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Tuesday, March 22, 2011

Ideology Trumps Common Sense

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It's said a picture is worth a thousand words. Take a look at these graphs and see if you can make any sense of the government's response to oil prices rising and it's transport policy. Damned if I can.
(hat tip to Auckland Transport blog and frog blog)

Traffic volumes on State Highways have not increased since 2005.

The pink line is heavy traffic, the blue line is all traffic. Source: New Zealand Transport Agency

Patronage of Public Transport in Auckland has increased since 2005

Source: ARTA

Spending on improvements to State Highways has increased dramatically since 2006, but spending on public transport and road maintenance has languished

Source: Cabinet papers.

And if you are still unconvinced about the connection between fuel prices and a recession in the New Zealand economy - take a look at the graph compiled by Marty G at The Standard

"Of the 8 quarters in which petrol has averaged over $1.77, 5 were followed by a quarter of recession and the other 3 were followed quarters with 0.1% growth. Of the 17 quarters where petrol was below $1.77, the economy shrank once in the following quarter, was flat once, and grew 15 times."
With petrol at around $2.15 a litre and rising, and leaking billions out of our economy and wallets, and with the transport trends staring us all in the face - why would a government that prides itself on good economic management be so myopic and not have a plan? Ideology trumping common sense?


Susan Krumdieck said...

I was at the Hillary Symposium late last year. Cameron Bagrie, ANZ Chief Economist, was one of the speakers. I asked him about the effect of oil price on the economy and global recession. He said there is no relationship between oil and the economy. So there you go - don't worry!

Denis Tegg said...

aaaaah economists... the fount of all knowledge...they forsaw the last global recession and this next one will be due to the earthquake

Tim Jones said...

Two other things to consider: (1) The Government's roading policy is primarily designed for the benefit of the trucking lobby - there's a reason the Road Transport Forum makes large donations to political parties, and appoints former National and ACT insiders as its CEO. Trucking firms and construction companies are the big beneficiaries of the Government's roading plans. (2) I think the Government has bought Don Elder's line - which I've heard him state in public - that the answer to peak oil is to dig up Southland lignite and convert it into diesel - plans with which Solid Energy is proceeding apace. This Government is not interested in the climate consequences of such a course of action.

(There's more on the campaign against Southland lignite mining at

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