SEQ has expensive public transport due to low density and costly trains

Posted on January 8, 2014 by Gene Tunny

While hard on commuters, the recent Translink fare hike (see Brisbane Times coverage) still leaves South-East Queensland with a heavily subsidised public transport system, which it will continue to have given a relatively low population density and historically poor choices of public transport investments. For instance, although commuters favour trains because they are viewed as more comfortable and reliable than buses, they are much more expensive to provide than buses, except in areas with very high population densities. While using trains for public transport might make sense in London, New York or Paris, there are big questions around their viability in less dense Australian cities. See, for example, this US study which provides an excellent literature review regarding urban rail transit investments in the US:

Urban Densities and Transit: A Multi-dimensional Perspective

My previous thoughts on public transport can be found in several posts, including:

Govt should explore transport demand management options before committing to costly infrastructure

SEQ’s extensive but costly public transport system requires thorough review

Also see Brad Rogers’s guest post which links heritage protection to low, inefficient population densities in Brisbane’s inner city:

Guest post – Old Queenslanders in a New City

Posted in Brisbane, Transport | Tagged , , , , , , , , | 2 Comments

Qld Tennis Centre precinct a missed opportunity

Posted on January 3, 2014 by Gene Tunny

Tennyson

At the Brisbane International Tennis tournament the other day, my friends and I were confronted with very high prices, such as $9.50 for a Corona and $7 for a fruit salad. In part, the high prices reflect the local monopoly that food vendors have at the Tennis Centre due to poor planning.

Unfortunately, the redevelopment of the old Tennyson power station site, into a precinct containing the Queensland Tennis Centre, residential apartments, and a public park by the river, failed to make good use of this prime riverfront site. There is only one café in the precinct, Buzz Café, which could offer competition to food and drink vendors at the Tennis Centre.

But the riverfront site is superb, and the opportunity was missed to allow commercial development right on the river, particularly cafes and restaurants, which would have provided jobs and incomes, as well as alternative food and drink options for people visiting the precinct. This could have been done while still providing an area for children to play.

Sure, one objection might be that we shouldn’t develop so close to the river due to the risk of flooding, but floods aren’t really that frequent, only once every generation or so, and businesses should be able to decide for themselves whether they can absorb the risk and higher insurance premiums.

The Tennyson power station re-development appears representative of a major failing of town planning in Brisbane – there is very little development on the river for a river city. We need to make better use of the Tennis Centre precinct site. Right now the community isn’t getting the highest value it could out of the site.

There is a similar failure to properly develop prime recreational areas in local government areas throughout Queensland, particularly those with popular beaches. The development of restaurants and cafes with water views is very rare in Queensland, even though we have many beautiful beaches. For example, at Mooloolaba, the car park is on the edge of the beach and the restaurants are so far back you cannot see the beach. Cars don’t need a view of the water, but people appreciate one.

Councils consistently state they want to know how to generate economic activity and jobs in their areas. A good start for many would be to allow greater development of areas that provide views of the water.

Acknowledgment: Credit to Brad Rogers for the initial idea behind this post and several of the points made in it.

 

Posted in Brisbane | Tagged , , , , , , , , | 4 Comments

Additional maps on average incomes in Qld

Posted on December 24, 2013 by Gene Tunny

Average wage and salary incomes of residents of mining regions in Queensland rival those of residents in the Western suburbs of Brisbane, according to the ABS’s new small area income data (see maps below for the whole of Queensland and SEQ).

Qld_map  SEQ closeup:

SEQ_closeupAs would be expected, average incomes on the Gold and Sunshine Coasts are significantly lower than average incomes in Brisbane, which has a higher proportion of professional and managerial workers in its labour force.

Posted in Brisbane, Gold Coast, Labour market | Tagged , , , , , , , , | 5 Comments

West is best – high income earners love Brisbane’s leafy western suburbs

Posted on December 23, 2013 by Gene Tunny

I’ve mapped the ABS’s latest small area income data for Brisbane below, and it shows, unsurprisingly, the leafy western suburbs remain popular with high income earners. (For greater clarity, you can right click and open the map in a new window.) Unfortunately, as anyone who travels on Moggill Road regularly knows, the road infrastructure hasn’t kept up with population growth in these popular suburbs and congestion in peak times is awful. That roundabout at Moggill and Brookfield Roads at Kenmore must be the worst in Brisbane and requires a total redesign.

Average_incomesPete Faulkner has posted on the new ABS data from a Far North perspective:

Cassowary Coast almost stood still 2005-2011; but Cairns did well

I’ve previously posted on:

Where do Queensland’s super rich live?

Posted in Brisbane, Labour market, Transport | Tagged , , , | 3 Comments

Qld Govt leaves room to boost spending in election budget next year

Posted on December 19, 2013 by Gene Tunny

The Queensland Government’s Mid Year Fiscal and Economic Review released yesterday didn’t contain many surprises, but left me with the thought the Government will have plenty of room to boost spending in next year’s Budget, in preparation for an election in late 2014.

Speculation about a poll in early 2014 has now passed, as there appears to be a recognition on George St – more-or-less acknowledged in the Mid Year Outlook – that the Government will need to work hard to convince the public of the need for asset sales to repair the Budget. The Government is giving itself enough time to mount the case for sales, which, all things considered, should be easy to do, given the need to fix the budget and the logical arguments in favour of private ownership (see e.g. my post Productivity Commission says no rationale for State ownership of Energex and Ergon).

I expect the Government will have room to boost spending in next year’s Budget for a couple of reasons. Current budgeted expenditure growth over the forward estimates is very low (see Chart 7 from the Review that I’ve copied and pasted below), and the gross state product (GSP) growth forecast of 3% in 2014-15 is pretty conservative and I expect will be revised upwards in next year’s Budget, boosting the revenue the Government has to spend. As I’ve discussed previously, there are positive signs appearing for the Queensland economy (see e.g. Reasons to be optimistic Qld will cope with shock from mining investment decline).

expenses

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Deloitte forecasts huge drop in resources sector construction jobs

Posted on December 17, 2013 by Gene Tunny

I noticed the Mackay Daily Mercury (Investment drought to kill resources-boom building jobs) has picked up an interesting new report from the Australian Workplace and Productivity Agency: Resources Sector Skills Needs 2013. The report contains some interesting projections from Deloitte of employment levels in the resources sector in both construction and operational areas, which I’ve charted below. As widely expected, employment in resources sector construction will fall, but the scale of the projected fall may surprise some. I don’t expect this will result in a surge in unemployment in a few years time, as many of the construction workers in the resources sector are highly skilled and mobile, and they should find other work on projects across Australia.

construction

mining

oilandgas

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Signs are good, but Qld economy not roaring back yet

Posted on December 13, 2013 by Gene Tunny

Paul Syvret in the Courier-Mail today has a good summary of recent positive economic news for Queensland (Queensland economy recovers from GFC with new jobless low of 5.6pc), but I think some of the commentators he interviewed are getting a bit too excited too early. While the outlook is good, there appears little reason to think the Queensland economy has “roared back”, the view of Justin Smirk from Westpac. Unemployment remains significantly higher than its pre-financial crisis rate (first chart below), and through-the-year employment growth (e.g. how much employment grew between November 2012 and November 2013) remains much lower (second chart below). Once the economy really roars back we’ll see much higher employment growth rates, particularly if interstate migration to Queensland recovers as well.

urate

ttygrowth

 

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Gold Coast PTs should pay fees to use parks

Posted on December 11, 2013 by Gene Tunny

I noticed in the Gold Coast Bulletin that personal trainers on the GC are outraged the Council will start imposing an annual $200 fee for them to use parks, consistent with councils in Brisbane and elsewhere. It makes sense for councils to charge GC PTs who are gaining commercial advantage from using parks because they don’t have to pay rent for the space. Indeed, it might even make sense for the Council to charge even more than $200, depending on how much the PT uses the park.

Councils and other agencies should investigate whether there should be a wider application of user charges for parks, beaches and other recreation areas. These areas can be costly to maintain and have an opportunity cost as well, because the land could be otherwise sold and possibly developed. It is sound economics to recover some of these costs, where feasible, noting of course that some cost recovery may be uneconomic (i.e. it wouldn’t make sense to have someone collecting fees at every council park).

On user charges for recreation areas, my friend and fellow economist Boyd Blackwell, a former lifesaver who grew up on the Sunshine Coast, once courageously suggested Councils should consider charging for beach access because it would help pay for additional lifeguard services that people value. Here’s a link to the Radio National story from 2000:

Australians happy to pay beaches fees

If I recall correctly, this was based on a Conference of Economists paper I may have co-authored.

Posted in Gold Coast | Tagged , , , , , , , | 4 Comments

Budget repair challenge means Govt should reject calls to assist Holden and Qantas

Posted on December 10, 2013 by Gene Tunny

I spoke with Pat Hession on ABC North Queensland radio yesterday afternoon on the removal of the Commonwealth Government’s debt ceiling, effectively its “credit card limit” as Pat described it. I made the following points:

  • I’m disappointed the debt ceiling has been removed because it forced the Government to focus some attention on the medium and long-term consequences of its budgetary decisions.
  • The new requirement for reporting to Parliament every time debt increases by another $50 billion (see Upper House votes to scrap debt ceiling) will worry the Government a lot less than introducing a bill seeking an increase in the debt ceiling would have.
  • The risk is that we’ll end up tolerating perpetual deficits and an ever growing debt. This risk is even greater given the spending pressures arising from the ageing population and escalating health care costs.
  • The Government has done the right thing in setting up the Commission of Audit to review the full range of Commonwealth expenditures and it will need to respond quickly to any recommendations.
  • The Government will need to seriously cut into industry assistance (first, it should resist calls to assist Holden and Qantas) and middle class welfare.
  • It should also consider broadening the GST base. On this and other possible measures, see Grattan’s excellent report Balancing Budgets.
  • It will be difficult to turn the budget around in the short-term (1-2 years) because the expected deficits of several tens of billions of dollars are too large and cutting expenditure enough to get back to surplus would have adverse macroeconomic impacts. The budget repair task is a medium-term one and will take around 3-5 years at least.

My previous posts on the debt ceiling, the GST and industry assistance include:

Debt ceiling is an important constraint on government expenditure

Government has to rely on inefficient taxes to fix budget – GST reform needed

New Government should reject car industry begging

Posted in Budget, Industry policy, Tax | Tagged , , , , , | 4 Comments

Improving teacher quality key to lifting student performance

Posted on December 4, 2013 by Gene Tunny

The new OECD report showing Australia’s educational performance is slipping has gained a lot of media attention this morning (e.g. Queensland students lag behind national average in maths, science and literacy) and should inspire policy makers to push for further reforms to our education systems. The most important thing we can do to lift our educational performance is to improve the quality of our teachers, a point that has been consistently made over the years by former ANU Professor, now Canberra Labor MP Andrew Leigh, and which I’ve discussed in an earlier post:

Performance pay for teachers

Given the strong link between teacher quality and educational outcomes, I was pleased to read on Monday that the Queensland Government is considering teacher performance pay:

Teacher pay revamp long overdue

Better pay for the best teachers would go a long way to retaining the best ones in the education system rather than losing them to higher paying jobs elsewhere. Over the years I’ve consistently come across very capable, inspirational ex-teachers who unfortunately had to leave the profession to take up higher paying jobs in the education bureaucracy. Introducing performance pay for teachers would undoubtedly improve the overall quality of our teachers. While it would come at a cost, it would yield large benefits through improved educational outcomes, and there would be some offsetting savings from holding back pay rises from teachers who don’t meet the standard required for the next level of pay.

Posted in Education | Tagged , , , , , , | 2 Comments