Transport & Catalytic Development. Prepared by

Transcription

1 Transport & Catalytic Development Prepared by

2 Types of Benefits Most common and least contentious Travel time savings Freight, vehicles, bicycles, people Environmental cost savings Emissions, noise, amenity, etc Vehicle operating cost savings Fuel, maintenance, consumables, etc Crash cost savings Fatality, injury, property damage Less common and most contentious Wider Economic Benefits Agglomeration Output change resulting from imperfect competition Labour market tax revenues

3 Wider Economic Benefits Agglomeration: project increases supplier, customer and worker catchments increased productivity Imperfectly competitive markets: imperfect competition allows producers of transport intensive goods & services to lower prices and increase consumption Increased tax collected from labour market: improved travel time and reliability increased participation or upward progression incremental change in tax collected from labour Remains contentious and only likely to manifest in limited number of projects

4 Indicative Benefit Profiles Major Intersection Upgrade Travel time savings Vehicle operating cost savings Crash cost savings Environmental cost savings Wider economic benefits Major Motorway Upgrade Travel time savings Vehicle operating cost savings Crash cost savings Environmental cost savings Wider economic benefits Road Safety Project Travel time savings Vehicle operating cost savings Crash cost savings Major Line Haul PT Travel time savings Vehicle operating cost savings Crash cost savings Environmental cost savings Wider economic benefits

5 Benefits versus Transfers Benefits = change in well being Benefits manifest is many ways Be clear about what drives benefits Don t count them twice! Transfers = shifting benefits between stakeholders

6 Evaluation versus Funding Evaluation: comparing costs and benefits Key Question: Is it a good project? Funding: transferring benefits to providers Key question: How do we pay for it?

7 Funding cart, regularly put before project assessment horse Project Assessment Project Funding Is it a good project to start with? Do we have a funding problem, or are we funding the wrong projects?

8 Transport & Development Opportunities What drives the benefit profile? Who captures the benefits? How are the benefits captured? Can the benefits be transferred? Improved accessibility Improved efficiency Commuters Customers Business Increased leisure time Increased workforce catchment Increased customer catchment Reduced operating costs Taxes & charges Direct involvement

9 Proximity, Accessibility & Intensity The who, how many and the what! Note: shading represents standard Brisbane City Plan zones Intensity & flexibility maximises benefits of proximity & accessibility

10 Capturing Value Principles Be sure there is value created Establish a clear nexus between value created and mechanism applied Target beneficiaries as directly as possible Mechanisms Direct participation (Govt as developer or JV partner) Direct taxes & charges (e.g. benefited area levy) Tax Incremental Finance: earmarking changes in ad valorem taxes within impacted area

11 Tax Incremental Finance ~800m ped shed STARTING ASSUMPTIONS 800m ped shed 25 Impacted properties All equal properties starting value $540k Property values increase 3% per annum Property turnover: 10 yearly Analysis limited to land tax & stamp duty All property is owned by companies SCENARIO 1: PROJECT ASSUMPTIONS Value uplift of Project 10% one off SCENARIO 2: PLANNING ASSUMPTION Planning change adds further 15% one off uplift (assumes project facilitates increased intensity of use) Note: no allowance made for other taxes and charges for simplicity

12 TIF continued $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Tax Take Over Impacted Area Year With Project & Planning Change With Project Without Project Year Without Project With Project With Project & Planning Change Land Tax Stamp Duty Total Land Tax Stamp Duty Total Land Tax Stamp Duty Total 0 $117,000 $43,313 $160,313 $117,000 $43,313 $160,313 $117,000 $43,313 $160,313 1 $123,885 $45,135 $169,020 $147,524 $51,392 $198,916 $182,981 $60,778 $243,759 2 $130,977 $47,012 $177,989 $155,324 $53,457 $208,781 $191,846 $63,125 $254,970 3 $138,281 $48,946 $187,227 $163,359 $55,584 $218,943 $200,976 $65,541 $266,518 4 $145,804 $50,937 $196,741 $171,635 $57,775 $229,409 $210,380 $68,031 $278,411 5 $153,553 $52,988 $206,542 $180,159 $60,031 $240,190 $220,067 $70,595 $290,662 6 $161,535 $55,101 $216,636 $188,939 $62,355 $251,294 $230,044 $73,236 $303,280 7 $169,756 $57,277 $227,033 $197,982 $64,749 $262,730 $240,320 $75,956 $316,276 8 $178,224 $59,519 $237,743 $207,296 $67,214 $274,511 $250,905 $78,758 $329,663 9 $186,945 $61,827 $248,773 $216,890 $69,754 $286,644 $261,807 $81,644 $343, $195,929 $64,205 $260,134 $226,772 $72,370 $299,141 $273,036 $84,616 $357, $205,182 $66,655 $271,836 $236,950 $75,064 $312,014 $284,602 $87,678 $372, $214,712 $69,177 $283,890 $247,433 $77,839 $325,272 $296,515 $90,831 $387, $224,528 $71,776 $296,304 $258,231 $80,697 $338,929 $308,786 $94,079 $402, $234,639 $74,452 $309,092 $269,353 $83,641 $352,995 $321,424 $98,081 $419, $245,054 $77,209 $322,263 $280,809 $86,674 $367,483 $334,442 $102,484 $436, $255,780 $80,048 $335,829 $292,608 $89,797 $382,405 $347,850 $107,019 $454, $266,829 $82,973 $349,802 $304,761 $93,014 $397,775 $361,661 $111,690 $473, $278,208 $85,985 $364,194 $317,279 $96,679 $413,958 $375,885 $116,502 $492, $289,930 $89,088 $379,018 $330,173 $101,040 $431,213 $390,537 $121,457 $511, $302,003 $92,284 $394,286 $343,453 $105,532 $448,985 $405,628 $126,562 $532,190 Net Present Value of Incremental Tax Take (4% real discount rate): With Project: $506,866 With Project & Planning Change: $1,274,928 But, its not manna from heaven Incremental tax take would need to be earmarked Forward estimates already assume some value uplift: based on historical tax growth that includes previous value uplifts not earmarked

13 Summary Avoid putting the funding cart before the project assessment horse Need to understand what is driving benefits Be aware for the pervasiveness of double counting Avoid letting funding opportunity dictate program roll-out Value uplift higher where there is intensity and flexibility in planning system (e.g. centres, high density residential, mixed use) Opportunity exists to transfer value created