before the 2018 election when the Labor state government announced the Suburban Rail Loop. This was not in isolation; public sentiment in favour of big projects had been building in the years prior. The Coalition in 2010 successfully painted itself as being competent economic managers who could run services better than Labor. However it was seen as being out of step as interest in big projects revived and interest rates were low. 

The Bracks government acted too slowly with regards to improved train timetables and reliability in 2005-7. That left an intractable problem for successor premier John Brumby (who, as treasurer under Bracks, might have resisted some spending required to make improvements happen). The 2010 election was lost before Labor's actions had time to give results. As incoming Liberal premier, Ted Baillieu was slow on infrastructure, commissioning studies but building little. Sentiment had changed when Denis Napthine took over but projects proposed were too late to be credible, let alone get built. 

Labor and Daniel Andrews did promise infrastructure and were sufficiently credible to win 2014. They, to quote their own words, 'did not waste a single moment' and built, built, built. That was rewarded by a big victory in 2018. 

Even though we have seen the results of many level crossing removals, sentiment may again be shifting, this time away from the big projects. Expectations of population growth have fallen, some expert opinion (eg Grattan Institute) is hostile, the Liberal Opposition is rediscovering the value of smaller projects and the state's mounting debt (despite low interest rates) is once again a concern. 

Still, that's for future years; this government is too committed to its promises to alter them. And, besides, only a small fraction of the funding of projects like the SRL are needed in the early years and interest rates are (currently) low enough to make large borrowings serviceable. While so many peoples' jobs remain uncertain, calls to repay (as opposed to merely service) debt won't be seen to be of immediate importance. 

Last year's budget

My write-up on 2019's state budget is here. Unlike the splashy pre-election 2018 budget it was a  dull 'business as usual' document. There was a continuation of existing capital works program and new trains and trams. Plus planning for some large projects including the Suburban Rail Loop, Western Rail Plan and Airport Rail. Not to mention the continuation of the large level crossing removal program. 

Minor patronage rises were forecast. But, as has become normal in recent years, there was very little for additional services. 2019 service growth initiatives included a handful of peri-urban buses, some of which even in late 2020 haven't started yet. 

The world of 2018 is very different to today's, with COVID-19 basically halting transport usage and  much economic activity, particularly in Victoria. We are only just getting out of this. And it remains to be seen whether some changes and patterns that established themselves during the pandemic will prove enduring. 

We do however know that the economic shock has goaded governments of all stripes to introduce expansionary budgets. Instead of aspiring to surpluses, deficits to pump billions into the economy and preserve jobs have become the rule. Low interest rates have made such borrowing more respectable than at previous times such as during our early 1990s recession. So that is what you will see in today's state budget - massive borrowing and big spending, including on public transport projects. 

Public transport in today's budget

The centrepiece is funding for the much anticipated airport rail. Even though most would only fly a couple of times a year, airport rail gets people taking like no other rail project. Many crazy schemes have been proposed and then dashed over the decades. 

We could have chosen a private consortium to build a fast dedicated line but instead opted for a standard Metro service feeding into the Metro Tunnel and through to the south-east. When you look at what gets the most use in other cities it's a good choice, with the travel time savings of the private line being less significant than the improved connectivity of the Metro line. Longer term though, capacity may be an issue, particularly with continued growth of and future electrification to Melton. The line, which includes both state and federal funding, is expected to open in 2029. 

Geelong was another part of that announcement. Geelong's V/Line trains previously went via Werribee and Newport for something like 150 years. Then they were switched to go via the Regional Rail Link and Sunshine, making Werribee purely a Metro terminus station. Patronage at Wyndham Vale and Tarneit soon grew to such an extent that trains became crowded and unreliable. And there were still some large gaps in the timetable, including during peak times. Geelong Fast Rail aims to relieve pressure by running some Geelong trains via the RRL and some via the old Newport alignment, with extra track (they don't say whether it's one or two) added between Werribee and Laverton. This should allow more dedicated trains to run to Wyndham Vale, meeting demand there and at Tarneit. Again federal funding will contribute.  

A revenue measure has been a charge on the use of electric cars. This is akin to what South Australia has announced and what New South Wales is considering. This has angered (generally affluent) electric car advocates and their supporters in The Greens who suggest it sends the wrong price signals for those wishing to convert from fossil fuel to electric. However even after the tax electric cars will still be cheaper to drive. And it could be the first movement towards the sort of road use charges necessary for governments to preserve their revenue sources as the fuel tax base diminishes. 

It's essential not to lose sight of the fact that we already extensively use electric vehicles in the form of trains and trams. Encouraging a shift from driving to public transport makes our transport less carbon intensive to the extent that our electricity generation moves to clean sources and public transport vehicle occupancy is high. We've been lagging with buses but, as previously announced, there will be $20m for a trial of zero emission buses in Melbourne, pending a future more extensive roll-out.   

That's summarised the main pre-budget announcements as they apply to public transport. 

What about the rest? 

Read it all at: https://budget.vic.gov.au

A short cut to the budget papers is here 

On Twitter follow #vicbudget (or #vicbudget2020 )

The budget papers most important for public transport are:

* Paper 2 (Strategy and Outlook) Pages 83 - 104 for State Capital Program

* Paper 3 (Service Delivery) Pages 127 - 136, 337 - 360 and 422 - 424.

* Paper 4 (Statement of Finances) Pages 124 - 130

Salient points from Paper 3 (Service Delivery)

* Bus service improvements. $1.3m in 2020/21, ramping up to $6.3m the following year and slightly more in years after that. This is tied to asset initiatives ($2.8m 2020/21 and $1.4m 2021/22) to buy buses required to run the increased services. The most important is network reform and service upgrades on the Mornington Peninsula. A Mernda - Craigieburn bus is also mentioned, with accelerated delivery. Some outer suburban secondary colleges will get improved school special services. 

* $3m this financial year on a tram corridor strategy. This will consider network reform to optimise the use of both existing and next generation trams. Currently we have cases of high floor trams operating on routes with many accessible stops and vice versa. One would hope that a review would, amongst other things, maximise network accessibility with what we currently have. 

* $5.5m on Caulfield Rationalisation. This will segregate the Frankston and Dandenong lines with claimed speed and timetabling benefits. 

* $4m for zero emissions bus fleet, with $1m spent in this financial year. Added to this is $16m in 2021/22 under the asset initiative. 

* The West Gate Punt service will be continued. 

* $438m is recorded as spent on public transport's coronavirus response. This was basically to keep the system running (noting reduced fare revenue) and increase cleaning. 

* $2.8m in first year on ticketing strategy. 

* Expenditures for timetable planning - between $0.5 and 1m each year. Mainly for rail. 

* $1m on public transport network safety and resilience. This is associated with $34m over four years for the asset component. This is about upgrading substations in bushfire prone outer parts of the rail network. 

* $231.4m will be spent over four years for the car parks at stations initiative. The biggest proportion ($100.9m) will be spent in a 2021/2022 pre-election blitz. This is listed as an asset initiative under train services. 

* $276.5m over four years will go to the Dandenong rail corridor. This will support high capacity signalling, the High Capacity Metro Trains and speed things at Dandenong. 

* 100 Next Generation Trams will be ordered in the next four years, costing just under $1.5b. We don't know what year the expenditure for this will be included in.   

* Suburban Rail Loop includes the previously announced $2.2b in the next four years for preparatory works including project work, initial land assembly and relocation of utilities.  

* Page 339 says how much we spent on running various train, tram and bus services. 

* Outputs (from Page 342) describe expenditure and patronage. Of note is the large falls in patronage due to the coronavirus. That started to hit usage from about March 2020. The 2020/21 targets assume a standard year, ie exclude the coronavirus impact that we've already had this financial year. 

* Page 350 includes a target of just two level access tram stops to be upgraded. 

Salient points from Paper 4 (Statement of Finances)

* Page 17 has key economic assumptions, including an economic rebound, recovering population growth and a fall in unemployment post-coronavirus. 

* Contingent liabilities. Remember Donald Rumsfield going on about 'known knowns, and unknown knowns etc'? Budgets are asked to make projections for things that may or may not happen. Page 188 lists some. Some are associated with transport operation and projects. These include land acquisition, partnership agreements (ie operator franchises), a claim re patronage at Southern Cross Station and issues with the Metro Tunnel construction. 

* Page 212 lists all the major government infrastructure projects on the go. It's worth reading this to refresh one's memory. Those related to public transport include: 

• 75 level crossing removals by 2025;

• Additional VLocity trains;

• Caulfield to Dandenong conventional signalling and power infrastructure upgrade;

• City Loop fire and safety upgrade (Stage 2) and intruder alarm;

• Courts case management system;

• Cranbourne line duplication;

• Cranbourne-Pakenham and Sunbury line upgrade;

• Frankston line stabling;

• High Capacity Metro Trains Project;

• Hurstbridge Line upgrade – Stage 2;

• Melbourne Airport Rail;

• Metro Tunnel;

• More E-Class trams and infrastructure;

• Murray Basin Rail Project;

• New trains for Sunbury;

• Regional Rail Revival;

• Shepparton Corridor Upgrade – Stage 2;

• Suburban Rail Loop;

• Tram procurement and supporting infrastructure;

• Waurn Ponds Track Duplication – Stage 2;

• Western Rail Plan;

Summary

Like the 2018 budget, this has been a big budget for a small number of large public transport infrastructure projects. This has been helped by federal funding. These projects will be city-shaping in their impact. In the case of airport rail it delivers on something that has been talked about for years, but, until now, not funded. The zero emission bus trials could be the start of a long-term transition towards a low carbon future. While it might be imperfect, the charging of electric car usage may be a tentative step towards a workable post-fuel pricing mechanism. The state government need some sound revenue sources to fund what it does and, given the negative consequences of driving regardless of propulsion, there could be many worse than  taxing cars. 

Again overlooked has been services, with only minor (but still welcome) bus initiatives on the Mornington Peninsula and at Craigieburn. Melbourne passengers will continue to wait up to 30 minutes for evening trains at times where Sydney passengers have only 15 minute waits. Many neighbourhoods will remain without 7 day bus services, or even, in some cases, on Saturday afternoons. The new tram order is good but stops need to support them to provide genuinely accessible service. The pace here, too, has been very slow. Meanwhile funds seem limitless for station car parking, despite the very high per user cost and the opportunity for higher value land uses (that return profits rather than costs) such as housing near stations. 

Right now cost-effectiveness may not be number one criterion of whether a transport project gets approval. But as debts mount and finances tighten then circumstances may change. Therefore, despite these being trying times for advocates, they should continue their push for high-return local infrastructure and service based upgrades to provide a truly useful, comprehensive and connected network.