Only the stupid think the cost of climate change is simple

You know an election campaign has run off the rails when the pollies start hurling the results of economic modelling at each other. Voters find it incomprehensible and cover their ears, and the only people who think it proves something are the pollies themselves and the journalists silly enough to imagine their incessant demands to “show us your modelling” will expose the truth.

The more you know about modelling, the less it impresses you. There’s a place for economic modelling, but it’s in a seminar room, being pulled apart by experts, not in the argy-bargy of politicians seeking election, vested interests seeking more bucks, and journos who think their customers will just love a bit more meaningless conflict.

Thinking people know and accept that the future is unknowable. Unthinking people delude themselves that somewhere out there is an expert with a magic box – or maybe a crystal ball - who can give them a sneak peek at what only God knows in advance.

The only truly honest thing a modeller could tell you (which their need to earn a living invariably stops them doing) is: What on earth makes you think I’d know?

In the public debate, modelling is about misleading people – unknowingly or, more often, knowingly. It’s used like a drunk uses a lamppost: more for support than illumination.

There are two approaches you can take to modelling results. One, believe all results that fit with your prejudices and ignore all those that don’t. Two, be sceptical of them all and don’t accept any results where you haven’t been told which assumptions are the main drivers of those results.

Although Prime Minister Scott Morrison has only an unconvincing policy to achieve the 26 to 28 per cent reduction in greenhouse gas emissions by 2030, to which Australia has committed itself, the media is pounding Opposition Leader Bill Shorten to reveal the “cost” of his promise to reduce emissions by 45 per cent by 2030.

For reasons I don’t understand, Shorten is displaying a degree of honesty rarely seen in Canberra and claiming he doesn’t know the cost. The media can tell a lie when they see one, and are almost apoplectic in their efforts to extract the truth from him.

To the media, it’s a simple question, so it must have a simple answer and Shorten must know it. If he knows but won’t tell us, this can only be because the cost is absolutely horrendous. His climate change spokesman, Mark Butler, says it’s impossible to know the cost – but that’s obviously another lie.

Which, in a way, it is. It’s not possible to know the cost with the remotest degree of accuracy, but it’s perfectly possible to fudge something up and say it’s the cost.

What cost is that? The cost of whatever suits. Cost to the budget? Cost to the economy? Cost to the economy that ignores any benefit to the economy? Cost to the economy that ignores the cost of not doing anything?

Shorten’s in trouble because - for once – he isn’t playing the game the way the denizens of the House with the Flag on Top expect it to be played. Why won’t the man do the honourable thing and pay some “independent” economic consultancy to do some modelling that proves the cost would be minor?

An old political rule says that, whenever you leave a vacuum, your opponent will be happy to fill it for you. Enter Morrison, waving modelling carried out by Dr Brian Fisher, a former head of the Australian Bureau of Agricultural and Resource Economics, and now a consultant to the mining industry.

Fisher denies being a climate change sceptic and says the government didn’t sponsor his modelling. He’s been modelling the cost of acting against climate change since his time at ABARE in the 1990s and invariably finds it to be surprisingly high (I can remember decades ago writing to explain why his results weren’t as bad they could be made to sound).

His latest modelling finds that Labor’s policy would cause gross national product to be at least $264 billion, and as much as $542 billion, lower than it would otherwise be in 2030. By then the wholesale price of electricity would be up to 67 per cent higher than otherwise. Real wages would be up to 10 per cent lower than otherwise, and employment would be up to 300,000 lower than otherwise.

For what it’s worth, other economists who are experts on climate change have said these estimates of the costs are (to put it politely) far too high.

What’s more important to understand is that econometric models are built on a heap of assumptions – assumptions about how the economy works, and assumptions about what will happen in the future.

Dr Richard Denniss, of the Australia Institute, offers this list of things no one knows, but modellers have to make assumptions about if they want to claim they know what some policy change will cost: how far and how fast the cost of renewable energy and battery storage will fall; how far and how fast the cost of electric cars will fall; how quickly firms that face higher energy prices will adapt by increasing their efficiency; how the introduction of new sources of electricity generation and storage will disrupt the business models of today’s highly profitable electricity retailers; how regulation of energy prices will increase or decrease the monopoly profits of energy and petrol companies; how much the trend to household electricity generation and storage will increase the efficiency of the national grid by reducing problems with seasonal peaks in demand; whether the batteries of electric cars will be a form of free storage for the national grid; and how long it will take for autonomous vehicles to transform car ownership and use.

Still think the cost of Labor’s emissions policy is a simple question with a simple answer - that’s believable?

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THE HEALTH OF THE AUSTRALIAN ECONOMY

May 2019

In Josh Frydenberg’s recent budget speech, he referred to our “strong economy” no less than 14 times. Turns out the Morrison government is using the claim that it has delivered a strong economy as its main argument that it should be re-elected at the federal election on May 18. Unfortunately for Scott Morrison, the release of recent key economic indicators of the health of the economy have caused many economists to abandon their view that the economy is reasonably strong and about to get stronger.

The first upset came in early March, with the national accounts for the December quarter of last year showing a second successive quarter of surprisingly weak growth, which lowered the growth in real GDP over 2018 to just 2.3 per cent. The second data upset came in late April, with the CPI showing no overall change in prices in the March quarter of this year, thus causing the annual rate of inflation to fall to 1.3 per cent – way down from 1.8 per cent the previous quarter and way below the bottom of the Reserve Bank’s inflation target of 2 to 3 per cent on average. This news of weak economic growth and an inflation rate moving further below the target range has greatly increased the pressure on the RBA to add to the monetary stimulus acting on the economy by cutting the overnight cash rate, after having held it steady for more than two and a half years.

To see how disappointing this recent news is, consider this. In Morrison’s own budget this time last year, he forecast that the economy’s growth (real GDP) in the financial year just ending would have accelerated to 3 per cent. In this year’s budget Mr Frydenberg cut this forecast to 2¼ per cent. Last year Morrison forecast an inflation rate of 2¼ per cent in the financial year just ending; now Frydenberg has cut it to 1½ per cent. Morrison forecast wages growth of 2¾ per cent; Frydenberg cut it to 2½ per cent.

The fact is that, for most of the time since the global financial crisis, Treasury and the RBA have been forecasting that the economy would soon return to growing at its “trend” or “potential” rate - which they calculate to be 2¾ per cent a year – and even a bit faster while the economy uses up idle production capacity, know as the “output gap”, before reaching full employment of labour and other resources. Full employment is estimated to be growth of 2¾ per cent and a NAIRU – non-accelerating-inflation rate of unemployment - of about 5 per cent. This would involve inflation returning to the centre of the RBA’s target range, 2½ per cent, and wage growth increasing to 3½ per cent.

Budget forecasts: Treasury has forecast that this acceleration would begin each year for the past seven years. And each year, when it has failed to happen, Treasury has repeated the forecast of an early return to the “old normal”, just moving it forward a year. Surprisingly, despite the recent evidence of a sharp slowing in the economy in the financial year just ending, in this year Treasury persisted with forecasting that the economy will soon return to the “old normal”. Indeed, it sees the economy speeding up in the coming financial year, 2019-20, returning to potential growth of 2¾ per cent, staying at the NAIRU of 5 per cent, inflation back in the target range at 2¼ per cent and wage growth strengthening to 2¾ per cent, implying real wage growth of about ½ per cent. And things get even better in the following year, 2020-21, with real wage growth increasing to ¾ per cent, then 1 per cent in each of the following years. It would be wonderful to see these forecasts come to pass, but they are increasingly hard to believe.

Why the economy’s weakness hasn’t been evident until now: There are four main reasons why the economy’s continuing weakness hasn’t been evident until now. First, we’ve been preoccupied with the ups and downs of the decade-long resources boom: the rise and then fall in mineral export prices and our terms of trade, and then the rise and fall of mining investment spending.

Second, our rates of growth have compared well with other advanced economies because we have had much higher rates of population growth than they have. Over the 6½ years since mid-2012, real GDP has grown by 17 per cent, whereas GDP per person grew by less than 6 per cent. In other words, most of our growth was explained by a fast-growing population, not by higher productivity and growing prosperity. The economy was bigger, but not a lot better. Measured by GDP per person, our growth has not been a lot faster than the other rich countries.

Third, in 2017, our growth in employment was about twice as fast as usual, and since then it has been faster than usual. Over the past 2¼ years the unemployment rate has fallen from 5.8 per cent to 5 per cent – which is impressive. Even so, it’s now only a fraction lower than it was in mid-2012. Similarly, the under-employment rate has fallen over the past 2¼ years, but is still quite a lot higher than it was in mid-2012.

Fourth, much of what growth we’ve had in the economy, and in employment, has come from the public sector, not the private sector. Of the 2.3 per cent growth in GDP over 2018, increased government consumption and investment spending accounted for more than half. Similarly, most of the growth in employment has come from the rollout of the National Disability Insurance Scheme and from increased spending on infrastructure by the states, as well as in health and education. The point here is not that there is something bad about government spending, but just that, when you take it away, you find the private sector economy – the biggest part of the economy - isn’t strong.

The key role of wages: Much of the economy’s weak growth and weak prospects of faster growth can be explained by weak growth in real wages. It’s not surprising that nominal wage growth has been low when consumer price inflation has also been low, but there has been almost no real wage growth for the past five years. In the past, a healthy economy has seen real wages growing by a per cent or more each year, roughly in line with growth in the productivity of labour. An economy with no growth in real wages is an economy in which real economic growth is likely to be weak. This is because wages are the main source of growth in household disposable income, household disposable income is the main source of growth in consumer spending, and consumer spending accounts for about 60 per cent of GDP. What’s more, firms are unlikely to invest much in expanding their business if demand for their products isn’t strong. And it’s firms replacing their equipment with the latest model than does most to increased productivity by spread new technology through the economy. Treasury and the RBA have been forecasting a recovery in real wage growth for five years or more, but it still hasn’t happened. The union movement and some labour economists have argued that the decentralisation of wage fixing has shifted the balance of bargaining power in favour of employers and robbed workers of their ability to ensure their real wages keep rising. Whatever the true cause of weak wage growth, it’s certainly hard to see the economy returning to strong growth until real wages are growing strongly.

Now let’s turn to how the two arms of macroeconomic management – monetary policy and fiscal policy - have been responding to this story of disappointingly weak growth in wages and GDP.

The monetary policy “framework”

Monetary policy - the manipulation of interest rates to influence the strength of demand - is conducted by the RBA independent of the elected government. It is the primary instrument by which the managers of the economy pursue internal balance - low inflation and low unemployment. Monetary policy is conducted in accordance with the inflation target: to hold the inflation rate between 2 and 3 pc, on average, over time. The primary instrument of MP is the overnight cash rate, which the RBA controls via market operations.

Recent developments in monetary policy

Because of the six consecutive years of below-trend growth since 2011-12, the Reserve Bank cut its cash rate from 4.25 pc to 1.5 pc between the end of 2011 and August 2016. For more than 2½ years after that, it left the rate unchanged – a record period of stability. It’s not hard to see why it left the official interest rate so low for so long: the inflation rate has been below its target range; wage growth has been weak, suggesting no likelihood of rising inflation pressure; the economy has yet to accelerate and has plenty of unused production capacity, and the rate of unemployment shows little sign of falling below its estimated NAIRU of 5 pc. For many months, the RBA governor, Dr Philip Lowe, kept saying that, though the next move in the cash rate, when it came, was likely to up, a rise was some way off. Earlier this year, however, he switched to saying that the next move was just as likely to be down as up. And now, with the recent bad results on growth and inflation, he is under pressure to start cutting the cash rate.

Fiscal policy “framework”

Fiscal policy - the manipulation of government spending and taxation in the budget - is conducted according to the Morrison government’s medium-term fiscal strategy: “to achieve budget surpluses, on average, over the course of the economic cycle”. This means the primary role of discretionary fiscal policy is to achieve “fiscal sustainability” - that is, to ensure we don’t build up an unsustainable level of public debt. However, the strategy leaves room for the budget’s automatic stabilisers to be unrestrained in assisting monetary policy in pursuing internal balance. It also leaves room for discretionary fiscal policy to be used to stimulate the economy and thus help monetary policy manage demand, in exceptional circumstances - such as the GFC - provided the stimulus measures are temporary.

Recent developments in fiscal policy

Until recently, 2017-18, the Coalition government (and the Labor government before it) had seen the growth in the economy being repeatedly less than forecast, meaning the government has made slow progress in returning the budget to surplus and halting the rise in its net debt. Even so, it has focused on the medium-term objective of fiscal sustainability, not the secondary objective of helping monetary policy to get the economy growing faster. The long period of policy stimulus has come almost wholly from lower official interest rates.

In the year to June 30, 2018, however, the underlying cash budget deficit proved a lot lower than expected - thanks mainly to an improvement in export commodity prices and higher company tax collections for other reasons. The improvement in export prices continued in bolster company tax collections in the financial year just ending, 2018-19, producing another big fall in the budget deficit. How can the budget be improving rapidly when economic growth has been weak? Because of the unexpected improvement in the terms of trade and thus mining company profits and tax payments.

Since this year’s budget rests on Treasury’s continued assumption that the economy is about to return to the strong growth of old, Mr Frydenberg is forecasting a return to a modest budget surplus of $7 billion (0.4 pc of GDP) in 2019-20, with the surplus continuing to grow in future years.

This forecast improvement in the budget balance means that, when expressed as a proportion of GDP, the federal government’s net debt is now expected to peak at 19 pc in June 2019, and then fall back to zero by June 2030. Again, it will be a great thing if it happens. It also means the budget balance is expect to continue improving despite the budget’s centrepiece, a doubling of last year’s plan for tax cuts in three stages (July 2018, July 2022 and July 2024) over seven years, with a cumulative cost to the budget of a remarkable $300 billion over 10 years. This is possible because of plan’s slow start.

Judged the RBA’s way, by its “fiscal impact” (the expected direction and size of the change in the overall budget balance), the “stance of fiscal policy” adopted in the budget is mildly contractionary. However, judged the Keynesian way (which focuses on the expected direction and size of the change in just the structural or discretionary component of the budget balance) the stance is mildly stimulatory, thanks to the doubled immediate first stage of the tax cuts.

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Endless fights over money don’t improve education results

One of the few things both sides agree on in this election campaign is that we must get education right. A highly educated and well-trained workforce is our best insurance that all the benefits that digital disruption brings don’t come at the cost of many people unable to find decent jobs.

As a rich nation, our workers are highly paid. That’s not bad, it’s good. But it does mean we have to ensure our workers continue being equipped with the knowledge and skills that make their labour valuable - to local employers and to the purchasers of the goods and services we export.

One thing it doesn’t mean is that all our youngsters should go to university. There will be plenty of well-paid, safe, interesting jobs for the less academically inclined, provided they’re equipped with the valuable technical and caring skills provided by a healthy vocational education and training sector.

A top-notch technical education system will also be key to achieving something we’ve long just rabbited on about: lifelong learning. Being able to update your skills for your occupation’s latest digital whiz-bangery, or quickly acquire different skills for a job in a new industry with better prospects than the one that just ejected you.

But while we’re emphasising education’s instrumental importance to maintaining our material standard of living, we should never lose sight of its intrinsic value to our spiritual living standard. Education for its own sake. Because it satisfies humans’ insatiable curiosity about the world – even the universe – we live in.

We need to get education and training right at every level, from childcare (these days renamed ECEC - “early childhood education and care”), preschool, primary and secondary school, vocational education and training, and university.

To me, our greater understanding of the way tiny brains develop combines with common sense to say that, in our efforts to get every level of education up to scratch, we should start at the bottom and work up.

The better-equipped kids are when they progress from one stage to the next, the easier it is for that next stage to ensure they thrive rather than fall behind.

On childcare, the Coalition did a good job of rationalising the feds’ two conflicting childcare subsidies, but Labor is promising a lot more money for childcare, including phasing in much better pay for (mainly female) better-educated childcare workers.

The Coalition has achieved universal preschool for four-year-olds and, in the budget, extended that funding for a further two years. Labor has topped that, promising permanent funding arrangements and extension of the scheme to three-year-olds, as most other rich countries do.

Let’s be frank: because Labor plans to increase, rather than cut, the tax on high income-earners, it has a lot more money to spend on all levels of education (plus a lot of other areas).

It’s certainly promising to spend more on schools. The Coalition’s great achievement has been to introduce its own, better and somewhat cheaper version of businessman David Gonski’s needs-based funding of schools – which it immediately marred by doing a special deal with Catholic schools.

Labor’s promising to return to its earlier Gonski funding levels (but, hopefully, not to its earlier commitment that no rich school would lose a dollar).

It’s often claimed we spend a lot on schools relative to other countries, but the Grattan Institute’s schools expert, Dr Peter Goss, says that, when you allow for our younger population, only the Netherlands and the United States spend less than we do among nine other comparable rich countries.

International testing shows our 15-year-olds’ scores for maths, science and reading are each below the average for those countries. On maths, our score of 524 in 2003 had dropped to 494 by 2015.

For science, our gap between the top and bottom students – a measure of fairness - is wider than for the others, bar Canada, South Korea, Japan and even Britain.

Which demolishes the claim that we’re pouring more money into schools but getting worse results. What’s true is that our spending is below average and our results are also below average – and getting worse.

So, do we need to spend a lot more? No, not a lot more now we’ve gone a long way towards redistributing funding favour of needy (mainly public) schools full of kids with low income, low educated parents.

The feds and, more particularly, the states have more to do to re-align funding between advantaged non-government schools and their own disadvantaged public schools.

Once disadvantaged schools are getting their full whack of needs-based funding, however, we can end the eternal shootfight over money and move to the more important issue of ensuring the money's better spent.

Much can be done to help teachers move to more effective ways of teaching, making schools less like a production line and giving more attention to individuals, many of whom have trouble keeping up, while some are insufficiently challenged.

But, Goss says, this is mainly a job for the state governments, and the feds should avoid trying to backseat drive. The feds would help more by obliging the universities to do a much better job of selecting and preparing future teachers.

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Treasury signs off on budget fantasy forecasts

While we were preparing for the Easter-Anzac super long weekend, the secretary to the Treasury and the secretary of the Finance Department released the PEFO – pre-election economic and fiscal outlook – their official, once-every-three-years licence to tell us anything the government hasn’t told us but should have. And what was that? Not a sausage.

They made trivial updates to the budget figures and solemnly swore that all the rest of it “reflects the best professional judgement of the officers of the Treasury and the Department of Finance”. Wow. Really?

This despite the fact that, taken at face value, this is the most fiscally irresponsible budget since Whitlam. It’s a budget claiming to be able to cut income tax by $300 billion over 10 years and spend $100 billion on infrastructure over 10 years, while still returning to continuous surplus and eliminating the net debt over the same period.

No sensible person could believe all that was likely to come to pass. Far more probable that, should those tax cuts and spending increases actually happen, it wouldn’t be long before the budget was back in deficit and the debt was growing not falling.

We owe it to the Grattan Institute’s Danielle Wood and her team for joining the dots, provided in the bowels of the budget papers, to reveal how the cost of the tax cuts stays small until the last year of the budget’s “forward estimates”, 2022-23, then leaps to a cost of about $35 billion a year, rising to about $45 billion a year in 2029-30.

Never before have we had tax cuts remotely approaching such a cost.

The reason this grandiosity reminds no one of the Whitlam era is that no one takes it at face value. No one believes it could possibly happen. It’s a description of a future fantasyland.

First, it’s the budget of a chronically unpopular government desperately trying to bribe its way back to office, with little chance of succeeding.

Second, its supposed action is many years – and two or three elections – off in the future. Whatever transpires over the next decade, we can be pretty sure it won’t bear much resemblance to the scenario painted in the budget papers.

But if it’s all harmless bulldust, it can hardly reflect Treasury’s “best professional judgement” unless Treasury’s joined the happy fiction business. And the fact remains that, even more than its predecessors, this is a budget calculated to mislead.

What Treasury declines to make sure we realise is that the magic is all achieved by assumption. Convenient assumption.

Just as Wayne Swan’s promised return to permanent surplus – and his later assurance that his hugely expensive disability insurance scheme and Gonski school funding, though carefully hidden beyond the forward estimates, were “fully funded” – were based on overly optimistic assumptions that failed to come to pass, so is Josh Frydenberg’s promised return to permanent surplus and his assurance that his $300 billion in tax cuts and $100 billion in infrastructure spending are fully funded.

The trick has two parts. First, assume (as you did in each of the seven previous budgets) that, within a year or two, the economy’s growth will have returned to the old normal, where it will stay forever.

Second, assume the government will be able to sustain for many years a degree of spending restraint never achieved in the past. Make sure this heroic assumption is turned into a cabinet resolution, so it can be passed off as the seemingly innocuous assumption of “unchanged policy”, not the mere New Year’s resolution it really is.

Swan’s claim (proved by lovely graphs) that his hidden spending plans were fully funded was based on government policy to limit spending growth to 2 per cent real a year on average – a goal he repeatedly claimed to be achieving, but never did.

Frydenberg’s claim (with lovely graphs) that his post-forward-estimates tax cuts and spending increases are fully funded is based on a government policy to limit real spending growth to even less than Swan’s 2 per cent, which will cause total government spending to fall from 24.9 per cent of GDP to an unbelievable 23.6 per cent by 2029-30.

Again, we’ve had to rely on Grattan’s Wood to join the dots the budget papers don’t and tell us Frydenberg’s happy assumptions imply annual spending cuts increasing to about $40 billion a year by the final year. (She has also explained the tricks on which the government’s claim to have limited its real spending growth to 1.9 per cent a year relies.)

Meanwhile, back in the real world, the economic outlook is so strong the Reserve Bank is deciding whether it needs to start cutting interest rates immediately, or can afford to wait until unemployment starts rising.

And continuing strong growth, we’re asked to believe, is Treasury’s best professional judgement.

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Election competition over infrastructure is too costly

The popular view of infrastructure is that we don’t have nearly enough of the stuff, so the more we spend the better for the economy. The sad reality is that every year huge amounts of taxpayers’ money are wasted on infrastructure – and much of the damage is begun in election campaigns.

This is not to deny that well-chosen and executed infrastructure projects contribute significantly to improving the productivity of the economy – its ability to produce more goods and services per unit of inputs of economic resources.

It may even be true that we have a backlog of projects we should be getting on with. But that doesn’t mean we’re not wasting a shedload of money – mainly by building the wrong things in the wrong places.

Sadly, in our messy world, shortages of infrastructure can exist side by side with waste and extravagance. The more money we waste, the bigger the shortages.

Why does this happen? Often because good economics gets trumped by expedient politics. Often what’s good economics lacks sex appeal – spending enough each year to ensure roads and rail lines are well maintained, for instance – whereas politicians are irresistibly attracted to projects that are new, flashy and appeal to the unthinking (radio shock jocks, for example) as just what they think we need.

And because political parties mostly want to use the announcement of new spending projects to win voters’ approval in those electorates they might lose or could win.

That’s why election campaigns are when the seeds of later waste are sown. You think of something that will sound nice, pick a price tag that sounds big but not too big, travel to the right town, don hi-vis jacket and hard hat, wait till the media cameras arrive, make the grand promise – and then wait till you’re elected or re-elected to get the bureaucrats to "do the paperwork" – estimate how much it really will cost and work up some sort of "business case" showing the project’s benefits will exceed its costs.

This, of course, is just the opposite of how you’d go about ensuring every dollar spent was well-spent. Someone suggests a project, you put it to the test. What exactly is the problem you’re trying to solve? How does it rank in importance against all our other problems?

The particular project you’re examining is probably just one way of solving the nominated problem. What are the other options? You compare the various options by making the best measurement you can of each one’s costs and expected benefits to the community, then pick the option where the benefits most exceed the costs. (There may well be some unquantifiable considerations that also need to be taken into account.)

By this point you ought to have a well-informed estimate of the chosen project’s monetary cost. That estimate should allow for the likelihood that not everything will run according to plan.

According to Hugh Batrouney, then of the Grattan Institute, last year the federal government proposed rail links to the (future) Western Sydney airport and to Tullamarine airport. (Note the symmetry. If Sydney’s getting something, better have something similar for Melbourne.)

At the time of announcement, neither project had a developed business case. But the opposition was quick to support the government’s proposal.

Trouble is, a government study found that Western Sydney won’t need a rail link until 2036 at the earliest. In the case of Melbourne’s rail link, the project’s route hasn’t been resolved, let alone its costs, ticket pricing structure or potential benefits.

And Infrastructure Victoria said upgrading airport bus services should be investigated before spending on a rail link – which, in any case, would be much more expensive and couldn’t be delivered for at least 15 years.

Grattan’s healthcare expert, Dr Stephen Duckett, says that when federal politicians promise to build new hospitals in particular places – as both sides have done in this campaign – they interfere with the state governments’ responsibility to plan where the next hospital development should be, so as to ensure access to public hospitals is adequate throughout the state.

Next, take the plan announced in this year’s budget for a national “commuter car park fund” costing $500 million over 10 years, intended to make it easier for people in the suburbs to drive to their local train station.

A group of transport and urban planning experts from the University of Melbourne has written on The Conversation website that half a bil may sound like a lot, but it probably buys only about 30,000 new parking spaces, serving maybe 45,000 extra commuters. That’s just 4 per cent of the Australians who travel to work by public transport.

And, they note, there’s no guarantee the extra parkers would be people who’d no longer go to work by car. Studies suggest a lot of them would be people who formerly walked, cycled or bussed to a different station (where the parking spots are always taken).

The experts suggest it might be better to spend the $500 million on more frequent bus services to stations, and use the car parks for more valuable purposes.

Marion Terrill, Grattan’s transport infrastructure expert, says Labor’s most important promises aren’t the sexy stuff about electric vehicles, but one to ensure Infrastructure Australia assesses projects before the decision to invest in them, and to make the assessed business cases public. Doesn’t quite fit with some of Labor’s latest project promises, however.

"It would be a significant improvement if whichever party wins government next month were to commit to, and follow through on, careful assessment of transport gaps and problems, consideration of the various feasible solutions, and rigorous evaluation of the preferred approach," she concludes.

"And it’s not enough just to do this; it should be done in public." Amen to that.

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