Free buses and a just transition vs political reality
ECan votes for free bus trial as it debates a 24.5% rates hike. A sample of how brutal the political economy of a just transition will be when the tough decisions are made by councils
TLDR: ECan voted yesterday for a free bus trial as it considered a 24.5% rates hike. The farmer-councillor who voted against it asked why ratepayers should pay. What he meant was: why should suburban and rural council voters pay for things urban non-voters will use?
This illustrates the big problem in our current ‘just transition’ drive towards carbon neutrality. The toughest decisions are being pushed down to council level, where suburban, car-driving home owners dominate, and they don’t want to pay for buses and trains and apartments they’ll never use.
The central Government needs to engineer a just transition by taxing wealth and using it to pay for the infrastructure and services needed for much, much more walking, cycling, public transport and electric vehicle use. Without that, the poor will pay again, Rogernomics style, for a major economic transition through higher petrol, car, housing and public transport costs, or it just won’t happen at all.
Who will pay for a just transition?
Environment Canterbury’s (ECan) council voted yesterday for a two-year trial of making buses free to see if it will increase usage. (The Press) It’s a great theory. Make it cheaper to use buses and get cars off the road. But who should pay? Ratepayers generally through higher rates? Or taxpayers generally through higher debt and/or taxes? This is right at the heart of the debate about how a just transition to carbon neutrality can be engineered.
At the moment it’s very haphazard and the burden is falling on councils to ask suburban property-owning ratepayers, who mostly use cars, to pay for others to use buses and trains. The Government should be taking a more strategic approach on this, asking the question: how can society as a whole engineer the shift to electric vehicles and buses and trains in a way that means the cost doesn’t fall on poorer families who currently use cheap cars and petrol to run their lives?
The current model run by Treasury/NZTA/Ministry of Transport says the cost burden of public transport should fall on the marginal user: ie passengers. (We could have a debate about how car, ute and truck drivers are effectively subsidised by taxpayers at large who paid the capital cost of motorways, but that’s for another day.)
Ecan is trying to nudge away from that by asking ratepayers in general to pay via rates. That’s just not politically sustainable for councils, given the democratic deficits in councils. Essentially, Councils favour the interest of older, suburban and car-driving home owners, who vote at much higher rates than younger public transport using renters.
Just 41.7% of registered voters voted in the 2019 Council elections, with the turnout in Auckland and Wellington below 40%. We don’t know the age, occupation, income or whether voters were tenants or owners for the most recent council elections, but this 2016 study of Auckland Council voters found older Pakeha home owners were much more likely to vote than younger renters from Maori, Pacific and Asian communities.
That is also reflected in the age and occupations of the councillors. They are mostly over 50, an employer, a small business owner or retired, as shown in this Local Government NZ survey taken in April 2020 of mayors and councillors
Any attempts to make older suburban home owners who vote in council elections to pay for younger renters to use buses is doomed to fail when there is a rates revolt and the councillors who did the ‘right’ thing are voted out. It’s a very similar dynamic to the current debate around Māori wards.
Unfortunately, a lot of these decisions around climate change and housing are being made like this. The Government orders councils from on high to do the ‘right’ thing and then councillors subvert or reject or delay doing that thing because their democractic incentives are skewed.
We’ll see fights like this every day now. Unfortunately from a political optics point of view, ECan made it’s decision yesterday at the same time as it debated a 24.5% increase in rates.
Here’s a sample of how one opposing councillor, Peter Scott, described the vote.
“This was like a bomb ... we’re already in the middle of a long-term plan process,” Scott was reported as saying.
“I’m the South Canterbury councillor, but I’m surprised this was supported by all the Christchurch councillors when it’ll be such a huge burden on their ratepayers,” Scott said.
Scott is a mixed cropping farmer from Kerrytown, a rural community between Temuka and Timaru.
How does anyone with a sense of how council politics works think this will end? Get ready for a wave of rates revolts in the 2022 council elections, with the ‘just transition’ at the centre of the debate, along with a side plate of culture wars around Māori wards.
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