Action for Public Transport (NSW)
P.O Box K 606, Haymarket NSW 1240
16th February 2004
The Project Officer
Parking Space Levy Review
Ministry of Transport
GPO Box 1620
SYDNEY NSW 2000
Dear Sir,
We thank you for the opportunity to have input to the Parking Space Levy Review, and we present our submission below.
(Note: This is a combination of two submissions made by APT – the first on 5th February and an addendum on 9th February after receiving answers to some further questions.)
Summary
The Parking Space Levy (PSL) has the dual purpose of (a) discouraging private parking in major commercial centres by levying an additional cost and (b) providing a source of funds for construction and maintenance of infrastructure to encourage public transport use. APT endorses this strategy and wants to see it continue.
Our submission proposes no major changes. The current arrangements are relatively simple to manage. The system could be made more sophisticated by time-of-day charging, registration of "need to use" cars (such as for real estate agents), and similar refinements, but this would impose an administrative burden that would not be worth the cost (at this stage). Other uses for the funds, beyond infrastructure, were considered, but we propose that the current restrictions remain, again partly for simplicity.
We are, however, concerned by the apparent pre-occupation with income and expenditure, rather than goals. The discussion paper does not mention whether there has been any reduction in the number of car trips to the CBD or other major centres.
Our main proposals are:
What Is Action for Public Transport?
Action for Public Transport (NSW) is variously described as a community-based watchdog group on transport issues, a public transport consumer group guarding passengers’ interests, and an environmental group advocating ecologically sustainable transport systems.
We are concerned about, and opposed to, government transport policies that are driven by vested interests instead of the public interest, particularly the unsustainable use of private motor vehicles in urban areas, and the unacceptable level of long-haul freight on our roads.
APT has no ties with any union, political party, government agency or industry body. We serve the interests of the public transport users. Our funds derive solely from subscriptions and donations by members. Further details about APT can be obtained from our web site: http://www.aptnsw.org.au/
History of the Levy
The parking space levy was introduced on 1 July 1992, at the rate of $200 per space per year in the Sydney and North Sydney areas (known as Category 1 areas). This rate was increased to $400 from 1 July 1997 and again to $800 from 1 July 2000.
In July 2000, Parramatta, Chatswood, Bondi Junction and St Leonards were added as new Category 2 areas at the rate of $400 per year.
The rate was increased to $840 for Category 1 areas and $420 for Category 2 areas from 1 July 2003. These increases were an adjusted CPI increase. In future the rates will increase annually in line with the CPI.
Comment on Specific Topics as Invited
The Discussion Paper prepared by the Ministry invited comments on some specific areas of interest. Our comments below relate to these points.
The Ministry of Transport invites comments on whether or not the current levied areas are appropriate and if the levy should be applied to different areas.
The levy now applies in the following areas:
Category 1 - CBD, North Sydney
Category 2 - Parramatta, Chatswood, Bondi Junction and St Leonards.
We believe that the levy should continue to apply in those locations.
Consideration should also be given to extending the levy to:
These all have good public transport links.
The current exemptions are quite extensive and, for the sake of simplicity, we would not wish to see them increased.
Under "exemptions for all areas", the second item concerning resident parking may be worth looking at. The large residential and serviced apartment towers being built in the CBD usually provide one parking space per dwelling. It is beyond belief that each of these households has or needs a car, and it is highly likely that the parking spaces are being rented out to suburban drivers. Perhaps only a certain percentage (say 50%) of the spaces should be exempt, and the other 50% charged. It would be very difficult to sheet the charge home to individual owners who rented their space, and so the charge would be borne equally by everybody This may be unfair, but in the long run it might discourage developers from including so many parking spaces in their projects.
Under Category 2, we wonder whether the following purposes should be removed from the exemption:
.(a) for customers of a retail shop
.(c) for members and guests of a registered club
.(d) for customers of a restaurant.
In the four Category 2 areas, there is plenty of public transport or taxis for these people. Advertisements for these shopping centres regularly mention "free parking", but rarely give details of available public transport.
We would like assurance that periodical checks are performed in all the exempt areas to ensure that staff of these establishments are not making use of areas designated for client use.
Comments on the levy rate threshold(s) that would serve to discourage commuters from using their cars, depending on the use and district, are invited.
There is anecdotal evidence to suggest that rate increases deter some permanent bookings in parking spaces, but have little or no effect on occasional or once-off parkers.
To put this in context, the daily rate for a typical CBD parking spot is about $35, of which $3.23 represents the PSL ($840 / 260). The cost of a monthly booking is $363 (or about $18 per day for a 20 day month) but the PSL component is still $3.23.
If the CBD rate were trebled to $2,500, the daily parking fee would rise from $35 to about $42, hardly liable to deter an occasional parker. However, it would raise the cost of a monthly booking from $363 to about $500, perhaps with some effect. APT does not suggest that this be done – we are merely translating the figures into a practical environment.
Many car parking spaces, and indeed the cars themselves, are paid for by "the boss". If the boss has deep pockets, the threshold at which he will baulk may be very high.
Not being a motorist, I cannot say what threshold of rate increase might induce drivers not to park in the subject areas. Perhaps a sample survey form could be given to parking space users, asking them at what level would they consider making other arrangements.
There is something of a Catch-22 situation here. If the levy were increased to some absurdly high figure, then nobody would drive to town. Thus the object all sublime we would achieve in time. However, the owners of the car parks would find other uses for the spaces, and the funds raised by the levy would dry up. In other words, while stating a desire to reduce driving to and parking in the CBD, the government needs people to continue doing this in order to fund its public works. It is like the health system where the government needs people to keep smoking so that the tax on the cigarettes will pay for the hospitals.
This is the area that seems to have raised the most debate. Our general view is that the funds should continue to be restricted to infrastructure and not used on service provision.
We have received many suggestions for spending the money on projects such as car sharing, bicycle access, bicycle lockers, better bus services, demand-responsive buses, free city buses, pedestrian network connections, home delivery services for shoppers, etc.
While we support all these projects, we do not believe that the PSL funds should be diverted to them, for the following reasons.
While we recommend that the PSL funds should continue to be used solely on infrastructure, we are concerned about the statement in the Ministry’s discussion paper that says:
"the levy is the sole income for the fund and it is the principal source of on-going capital funding for multi-use interchanges for rail/bus/ferry/taxi services and for commuter car parking facilities." Surely interchanges should be built on the basis of their contribution to the public benefit, and not on the availability of certain funds. See below under "Other Matters".
5. CHARGING THE LEVY
Different levy rates were considered appropriate at the time in recognition of the different area characteristics of each Category.
Is this distinction still appropriate? Should the tiered structure be retained, discarded or expanded to allow for different rates in and across different areas?
There are probably good arguments for meddling with the current tiered structure to recognise changes in characteristics since the rates were applied, or for changing the very nature of the levy. However, for the sake of simplicity, we recommend that the current two-tiered structure remain – with one exception. Any new parking spaces built in Category 2 areas should be charged at the Category 1 rate. This requirement should be made known to developers before they submit plans for approval.
We agree that the levy should increase annually by at least the same rate as the CPI. However, if public transport fares increase by more than the CPI, then the parking space levy must increase by at least that same amount. The various reports being handed to the Minister at the current time threaten quite large increases in fares. It is no good increasing the PSL by 3% if the train fares increase by 10%. Instead of coercing people into public transport, such an anomaly would put them back in the driver’s seat.
OTHER MATTERS
APT considered that some matters were either not made clear in the discussion paper, or were not mentioned at all. Our questions to the Ministry, the subsequent responses and our further comments are given below.
Question: Can we see an annual Statement of Income and Expenditure and a Balance Sheet for the Fund?
Response: Such records do not exist. Instead, limited information is available in Budget Papers #2, #3 and #4 published in June of each year.
Comment: While we don’t believe that anything is being hidden, it would be good public relations to make this sort of information available.
This lack of information has restricted the content of our submission. We were unable to comment on whether the funds have been collected and handled in an appropriate and timely manner or on the controls over their disbursement.
Question: How does the Ministry select projects to be funded from the PSL?
Response: Projects come to the Ministry by way of representations from anyone - Councils, Transport Agencies, MPs, lobby groups, commuter groups, election commitments, etc. All approaches are investigated by transport planners to determine the feasibility of the proposal. A short list of projects is drawn up based on the likely outcomes a project might achieve. Priority is determined and funding for a short listed project is given as funds become available even if the funding is staged over more than one year.
Where another Transport Agency has a priority (say a station upgrade), that Agency works with the transport planners to determine whether a joint station upgrade and interchange can be built at the same time (for example, Mt Druitt station upgrade and interchange).
Levy funding is funding of last resort where no other funding is available nor likely to be available in future years. Priority is given to multi-modal work because it generally is more cost-effective in encouraging users to access public transport.
Comment: This approach seems reasonable.
Question: The discussion paper says that "the levy is the sole income for the fund and it is the principal source of on-going capital funding for multi-use interchanges for rail/bus/ferry/taxi services and for commuter car parking facilities. If that is the case, who paid for these facilities before the PSL came along?
Response: Few projects were being funded for multi-modal projects prior to 1992. Various Commonwealth programs (e.g. Better Cities); NSW Programs (e.g. 3 X 3); and private/public joint ventures (e.g. bus layovers) provided funds for the few projects that were built.
Comment: Nil.
Question: Is the total spending of all bodies on public transport infrastructure now the same as before, or is there a genuine increase in spending?
Response: No adequate data is keep showing total spending by all transport providers. In the NSW public sector, significant increases have occurred in spending on capital works, major periodic maintenance and minor maintenance since 1988.
Comment: Nil
Question: The Discussion Paper lists 27 projects totalling $84.4m funded by the PSL over nine years. Would these have been built if the PSL did not exist? What did State Rail/State Transit/Treasury/Local Govt do with the $84.4m they saved?
Response: In the earlier years of the Levy's collection, other funding was available from the Better Cities Program, the Urban Public Transport Fund and the 3 X 3 Levy. Since 1998, these funding sources have not been available. Priority for an interchange and/or commuter car park project would have been determined alongside all public transport funding using Consolidated funds as approved by the NSW Cabinet each year.
Comment: This supports our recommendation in the earlier submission that PSL funds should continue to be restricted to infrastructure. Funds for other public transport improvement programs are available elsewhere, leaving infrastructure free from competition for the PSL dollar.
The charter for the PSL says that the funds "can only be used for the construction and maintenance of infrastructure". How, when, by whom and to whom are the funds allocated for maintenance? What percentage of PSL funding is allocated for maintenance of previously built infrastructure? Or, to put it the other way, who pays for the maintenance of PSL funded infrastructure?
It is all very well to build new car parks and interchanges, but they have to be looked after. Is appropriate funding being made available for this?
Does the PSL management have any way of evaluating the success of the scheme? The fact that $84.4 m worth of infrastructure has been built does not mean that it has been successful. There needs to be some other performance indicators – perhaps based on number of cars entering the CBD, or number of cars parked in the CBD, or rail patronage or use of car parks at suburban stations.
We suspect that the answer to all of these is "No", or, even worse, "We don’t know".
The government is spending billions on new roads and tunnels to bring cars into the CBD, and, as I type this very moment, the minister is on the radio explaining that train services will be reduced because of a shortage of trains and drivers.
It would be appreciated if a copy of the final report from the review could be sent to us.
ACKNOWLEDGEMENTS
The author thanks all those who have contributed to this submission. You will know who you are because your words have been blatantly plagiarised – all in a good cause.
Yours faithfully,
Allan Miles
Secretary
Action for Public Transport (NSW)