Prime Minister Malcolm Turnbull’s brain fart yesterday to build a High Speed Rail (HSR) line linking the East Coast capitals has already descended into a farce, with the Liberal MP leading the examination, John Alexander, basically admitting that the project is all about boosting property values in regional towns rather than delivering efficient and cost-effective transport, along with improving the nation’s productivity. From The SMH:
John Alexander, an advocate for fast rail since he entered Parliament in 2010, said high speed rail would “liberate” regional towns, potentially tripling property prices and relieving housing pressure in the capital cities. The train itself was almost an afterthought…
“The real purpose of high speed rail is to be able to develop regional areas… It would appear there’s a perfect storm of opportunity to liberate those cities through high speed rail”…
Mr Alexander suggested property in Goulburn now worth $200,000 could be worth $600,000 if it were just a 30 minute train ride from the Sydney CBD. Meanwhile, the newly-connected regional growth centres would act as a “pressure release valve” on property prices in Sydney and Melbourne. Under conservative estimates, 50,000 people could move into towns along the rail line each year, Mr Alexander said.
“You will push up prices enormously around Goulburn, people will be delighted,” he said.
Meanwhile, transport expert Chris Hale has warned the Government that taxpayers would still need to fund the lion’s share of the project’s cost because value capture could only ever fund around 10%. From The Canberra Times:
The rail link’s cost was estimated in the 2013 feasibility study at $114 billion, which is more than twice the cost of building the NBN…
Dr Hale, a transport consultant, said value capture could only ever cover a fraction of a project as large as east coast high-speed rail, leaving governments to pick up most of the tab.
“Your benchmark would be, if you’re getting 10 per cent you’re doing very well,” he said. “If we’re talking from Melbourne to Sydney at $45 billion to $50 billion, $5 billion worth of value capture would be fantastic.”
It seems the Coalition is also backtracking fast, with the Assistant Minister to the Prime Minister for Cities, Angus Taylor, pouring cold water on the HSR project, according to the Huffington Post:
I have written many times why I believe that HSR linking the East Coast capitals is a bad idea (for example see here). These reasons can be summarised as follows:
- Exorbitant cost: the 2013 study estimated a HSR line linking the East Coast capitals would cost around $110 billion to build.
- Lack of population density to support the project.
- Lack of competitiveness against air travel unless there are massive ongoing operational subsidies from taxpayers.
- Equity issues: why should residents of WA, SA, NT, TAS or anywhere else not located along the route fork-out huge taxpayer subsidies for what will in all likelihood be an infrastructure white elephant?
As I noted yesterday, HSR would also very likely be used as an excuse by Government to ramp-up Australia’s population growth even further in a bid to make the project economically viable (dog meet tail).
Again, if the Turnbull Government is looking to spend money to make the economy more productive, how about improving Australia’s freight links so that Australian businesses can more easily (and cheaply) deliver their goods to port, thus boosting exports?
Such an approach would be far cheaper and beneficial than delivering high-speed passenger rail pork in a bid to juice the ponzi economy.
