View From The Couch - 21/Mar/2017

It's Not A Bubble If You Don't Call It That

Day after day, there's this concern about the Property Bubble. Looked through the hosing affordability prism, the bubble looks enormous, but looked through the prism of investments, housing-as- asset still looks safe to the majority of investors piling into the market. If you're hoping to get you quarter acre block and raise your kids in the manner that your parents did, in a neighbour that resembles the one in which you grew up, the likelihood has diminished to unlikely to zero chance doing it on your own.

If you're in the real estate racket, then it's in your interest to talk it down like it's not big deal.
This made me laugh:

Australia's banking regulator says the country's housing market is in an environment of "heightened risk", but he won't say there's a housing bubble. 

Australian Prudential Regulatory Authority chairman Wayne Byres told a Sydney conference that he wouldn't use "the B-word" to describe the housing market. 

"I don't use the B-word. I refuse to use the B-word. It implies a binary, that's too simplistic," Mr Byres said speaking at the Australian Securities and Investments Commission annual forum. 

"We are in an environment of heightened risk. House prices are high and particularly in this one (Sydney) they're rapidly rising," Mr Byres said.
"If everyone is not careful the risks are going to rise," Mr Byres said.

Mr Byres said APRA was watching the housing market, but he stopped short of saying the authority would bring in new curbs on investment lending.

I guess it's not a Bubble if you don't call it that. That's a bit like saying Tony Abbott isn't a dickhead because he's not called Dick Head, but Tony Abbott.

"What Bubble?" They Asked

Outside of Sydney and Melbourne, real estate pricing has not risen at the same dizzying rates. Of course, Australia's a very big place but GDP growth is concentrated in pockets. That is to say, there are only a few places in Australia worth being. You can go live in Tenterfield Queensland in a shack priced at 20k, which is the middle of nowhere, for instance, but it is days from amenities one expects of civilisation and if you didn't get your NBN connection out there, why, living conditions could approximate the 19th century more than the 21st.

Something like 8% worth of Australia's GDP's economic activity takes place in the precinct surrounding Wynyard and Town Hall stations. Think about that: 1/12.5ths of Australia's economy converges on 2 railway stations (I happen to know this because I talk to people at the UTS TRC). The whole point of Sydney is to service the 2 stations, and to that end, the public transport system has grown into radial spokes around the surrounding land all the way out to the hinterlands. It grew that way through a combination of factors, some of which included lack of vision by the NSW government; the small-ness of scope given to a precinct known as The City of Sydney which covers these two stations, but nowhere near far out enough to urban coordinate planning or transport planning; the fact that the Sydney basin as a whole had no urban planning for a good two decades in the middle of the 20th century; and general class sniping which has persisted from English Colonial times.

Unfortunately the physical need for participants in the economy to converge on the two stations is so immense it has absolutely warped the perception of value in Sydney. The CBDs of Melbourne and Brisbane also present similar problems. Combined, the central districts of the three cities would contribute to a quarter of Australia' GDP, perhaps a third -all of it sitting in a clutch of about 5-6 train stations. That's a lot of economic activity that needs to be serviced by public transport.

In a sense, it is like light. For every doubling of distance away from these hot cores of the Australian economy, the value of the land would lose by a square root. While this is common sense, the way the property prices have been growing is anything but. If Sydney's economic output as a whole is not growing by 18%, it's hard to justify 18% rises in the property - and that's just comparing like with like. If you compare the GDP output of Sydney with world cities, it is hardly worth the prices its property is fetching. I mean, Sydney's a nice-ish place to live, but it's not that nice. People are having themselves on if they're putting it up higher than NYC, London or even Santa Barbara, California.

Except perspective is very hard to come by when you've decided where you are so damn wonderful, and the market is full of these people. Do you wonder why some people think it's all going to end in tears?

Bad Ideas Still Get To Run

There's this argument going around that maybe first time home owners should be able to access their superannuation in order to put a deposit down for a house. Paul Keating thinks this is a terrible idea. Others are in favour.

The succinct summation of why it's a bad idea is here (take it away, Mr. Keating!):

The average superannuation balance of those aged between 25 and 40 hovers around $45,000. Were this to be taken from a saver's account to be employed as a housing deposit, it would effectively destroy that person's ability to compound any future sum into a meaningful retirement supplement. 

More than that, once the preservation rule has been breached, the whole investment system would be compromised as superannuation trustees were required to make provision for short-term withdrawals from an otherwise, fully preserved system. This would be completely disruptive to professional funds management.

If you look at it from a longer time frame, you'd have to say property prices will not keep going up, or even stay above their historic trend forever. it's doubtful it would stay that way over a working life. The insane price rises we're seeing are based on the delusion that these markets never go down. People are forgetting what an economic contraction looks like, what a recession looks like, and how it impacts prices of things.

It's kind of crazy to pull your money out of diversified funds and stick it into one asset. Not one asset class, but one asset. And then you assume that one asset will keep going up enough that you could liquidate it at the time of your retirement to fund your retirement. If you believe that, I have a bridge I want to sell you. 

View From The Couch - 11/Feb/2016

Barnaby Joyce, Deputy Prime Minister

The world is a cold, hard, cruel place. Then it reveals it has a wicked sadistic sense of humour by presenting us with the spectre of Barnaby Joyce as the next leader of the National Party, and as such will be our next Deputy Prime Minister. I'm sure he's over the moon, but watching this feels more like the lunatic-in-chief has been handed the keys to the asylum. Make no mistake, Barnaby is a 'close friend' of Gina Rinehart and shares her trenchant fascist views. He's a climate change denier and we won't even go into what he thinks about the gay marriage issue.

So it is that you get rid of one Dark Ages throwback Tony Abbott, and somehow the conservatives manage to thrust forward another devotee of Dark Age politics. It's enough to make you lose faith in Australian politics altogether.  It's the one arena where being regressive is rewarded.

Toll Rise, And Opal Hike

The NSW government really has so little control over private roads and public transport.  It's a shame because ostensibly they are in charge, but something strong seems to happen between the high offices of government and the lobbyists who come lobbying them on behalf of businesses looking for a big tender.

Transurban is hitting motorists with a 15% rise in tolls. They're cheering because tollroad operation is the easiest wicket to fleece citizens. Sydney tollroads are the centrepiece of the revenue stream, and transurban ants to build more of these things. It really is the pits.

Meanwhile the government wants to hike the Opal card, hitting up people who use public transport. So if you're lucky enough to have public transport, the government slugs you; but should you live far from public transport and you're committed to driving, the government abandons you to tollroads and tollroad operators.

Sydney is the worst-planned city of its kind in the world.

Work For The Dole Doesn't Work

In other (un-)surprising news, it turns out 'Work for the Dole' doesn't really work.
It's not that surprising really, given that its main purpose is to torture the unemployed and send them to do just anything that resembles paid labour, to justify the welfare being spent. It reflects a very idiotic view of what work is, and what employment truly is.

Now that they know it doesn't work, the government is committed to keep on doing it - which tells you quite a bit about how they think. It's not really all that important for the unemployed to find actual work, it's more important that they be made to do menial things for the satisfaction of people who imagine there is wholesale welfare fraud going on everywhere. I know a few welfare bums, but really, 'Work for the Dole' is just make-work-for-punishment. it doesn't address the underlying issue of why they're welfare bums.

On a more broader note, in the future there will be more unemployment. This is because machines will eat more and more jobs. The robots are coming, AI algorithms are already here. Increasingly, humans will price themselves out of work. There is no plan on how to deal with this phenomenon. You sort of wonder how that is all going to go.

View From The Couch - 27/Sep/2015

Does Privatisation Actually Work For The Citizen At All?

Sometimes I think privatisation of government monopolies gets discussed in a vacuum, free of context so all anybody has to do is fling figures around the abstract and settle on a deal in the abstract, thus letting the chips where they may fall in reality, far from the negotiating room. So far, since the late 1990s when NSW embarked on allowing competition in the marketplace for electricity billings, it has contributed to condition whereby we seem to be getting charged more, thanks to the gold plating going on with the electric companies. this has led to the Australian Competition Tribunal to step in and overturning a decision by the electricity price regulator that would have allowed the electricity price to group even more. Now, that intervention is being contested with a phalanx lawyers, trying to get back to charging whatever the hell they like.

A phalanx of about 40 lawyers representing electricity networks across Australia are attempting to convince three men – the members of the Australian Competition Tribunal – to overturn a decision by the electricity price regulator which would have rewarded NSW households with a $100 to $300 a year saving on their power bills. 

And get this: because the electricity networks in some states are publicly owned, it is taxpayers who will pick up the tab for this legal free-for-all – rumoured to be as high as $90 million – which is also aimed at getting them to pay higher bills. Other states, where the networks are privately owned will also see the effects over time. 

Also present in the room are two barristers for the Public Interest Advocacy Centre which with a modest annual budget of $3 million, is mounting the case consumers should pay even less than the regulator's edict. 

The case has emerged as a fascinating window into just how far our economy strays from the free market ideal. 

Electricity networks are, of course, natural monopolies.
In a competitive market, firms are forced to operate efficiently, and at lowest cost, lest their customers flee to their competitors. 

Without this disciplinary force of a free market, electricity networks require a regulator to hold them to account, impose efficient pricing and keep prices as low as possible for consumers. 

Every four years, the Australian Energy Regulator determines how much electricity networks can charge customers, based on what an "efficient and prudent" business would need to charge in order to cover its costs and make a profit.
Networks costs make up about half your household bill.

And there you have it - the very picture of how the electricity industry is one big rent-seeking enterprise, trying to set prices not by any relationship to the market but by how much it can gouge. It kind of puts to rest any notion that there is any kind competition going on; instead is abundantly clear that it is yet another oligopoly that has the power to set prices any which way it likes. Worse still, the current Coalition Government has created conditions whereby there is minimal investment in renewable energy, so things quickly reduce to minimal choices for the consumer, and every opportunity to collude and set any price they like, for the electric companies.

Compounding the problem further still is the desire by the NSW Government to lease out the poles and wires so they can "build more infrastructure" with the proceeds. So it goes without saying that the NSW Government wants to be able to gouge lots of money so that it looks good on the bottom line for investors to pay up for the poles and wires. Once it goes private, the private ownership will do everything in its power to push up prices to what the market will bear. Again, it is not clear how privatisation actually helps the public. 

It is understandable that as a government monopoly, it is ripe for a sell-off and that the proceeds from the sale are desirable. It just doesn't seem to fulfil the bit where the government is supposed to serve all of its people, and not just the wealthy private interests. 

What Infrastructure? WasteCONnex!?

There's a certain element of predictability about what the state government of NSW does when it comes to infrastructure - it basically builds big budget toll roads first and foremost, and not much of anything else. They do this because General Construction forms a vast rent-seeking lobby whereby they can promise jobs as well as the seeming appearance of progress, by building vast concrete structures. What's truly amazing about the WestConnex project underway is that it is being built without a business case for which to answer. In other words, the government is promising to spend oodles of money on project without really knowing if it is going to be productive or useful, but it's insisting on doing so because the people who stand to make lots of money at the public's expense are their friends. The Government is minimally interested in the collateral damage it is likely to cause, and all of it is centred around the notion that toll roads are good things. 

I won't go into my usual complaint that the nepotism and crony-capitalism is a terrible thing (it is); I won't go into my rant about how medieval and anti-progressive toll roads are in concept (they are); or how self-serving the arguments are in favour of these things (God bless Adam Smith and self-interest); but I do want to point at the urban sprawl these developments are encouraging.

The NSW Government is saying, with its semaphore of policies, "go live out in the boonies 50km away from you jobs. We'll put in toll roads so you can pay $100 a week to go to and home from your jobs. But you get a backyard in a cookie-cutter suburb designed by the lowest IQ architects and town planners we could find." And they're not in the least bit ashamed that this is happening because hey, the electorate is so stupid they think they really want this too. And maybe it does - which goes to show we really get the leadership we deserve.

I've said this before but if you apply the simple cui bono test, you come up with the same old crony-capitalist rent-seeking lobby groups. If somebody goes with a proposal for rail - whether it be a high speed rail system or a metro network - the government offices immediately think they're some train-spotting rail enthusiast nut with little understanding of state finances. It really is quite barbaric. In the mean time it commits us to more cars, and rampant emissions and urban sprawl. If this really is our way of life, we need to change our way of life.

Cars Cars Cars

Speaking of motor transport, the Volkswagen scandal this week has been quite informative. The notion that there can be clean diesel combustion has taken a major hit as Volkswagen admitted to screwing with the emissions test with a bit of software.

I grabbed that screenshot from the WSJ to show just how much VW vehicles are over the various limits.  We don't know if this kind of cheating is widespread, or whether it is just VW/Porsche/Audi indulging in this kind of chicanery. Anybody manufacturing a diesel model is now under a cloud. Sometime ago I read a report that Mazda had built diesel versions of their vehicles and while they could get fuel efficiencies up, it was harder for them to meet emissions targets, which feeds into the notion that maybe there's a lot of motivation to cover up emissions from diesel vehicles. Japanese manufacturers have been much slower in coming up with diesel as a cleaner option - they've tended to explore things like Hybrids, electrics and hydrogen fuelled cars; which tells you something about how hard it is to get emissions down on diesel.

Thus when you look at the overall picture, it is looking less likely that diesel cars are anywhere near as 'clean' as claimed. As a personal side, none of this surprises me. Next to big black German 4WDs, the biggest dickheads on the road seem to be guys driving VWs. You can easily tar the lot of them with the same brush and file them under dickhead consumers, dickhead corporation. 

But hey, we want to build our future cities around dirty big toll roads going out 50km to outer-ring suburbs where people can drive to commute every day. What could possibly go wrong?

Things You See In The Newspapers

Raiders of Anthony And Cleopatra's Lost Tombs

'X' never marks the spot unless it's scripted that way. Archaeologists are digging around 27km west of Alexandria for the resting place of none other than Anthony and Cleopatra.

For years, researchers have been seeking the graves of the famed pair, celebrated in plays and movies. French archaeologists recently said the tombs were in the newly excavated remains of Cleopatra's palace in Alexandria, but they found nothing.

Last year, archaeologists from Egypt and the Dominican Republic found the remains of a cemetery near the temple of Taposiris Magna, 27 kilometres west of Alexandria. The cemetery has so far yielded 27 tombs and 10 mummies. Such cemeteries are common near royal tombs.

The team uncovered a damaged bust of the Egyptian queen, 22 coins bearing her image and a funerary mask that is believed to be of Antony.

Last month, it used radar to find three deep shafts leading to three "spots of interest" under the temple, the Egypt's Supreme Council of Antiquities said.

I guess if and when they do find them, they'll do DNA tests and stuff, and then we'll go look for the closest living relative of the two and make a TV special out of that. Or perhaps not.All the same, I'm interested. It sure beats following BrisConnections. Speaking of which...

We Get The Crap Governments We Deserve

Sydney's a pretty crappy town these days. Gone is the lustre form its halcyon Olympic hosting days. The roads are congested, the trains are crap, the busses are never on time and there's really no easy way of getting around town.

It turns out it's because none of the NSW governments have addressed the underlying issues for decades. No wonder the present day mob is not up to the task - and worse still, the opposition may be worse by dint of ideology.

It's round about now in history where Sydney's lack of investment in public transport is catching up to the city hard and fast.

A FAMILY living in the outer suburbs of Sydney with one parent working in the city will spend as much money running their car as they do on mortgage repayments over the course of a 30-year home loan.

This fact - revealed in a 2005 federal parliamentary inquiry into the sustainability of Australian cities - is the legacy of a rail network that is frozen in time.

Sydney's rail system has remained almost unchanged from the original vision developed by engineer John Bradfield in the 1930s and then updated in 1956. The city is now seeing the social consequences of this in the growing divide between those who have access to transport and those who do not.

The recent decisions by the State Government to dump the north-west and south-west rail links are just the tip of the iceberg.

The head office of RailCorp is littered with blueprints for grand rail projects that never made it off the page. Over the past 15 years the government has promised, but failed to deliver, at least $28 billion of rail infrastructure, including 13 projects that would have provided more than 1000 kilometres of track and dozens of new stations.

Some, such as the Mosman to Mona Vale line, were envisaged by Bradfield himself. More recently, the Government has axed plans for a south-west connection between Strathfield and Hurstville, a fast train between Hornsby and Newcastle and the duplication of the Richmond line.

The physical reminders are easy to see. The Maldon to Dombarton freight line, begun in the early 1980s but dumped by the Greiner government in 1988, lies half-finished and gradually rotting in the Illawarra, and tunnels under North Sydney and St James have been empty for decades.

"There is a problem with NSW treasury not believing in rail in this state and Sydney in particular," says Garry Glazebrook, a transport expert from the University of Technology, Sydney.

"For 10 to 15 years we were able to build toll roads using private sector finance and that relieved treasury of the responsibility."

That the failure to provide new public transport infrastructure is having serious social consequences should not come as a surprise.

Well, d'uh. It's been a long time coming, but it also has to be said the newspapers have been really bad at understanding the ramifications of this neglect that has been going on for a long time. If there's one thing that stops Sydney from being a truly pleasant city. it is the absence of a rail network.

My favorite story is how City Rail got rated the worst rail service of its kind in the world. So they sent their brightest fellow to Switzerland who had the best system in the world, to find out how to do it. Except that once he got there, instead of listening to the Swiss telling him how to do it, he'd insist on telling them how they did it at City Rail. As in, what? The Swiss want to learn how to turn their world-best system into the world's worst system, just like Sydney's?

Rail Corp is full of stories like that. You'd think people would be marching about this instead of bloody APEC or whatever.

Pony's Relatives

As if the story of Pony the Orangutan wasn't sad enough, we find in the news today that her relatives in Sumatra are in trouble. Sumatran Orangutans have it tough.

UP TO five adult orang-utans are being killed for every baby animal illegally captured, according to a new report showing the species faces extinction.

The World Wildlife Fund report says that hunters, who are rarely prosecuted, usually shoot both parents and sometimes other adult members of a colony to catch a baby to sell at markets so it can be kept as a pet or in a private zoo.

But about one in three babies dies before reaching a market because of the trauma of capture or poor transport conditions.

Authorities are failing to crack down on the booming illegal trade in orang-utans and gibbons on the Indonesian island of Sumatra.

The report, released by Traffic - a group that monitors illegal animal trading for the WWF - shows that both species are on the brink of disappearing.

"We're talking about an animal which takes 11 years to reach maturity, then carries its babies for about seven years before weaning, so it takes a very long time for the population to recover, if it does at all," an Australian spokesman for Traffic, Chris Shepherd, said.

"Babies fetch high prices at markets, so when someone is found with an orang-utan or gibbon and it is seized, they go straight out and get another one.

"There is no deterrent. Awareness is not the problem and neither is the law. We have some of the best legislation in South-East Asia but we need an increase in enforcement to stop this."

Pretty bad. Years ago, they had stories of abandoned Orangutans in the streets of Taipei because these pet Orangutans are cute while they're small but turn into dirty big creatures that are too unruly for the urban household. Even that little thing above is going to turn into a sumo-wrestler sized ape. I just don't get the people who think that something like that would make a nice pet.

News That's Fit To Punt

Greenspan's Concession

Alan Greenspan has made one last appearance at the Senate to explain his perspective on the recent financial market turmoil. In the process, he got a right grilling, and had to admit that maybe he had it wrong.

But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

Now 82, Mr. Greenspan came in for one of the harshest grillings of his life, as Democratic lawmakers asked him time and again whether he had been wrong, why he had been wrong and whether he was sorry.

Critics, including many economists, now blame the former Fed chairman for the financial crisis that is tipping the economy into a potentially deep recession. Mr. Greenspan’s critics say that he encouraged the bubble in housing prices by keeping interest rates too low for too long and that he failed to rein in the explosive growth of risky and often fraudulent mortgage lending.

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

On a day that brought more bad news about rising home foreclosures and slumping employment, Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.

He noted that the immense and largely unregulated business of spreading financial risk widely, through the use of exotic financial instruments called derivatives, had gotten out of control and had added to the havoc of today’s crisis. As far back as 1994, Mr. Greenspan staunchly and successfully opposed tougher regulation on derivatives.

But on Thursday, he agreed that the multitrillion-dollar market for credit default swaps, instruments originally created to insure bond investors against the risk of default, needed to be restrained.

I wish I could be wrong the way Greenspan was wrong. 18 years in the top job and having steered the American economy into a succession of bubbles-and-bust scenarios, he's still sitting on a mighty reputation as one of the more successful men on the planet. Not to put too fine a point on it, the man has metaphorically trashed daddy's car three or four times but has never been asked to pay up. Perhaps that is the limitation of metaphors.

It's not all his fault per se, but it is true that a lot of the contributing factors were given the green-light by Mr. Greenspan.

CBD Metro to Rozelle?

Current NSW Premier Nathan Rees announced that he is asking the Federal Government to back a Metro that goes from Town Hall, Martin Place, Barangaroo, Pyrmont and Rozelle.

Plans would then emerge as to an "extension to Macquarie Park and Epping as a second phase" or a "future West Metro as an Alternate second phase".

More detail on the "sequencing" of those lines would be made available in the November mini-budget, Mr Rees

But neither Mr Rees nor the co-ordinator-general in the Premier's Department, David Richmond, could put a costing on the CBD project, despite the fact they had just briefed Infrastructure Australia bureaucrats on it.

Later, the Premier's office advised the CBD metro project would cost $4 billion, one third of the cost of the North-West metro that the former Premier Morris Iemma announced in March.

The NSW Opposition Leader, Barry O'Farrell, said Mr Iemma may have been the "ditherer'' but Mr Rees was the "gibberer'' who had devised the plan "on the back of a lemon squash coaster''.

"I'm wondering if my kids will see this North-West metro ever built,'' he said.

"If it wasn't so serious it would be a joke ... He makes it up as he goes along.''

The metro line would also service the Education Minister Verity Firth's marginal seat of Balmain, a further win for Ms Firth after she won a decision on Callan Park earlier in the week, with Mr Rees announcing it would be kept in public ownership.

Mr Rees said the project was about setting in stone that Sydney would have a metro system.

"By getting appropriate public transport into the Barangaroo development, which everyone recognises will be the heart of the financial district, means that over time we demonstrating to the region and the world that Sydney is not about pulling things out of the ground and mining, it is about financial services and related services and the export of our expertise."

Umm, yeah Mr. Rees. If the plan is to turn Barangaroo into a kind of Wall Street of Australia, then it's definitely going to need its own station. It's a little disappointing the sucker stops at Rozelle. Would be better to at least get up to Drummoyne, which would cut some buses down Victoria Road.

It seems woefully inadequate for a start, but it's a start all the same. The opposition is proably going to inherit this project and stretch it out to the North West any way.

A Thought About Sydney's Public Transport System

I've been taking the Sydney PT for the last 3 weeks since my accident and I'm getting a first-hand look at just what the problem is when it comes to urban transit. Here's my daily trip to work:

- I take a 7min walk to the station, and wait for the bus on average 7-10 minutes.
- Then I ride the bus down Victoria Road over the Anzac Bridge into Town Hall, which takes about 40minutes.
- There, I walk for 5 minutes which includes the ticket buying exercise and going down to the platform.
- The train inevitably arrives within 5 minutes, and takes about 10 to get to Sydenham.
- From there I walk to the office - a 5 minute walk.

All in all, it takes 75minutes to get to work, but none of the steps in of themselves are really that dreadful. It's not even that tiring if I can get a seat on the bus. I inevitably do on the train. The thing is, I'm always aware that the trip to work by car is 25minutes through traffic on City-West Link and Norton Street.

The least reliable aspect of this trip are the buses, and even then, they're not as bad as the press is braying about it. What's really bad is that on a rainy day, Victoria Road clogs up with traffic. It's as if Sydney's commuters are the Wicked Witch of the West and deice that they're going to melt if they don't drive their cars to work. You can easily sit for an hour on a bus on a rainy day - and that's not the bus' fault.

I've been told it's been worse since the Lane Cove tunnel opened. I can well imagine that people commuting in from the North West might opt for going down Victoria Road rather than pay the toll, and who would blame them? If you include the Harbour Bridge toll, you would be paying 5 tolls a day, just to commute.

In fact one of the things the NSW government really should do to ameliorate the traffic situation is to dismantle tolls. That way, people will opt for the shortest distance to work rather than try to rat-maze their way around the tolls and congesting suburban roads. Right now, there's so little rationality in the way the whole thing is set up. People are rewarded for avoiding toll roads; people feel the tolls are a punishment. It's clear the Macquarie Infrastructure model is a crock of shit that has turned Sydney into an urban dung-heap in a matter of 15 years.

The other thing that struck me about Sydney traffic is the fact that Sydney is a lot more diffuse than we think. The urban density of Sydney is actually quite low in parts. Thus, we spend a heck of a lot of our time getting to places driving past interminable rows of 1/4 acre block houses. It's clear that the absence of planning for Sydney - a condition which lasted decades - has come back to bite us. The metro project is only going to begin to address these problems and we may not see the results of it for a long time.