Toronto, Canada.
The following extracts from Toronto's GO Transit website give a word picture of the impressive performance that city has achieved.

GO Transit is Canada's first, and Ontario's only, interregional transit system, established to link Toronto with the surrounding regions of the Greater Toronto Area (GTA). We carry more than 38 million passengers every year in a network of train and bus services that is one of North America's premier transportation systems. Since 1967, we have provided safe, convenient transportation to the communities we serve. GO Transit is officially known as the Greater Toronto Transit Authority (GTTA).

Our trains and buses serve a population of 4.9 million in an 8,000-square-kilometre area (3,000 square miles) radiating from Toronto to Hamilton and Guelph in the west, Barrie and Beaverton in the north, and Port Perry, Oshawa, and Newcastle in the east. GO Buses extend our service as far as 100 kilometres (over 60 miles) from downtown Toronto. GO offers connections with just about every municipal transit system in the Greater Toronto Area, including the Toronto Transit Commission (TTC).

Who funds GO Transit?
As Canada's first interregional transit system created and funded by a provincial government, GO Transit had until recently been financed entirely by the Province of Ontario, which subsidized any operating costs that were not recovered through revenue, as well as all capital costs.

In January 1997, the province announced it will hand over funding responsibility for GO Transit to the Greater Toronto Area municipalities (which consist of the City of Toronto, and the Regions of Halton, Peel, York, and Durham) plus the neighbouring Region of Hamilton-Wentworth. In exchange, the province would assume certain other funding responsibilities from municipal governments.

We recover most of our costs through revenue, consistently bringing in 80% or more of what we need to operate. Our annual subsidy requirement, operating and capital, is $106.58 million for 2000. In January 1998, the GTA municipalities and Hamilton-Wentworth began to fund GO Transit, cost-sharing all operating and capital subsidy under a formula devised by the province.

One year later, on January 1, 1999, a new municipal agency created by the province came into being: the Greater Toronto Services Board. The GTSB is composed of elected politicians from the GTA municipalities, including regional chairs, mayors, and councillors. GO Transit transferred over to the municipal sector as an arm of the GTSB on August 7, 1999 thus completing the process that had begun with the funding change of 1998.


Toronto compares with Melbourne in many respects. In a table ranking urban transit system around the world on a basis of Passengers by Line Mile by City, provided by Wendall Cox, Toronto ranks 131 at 1 Passenger per Line Mile and Melbourne ranks at 145 with .7 Passenger per Line Mile

The major differences between the systems are: -
that Toronto recovers "80% or more" of its costs compared with Melbourne's 55%, and
the losses are carried by the ratepayers served by the system and not the taxpayers.

Auckland, New Zealand.
Closer to home, New Zealand's largest city, Auckland, also faces problems with public transport. An extract from its draft strategic plan states: -
Building a network of rapid transit corridors will need a high financial commitment from the region. It is estimated that the cost of the planned corridors will be between $980 million and $1.8 billion. However, the cost of doing nothing will be greater. A recent study carried out for Auckland City Council revealed that congestion is costing the region over $750 million per year, and that$185 million is a direct cost to business. Funding a rapid transport corridor network will be a collaborative effort between Auckland City, the Auckland Regional Council (ARC), other Territorial Local Authorities, Infrastructure Auckland and Transfund.

With increased public transport, ARC subsidies to public transport operators will go up. The region's ratepayers will have to pay a significant part of these costs, For Auckland City ratepayers this will represent an additional $13 million to $34 million per year.

The New Zealand Government Treasury advised by email that the Government subsidises Auckland's public transport system by the amount of $20,000,000.

Note. The Auditor General of New South Wales was not as cooperative when asked if he could provide the New South Wales equivalent of Table 3.3D above. No reply was received.

The following table compares the population and subsidy paid in the three cities and a per capita comparison of the subsidy in each case.
City Population Subsidy Subsidy per head
Auckland 1,100,000 $20,000,000 $18.00
Toronto 4,500,000 $106,000,000 $24.00
Melbourne 3,300,000 $1,400,000,000 $424.00

If a similar per capita subsidy were paid for the provision of infrastructure in non metropolitan areas, it would mean an extra $16,000,000 annually to East Gippsland Shire. In Australia, the "cost of doing nothing" as referred to in the extract from Auckland’s strategy plan quoted above, is assumed to be a cost to the whole State when, in fact, it is a cost to the metropolitan area only. The lack of public transport to service Auckland and its suburbs is seen in its proper context, a cost to the city and its surrounding regions. The construction of the freeway system in metropolitan Melbourne is a highly significant factor in attracting business and commerce away from the country. In turn, it shifts people from the country to the metropolitan area, reducing the political influence of country areas. There is no justice in forcing country people to contribute to the cost. On the other hand, country highways carry food and raw materials vital to the city and are part of the national infrastructure.

It is quite apparent from the foregoing that in countries with which we have close ties it is the practise for users and ratepayers to carry infrastructure costs in large cities. While the terms of reference deal with public transport, it is equally obvious that the same issues arise with road funding. It seems more logical that the users/beneficiaries should fund roads used by thousands of vehicles per day, and that it is those at the end of a dusty unmade road that are more in need of taxpayer assistance.

It is difficult to establish how much is spent on roads by the Melbourne City Council but it appears that the Council collects about ten times the amount from parking fees than it spends on roads. If this is the case, then suburban motorists are paying City Link to use the roads that get them into the Central Business District and then pay the City Council to park on roads that the taxpayer and not the Council pays to construct.

The diversion of taxpayer funds to subsidise metropolitan infrastructure has a snowballing effect. It reduces the true costs for businesses and householders in the city and adds to the costs of businesses and householders in the non-metropolitan area. It appears likely that suburban businesses are also subsidising their CBD competition.

A table published in the Herald- Sun 10/2/2000 gives a comparison of average annual rates in the city and country. The table demonstrates that most country people pay as much or more for greatly inferior services. The average for country municipalities is $955 compared with the metropolitan average of $989. If the Melbourne City Council is excluded, the average metropolitan rate drops to $801.



There is evidence that the ratepayers of Melbourne are reluctant to carry the costs of the infrastructure that adds value to their properties. Half of the cost of the Underground Rail loop was to be paid for by metropolitan ratepayers but that project was barely completed before "the city" started to complain. Legislation was soon amended to greatly reduce this proportion from 50% to 25%. I have been unable to establish whether any contribution is now paid. The Underground Rail Loop was a massive gift from taxpayers to the Central Business District.

The West Gate Bridge was initially funded by tolls but this scheme was soon ended. There is some concern in rural areas that the City Link project is heading down the same track.

In fact, the subsidy to public transport in Melbourne on its own exceeds by a substantial amount the total revenue raised by rates from metropolitan residents.

Apart from the advantages that this transference of wealth gives city business over their country based competitors, there are spin-offs adverse to rural industries. New Zealand dairy farmers do not have to contribute to the cost of providing public transport in Auckland but Victorian dairy farmers are compelled to do so for Melbourne. Yet New Zealand dairy products compete with Victorian products in the supermarkets of Melbourne. Australian farmers also have to compete with Canadian farmers on global markets. In some cases, this becomes competition in Australian shops. They also have to compete with European farmers where there are many forms of assistance, like British farms that do not pay any rates on land or buildings used for agricultural production.

Summary.
It is clear that governments over many years have diverted billions of dollars of taxation revenue to fund infrastructure for the capital city. A substantial part, if not all, should have been paid for from rate revenue. Many of the municipalities that benefited have not had, for many decades, one unmade road or footpath, one wooden bridge or culvert, or over half their area designated as public land. Within easy reach, residents have libraries, museums, sports grounds, schools and a great array of other taxpayer funded facilities, which have added value to their properties but they have made no contribution as ratepayers. On a value for money basis, country ratepayers fall dismally behind their city cousins in what they get for the rates they pay.

Until recent years, subsidies for rural water and sewerage and the construction of irrigation storages and channels, provided some small offset for non-metropolitan residents. Despite all the rhetoric about "user pays", "a level playing field", "economic rationalism", "full cost recovery" and similar jargon, it is apparent that these theories are applied ruthlessly in the country by the government but are substantially modified if there is an adverse impact in the city.

One of the consequences of these policies, which are vigorously pursued whichever side of politics is in government, is that a redivision of electorate boundaries in the State of Victoria will soon add two more seats in the metropolitan area at the expense of the country. Well may they ask: - What do you see as the future of this country in the second century of federation? It is an increasingly bleak outlook for country people. It is strange that, in a nation that prides itself on giving everyone a "fair go", there is a system that is forcing more and more of its citizens to live in big cities and then throws responsibility on those who remain in the country to try to redress the economic imbalance.

Distance and space are part of the privilege of living in a large landmass like Australia. These elements are not man made - they are part of the geography - they are part of the attraction of living in Australia. The cities are artificial and their problems are created entirely by the people who live in them. They are the problems of congestion, pollution, crime, etc. These are the same problems of every city on the planet. Like other cities, ours should pay the price to solve the problems they create. Cities are happy to accept the benefit from economies of scale; they should also pay the costs.

Employment services.
This submission does not deal with the enormous amount of employment generated by government, both commonwealth and state, in the metropolitan area. This is most likely the single largest contribution to the stimulation of the growth of the city. If it is in the national interest that the decline of non-metropolitan areas of Australia should be arrested, it can only happen if both State and Commonwealth governments actively pursue policies to massively increase employment opportunities outside the capital cities.

A tragic consequence of the government's policies of stimulating the cities is the division that has been created between city and country. Although both sides of politics claim that Victoria is a multicultured State, the fact is that in most rural areas only four or five percent of the population was born in non-English speaking countries. It has probably been in that vicinity or even higher ever since the discovery of gold in 1851. In a number of metropolitan electorates, the percentage for whom English is not their native language, is over 50% and the average for the whole State is about 17%. Some substantial migrant groups are virtually unrepresented in Victoria outside Melbourne. It is no wonder that most rural people question the need for funding for multicultural affairs.

This attitude is misinterpreted as being racist when the real problem is that government policies have not encouraged migrants to become involved in all facets of Australian life, including regional and rural Australia. Country people are worried that future governments will be increasingly isolated from the opinions of the people who live outside the Capital cities.

Conclusion.
Structural change is an evolving process. It would be nonsense to hang on to outmoded and inefficient methods and expect to compete with those who adopt modern practises. The construction industry is not expected to dump its excavators and backhoes and revert to pick and shovel. The banking industry and municipalities should not be expected to go back to archaic methods either.

It is quite extraordinary that this inquiry has been initiated by authorities who are themselves leading the charge in centralising everything in the city. The most significant factor in centralisation is political power. It was political power that created the problem and only political power can solve it.

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