Transport policy in context

1
Transport policy in context

• Ken HenrySecretary to the Treasury
• Canberra, 3 October 2002

2
Drivers of fiscal and economic performance
3
DRIVERS
ELEMENTS
population size
demography
physical location
age composition
4
DRIVERS
ELEMENTS
demography
financial
technology
scientific
industrial
5
DRIVERS
ELEMENTS
demography
technology
trade
investment
international integration
people
ideas
disease
6
DRIVERS
ELEMENTS
demography
technology
international integration
physical amenity
salinity
climate change
resource depletion
environmental degradation
7
Population growth rate
Per cent
Per cent
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
60-61
63-64
66-67
69-70
72-73
75-76
78-79
81-82
84-85
87-88
90-91
93-94
96-97
99-00
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Fertility rate
Total fertility rate
Total fertility rate
2.8
2.8
2.6
2.6
2.4
2.4
2.2
2.2
Replacement rate
2.0
2.0
1.8
1.8
1.6
1.6
1972
1976
1980
1984
1988
1992
1996
2000
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Net migration
Persons ('000)
Persons ('000)
200
200
180
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
10
Population growth rate projections
Per cent
Per cent
2.5
2.5
IGR projections
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
60-61
67-68
74-75
81-82
88-89
95-96
02-03
09-10
16-17
23-24
30-31
37-38
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Population ageing
Index value (2002 base100)
Index value (2002 base100)
450
450
400
400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
0
0 to 14
15 to 54
55 to 64
65 to 84
85
Total
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Annual GDP growth(Intergenerational Report
projections)
Per cent
Per cent
6
6
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1
1990/91
1998/99
2006/07
2014/15
2022/23
2030/31
2038/39
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Components of GDP growth
Total population
Share of population 15
Participation rate
Unemployment rate
Average hours worked
Capital deepening
Productivity
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The three Ps in Australia - past and future
Percentage contribution
Percentage contribution
4
4
Productivity
Population
Participation
3
3
2
2
1
1
0
0
-1
-1
15
Growth rates of GDP per capita - Australia past
and future
Percentage contribution
Percentage contribution
GDP growth
4
4
GDP per capita growth
Population growth
3
3
2
2
less
equals
1
1
0
0
-1
-1
Over 40 years, 3/4 percentage points a year
compounds to a third.
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Major components of budget cost
Drivers
Impacts in 40 years
Demography
4¼ GDP
Average cost of programmes
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Major components of budget cost
Drivers
Impacts in 40 years
4¼ GDP
Health
Demography
Aged care
1 GDP
Average cost of programmes
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Major components of budget cost
Drivers
Impacts in 40 years
Health
4¼ GDP
Demography
Aged care
1 GDP
Payments to individuals
½ GDP
Average cost of programmes
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Major components of budget cost
Drivers
Impacts in 40 years
Health
4¼ GDP
Demography
Aged care
1 GDP
½ GDP
Payments to Individuals
Average cost of programmes
Education etc
-½ GDP
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Major components of budget cost
Drivers
Impacts in 40 years
Health
4¼ GDP
Demography
Aged care
1 GDP
½ GDP
Payments to individuals
Average cost of programmes
-½ GDP
Education etc
Total
5¼ GDP
Fiscal adjustment
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Policy choices
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Tax to GDP ratio required
Per cent of GDP
Per cent of GDP
6
6
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
2002-03
2041-42
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Policies to grow GDP faster
Population
Participation
Productivity
24
Productivity growth is crucial
Per cent
Per cent
3.5
3.5
IGR projections
3
3
2.5
2.5
2
2
1.5
1.5
1
1
0.5
0.5
0
0
1960s
1970s
1980s
1990s
2000s
2010s
Multi-factor productivity
Capital deepening
Labour productivity
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Another look at the framework
Physicallocation
Agecomposition
Totalsize
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A framework for transport policy
Physicallocation
Agecomposition
Totalsize
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Roads
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Truck traffic
Main Drivers
Impact
Non-bulk freight
Bulk Freight
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Passenger traffic
Main Drivers
Impact
Cars per person
Avge distance travelled
Persons
Population
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Truck trafficBTRE projections 2000-15
Main Drivers
Impact
Non-bulk freight
GDP
3.25 pa
Exponential growth
Inter-modal Competition
Domestic Supply
Bulk Freight
Overseas growth
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Passenger trafficBTRE projections 2000-15
Main Drivers
Impact
Cars per person
Avge distance travelled
Slowing growth
Persons
Population
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Policy choice
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Some dimensions of possible regulatory change
Modifying price signals confronting users (demand)
Congestion pricing in urban areas?
Cost recovery regimes for heavy vehicles?
Improving systems for funding and managing new
transport infrastructure(supply)
Income tax s51AD, Div 16D
Part IIIA of the TPA
Competition provisions of the TPA
Private Financing Principles
Transparency and accountability in SPPs
AusLink
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Transport policy in context

• Ken HenrySecretary to the Treasury
• Canberra, 3 October 2002