Project 10000′s financing model – does it stack up?

The Victorian ALP has released its transport plan, Project 10000, so named for the 10,000 construction jobs that are supposed to result.

The plan, in short, appears to be largely a return to what the Brumby government had in mind before losing office, though the most expensive project, Melbourne Metro, is dependent on federal funding that is unlikely to emerge from a car-obsessed Coalition government. The plan calls for a raft of level crossing eliminations, widening of the remaining sections of the Tullamarine Freeway, the “Western Distributor” toll road to improve road access to the Port of Melbourne, and increased funding for outer-urban and regional road maintenance. There’s no support for the East-West link. I’m not sure how seriously their opposition can be taken, given that if things happen according to schedule the contracts will be signed by the time of the 2014 election and they’ve already stated that they won’t renege on any such.

As usual, the rail advocates are screaming that signalling is a higher priority than Metro. Cycling advocates have spotted the complete omission of cycling from the document. And by far the most sensible way to use transport infrastructure more efficiently – congestion charging – doesn’t get a look in. It’s something that really needs to be considered for the public transport system as well as the roads.

But, in this post, what I really want to look at is how the infrastructure projects, including the big ones specifically mentioned and the smaller ones, are to be paid for. Aside for the federal funding for the Metro, and the tolls on the Western Distributor, it seems that everything will be paid for out of something called the “Victorian Transport Building Fund (VTBF)”.

Politicians and some voters seem to love dedicated funds for this, that and the other. It’s in large part a wank; governments can and do pull money into and out of such funds all the time. But, in any case, what’s perhaps more important is where the dollars coming in to the VTBF are supposed to come from. Two sources of funding are mentioned.

The second of the sources mentioned actually makes some small amount of financial sense. If level crossings are eliminated, in many cases that means a chunk of rail track has to be placed underground. The land above that newly-built underpass will, in many cases, be a valuable asset that can be sold. The question is of course how much that land is worth; I don’t know, but I’d also observe that the plan doesn’t even attempt to estimate its worth either. But, still, as a method of recovering some of the cost of doing the underpasses it’s not totally crazy.

But the plan to pay for transport infrastructure by leasing the Port of Melbourne – well, it does smell of funny money, just not in the way that state Treasurer Michael O’Brien is claiming.

The Port of Melbourne is currently run by the Port of Melbourne Corporation, a government-owned corporation. The prices it charges, as a monopoly, are regulated by the Essential Services Commission. It pays a CPI-indexed fee – $75 million in 2012 – to the government. On top of that, however, the Corporation makes a tidy profit each year – around $60 million, some of which has been retained, and some of which is returned to the government as a dividend. The commercial aspects of the PoMC are run to maximise profit within its regulatory constraints.

Given the constraints it operates under – which can’t change significantly whoever operates the port – and the fact that it is already run along commercial lines, it is not at all clear to me why it would make financial sense for the government to sell or lease the port. The government’s gross debt might fall, but it would lose an income-producing asset, and the financial position would stay the same. The only reason a sale would make sense is if the port is being run inefficiently.

It’s not quite as crazy as the insane plan to privatize HECS debt, which would be a gift to the private sector courtesy of the Abbott government, because there may be some scope for a commercial buyer to run the port more cheaply. But, even so, it’s hard to see the difference substantial enough to pay for a large crossing elimination program.

If governments want to pay for infrastructure, there’s no shortage of people willing to lend them money at cheap rates. Can we stop playing accounting games and pay for that infrastructure the cheapest way possible – borrow the damn money, and if necessary raise taxes to pay off said borrowings?

Posted in Economics, politics, Victoria | Tagged , , , ,

Back in purple

Sorry for the paucity of posts – real life, and specifically preparation for another semester of teaching, intrudes!

However, I’m excited that Larvatus Prodeo has been revived for the 2013 federal election, and I’ll be contributing posts there for the next few months.

I may still have the occasional post here for material that doesn’t fit on LP, however.

Posted in Uncategorized

Asteroids!

Well, thanks to Russia’s corrupt cops and dodgy insurance, we have an abundance of footage of the most damaging (and spectacular) meteorite impact in at least a century:

Inevitably, there is a bigger, more damaging asteroid out there with our name on it, and sooner or later one will hit a major city.

While there is some dark amusement in certain political circles at conservatives suggesting that funding for climate change mitigation be cut to pay for asteroid defence, that shouldn’t preclude some more serious consideration of whether we can or should be doing anything about the risk.

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Failure, perhaps. But costly?

This kind of headlinedrives me more and more up the wall:

Gillard’s school plan a costly failure

A $16 million federal Labor commitment to stem the shortage of maths and science teachers by fast-tracking bankers, accountants and engineers into classrooms has been an expensive failure with just 14 participants recruited.

I agree that it didn’t work. But costly?

As it turns out, that only $8 million will actually be spent on the program by the time it winds up, as $8 million will be redirected to another teacher recruitment program.

In the context of a $360 billion federal budget, 8 million is chicken feed. And in a budget of that size, there are guaranteed to be dozens of programs of similar or greater magnitude that don’t work perfectly. In fact, there should be a certain proportion of programs that don’t work; governments should experiment with new ideas, keep and possibly expand the ones that work and discard the ones that don’t. Which appears to be what has happened here.

As the actual report goes on to explain, the failure of the program relates to a number of things – states requiring that teachers be fully qualified in the traditional way before entering the classroom, potential recruits not being willing to work in the schools that actually require more teachers, and difficulties of transferring across state boundaries. Perhaps some of these things were knowable beforehand, but the unwillingness of recruits to work in the required areas? I doubt it.

If the government had been warned that the program was unlikely to work and proceeded anyway; if the program was hundreds of millions of dollars rather than tens, or if they hadn’t repurposed the money once it was clear it was misconceived they might deserve a bollocking for incompetence. But at this stage this seems entirely like the normal business of government. Running headlines supporting Christopher Pyne’s preferred narratives is not only misleading, it is ultimately corrosive to good government, by encouraging such risk aversion that governments never try anything that might be a good idea.

Posted in politics | Tagged , ,

Future of housework 6 – bin night

This is a simple one – but, nevertheless I reckon it could be very useful.

Taking the bins out, and bringing them back in again, is a pretty simple task, one that children the developed world over are tasked with. It’s also a pain in the neck if it’s cold, raining, you’re away on bin night, or worst of all if you forget to take the bins out!

It’s a simple enough task, in fact, that it just screams out for a robot to do it.

The beauty of a robot wheelie bin – or a wheelie bin mover – is the simplicity of the task. While a full wheelie bin can be quite heavy, they don’t need to be moved in any particular hurry – in fact, you would want it to move very slowly for safety. There’s no need for complex hands, legs, or anything like that.

From a hardware engineering point of view, there would be a number of challenges, most notably whether the robotics would stay attached to the bin at all times, including when emptied into the truck, or would be physically separate. Achieving sufficient stability to avoid spillage would also be a challenge. But these are all likely to be fairly easily solvable. The Wheeliesafe electric bin trolley, indeed, solves many of the issues.

The software problems for the robot are the interesting ones:

  • to be able to navigate to a position where the truck can pick it up, possibly avoiding static obstacles
  • to detect obstacles moving into its path and stop immediately if such an obstacle is detected.
  • to open garage doors or gates and ensure that they are closed.
  • These all pose their own challenges, not least to ensure that any closed door is not left open, and particularly if you assume “dumb” infrastructure (such as existing electrically operated garage doors). But it seems to me that these are all solvable in the medium term.

    And it would be a fun engineering project!

    These high school kids have had a partial crack, but it’s not clear whether it’s simply a remote-controlled wheelie bin or truly autonomous. Using a solar panel to charge the bin is pretty smart.

Posted in Futurism, Nerdistry | Tagged , , | 1 Comment

Now, anybody (with $17,000) can be a sniper

Warning: this post is about a new type of gun. I’ll explain what it is and how it works before discussing the moral questions it poses.

Firing a rifle accurately, even over relatively short ranges, isn’t easy. Firing a rifle accurately over long ranges takes a certain amount of talent and a great deal of practice.

Even when one has mastered the basic skill of getting the shot to travel on the initial trajectory you want it to go, over long ranges that’s not enough. Bullets do not travel like a laser beam; they follow a parabola due to gravity and aerodynamic drag, drag that varies according to atmospheric conditions. They are affected by the wind, too. All of this requires you to adjust your aim point. And, particularly if you’re like me in my few attempts at firing a rifle, your aim will wobble around a certain amount.

Not, apparently, with the Tracking Point rifle, (corporate site here) that uses a computer to compensate for all these things automatically.

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Posted in Biggles, Futurism | Tagged , , , ,

Future of housework 4 – kitchen robots

In Part 3, I noted that one of the most time consuming tasks in the modern kitchen is simply moving objects from place to place; the utility of high-performance but specialized kitchen tools is limited by the time it takes to retrieve them from the cupboard, set them on the bench, wash them, then put them away. Washing dishes may be mostly automated, but loading and unloading the dishwasher isn’t. And so on.

While better designed kitchens can help to some extent, we are probably reaching diminishing returns in that area. What is required is technology that can automate the process of moving kitchen utensils from place to place; for this, we turn again to the technology of robotics.

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Posted in Economics, Futurism, Nerdistry | Tagged , , | 2 Comments