You know it’s an election year when the Prime Minister announces a plan to develop “high speed rail” (HSR) links between Australia’s capital cities. From The Australian:
…the Prime Minister is set to unveil a sweeping cities policy ahead of next month’s budget that will also transform the funding of Australian infrastructure projects.
A key plank of the government’s infrastructure and cities policy will be to use high-speed rail developments to encourage population growth in regional centres and ease growth pressures in Sydney and Melbourne…
These would be the first links of a longer-term very fast train network that would eventually run all the way from Melbourne to Brisbane.
To fund the multi-billion-dollar rail projects, including high-speed rail links and potentially the Melbourne Metro, the government will promote the use of “value capture” financing, which leverages the increase in land value resulting from new transport infrastructure to contribute to its cost…
Government sources told The Australian the Coalition wanted the very fast train network to be built in stages by a private consortium that would be given access to a share of the potential uplift in land value resulting from the new infrastructure.
I have written several times why I believe that HSR linking the East Coast capitals is a bad idea (for example see here). I have also slammed Malcolm Turnbull’s view that Australia’s cities are the “engine rooms” of the Australian economy, which they most certainly are not.
Ultimately, Turnbull’s HSR plan is about juicing Australia’s “population ponzi” to fuel the rent-seeker CBD economies.
As the HSR links are developed, the Government will very likely flood the corridors with new migrants to extract “betterment fees” from the uplift in land values.
In the meantime, the Australian economy – which let’s face it earns its keep in the world by selling its fixed endowment of resources – will become even more services-oriented, with the lion’s share of new arrivals working in non-productive “bullshit jobs” in the CBD.
The end result will mirror what has happened over the past decade as rampant population growth has flooded Sydney and Melbourne: exports will stagnate and the trade balance will deteriorate sharply as more and more services workers purchase imports, like cars and TVs, without earning the nation export income (see below charts).
While residents of Sydney and Melbourne might rejoice that Turnbull’s HSR plan could take pressure off the cities, it would very likely be used as an excuse to ramp-up Australia’s population growth even further in a bid to make HSR economically viable.
Moreover, in the era of the NBN, why will access to the CBDs be so vital?
If the Turnbull Government wants 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? It would be far cheaper than delivering high-speed passenger rail pork.
