There is no such thing as free parking – the question is, who is bearing the cost? Actively omitting from charging fees for parking is a management cost, the cost is off set by the owner of the premises.

The Western Australian Department of Planning (DoP) released a discussion paper last year on activity centre parking. This discussion paper addresses the issues for paid for parking and how to implement paid parking in various activity centres. The document takes into consideration the State Planning Policy 4.2’s address to the parking management at primary, strategic metropolitan and specialised activity centres. Many factors “contribute to demand for access to the road system and influence time, location, duration and frequency of congestion on the road system within Perth and Peel Region”(Activity Centres Parking Discussion Paper, 2011).

The document then goes on to mention the application of good parking supply and management principles which are aimed to encourage the efficient use of available parking resources, while at the same time, influence where, when and who uses the road network.

Parking requires land, which is a scarce resource. The cost of building a single car park (individual space) is huge (approximately $20,000 according to the DoP).

“Managed parking, including limits on supply, is intended to encourage those with viable alternative options to change from driving”. According to the DoP, the solution is to put a quota on car parking for activity centres. The methodology for determining the quota (Perth planned for a population of 3.5 million) is to remain under lock and key with the department. This makes it difficult to negotiate parking in the future, and assumes that the quota set now is correct, and must remain correct forever.

Lets use Murdoch activity centre as an example. The quota does not allow for the exchange of unused parking bays by one activity node (St John of God) to that of another (Murdoch University). This means that if the department is wrong in their allocation, then the demand for parking is not met by the market; there is an inefficient allocation of finite resource. Rather than implanting such rigid controls on quotas, the parking at an activity centre may be capped. If an activity node has excess supply of parking, they may trade this resource for another activity node to meet the markets demand.

Limited supply at an activity certainly dictates the amount of parking available, however, the vision of the activity centre should also be essential in determining the amount of parking allocated.

• Set outcomes required based on the ‘vision’ of the centre, particularly in terms of the user mix, activity diversity, activity intensity, employment and accessibility
• Let market allocate resources (constrained by outcomes required above) – by enabling exchange (trade rights) at market price
• Continually measure and report (benchmarking)

The World Value Survey Cultural Map 2005-2008

The above is a fascinating representation of the values of different countries. Interestingly, the distinctive groupings demonstrate that values are fairly similar across geographical areas.

World Value Surveys were “designed to provide a comprehensive measurement of all major areas of human concern, from religion to politics to economic and social life”. A significant thing that Inglehart found when studying the data is that two main dimensions dominate – Survival/Self Expression values and Traditional/Secular-Rational values.

The dimension relating to Survival/Self Expression Values correlates with a shift from industrial to post-industrial societies, in which wealthier countries that no longer have to worry about physical and economic security (the nitty gritty of day-to-day survival) are able to place a much greater focus on quality of life and self-expression.

Traditional/Secular-Rational Values primarily reflect the importance of religion within countries, with traditional societies prioritising respect for authority and family values (citizens more often opposed to abortion, divorce, gender equality and homosexuality).

Over time, the surveys have identified that as societies become wealthier and begin to prioritise self-expression, they also start to question traditional values. This often involves transition to greater tolerance of diversity, respect for individual freedom, democratic decision-making and an emphasis on values such as creativity.

When people have a greater input into how their society is run, they experience greater trust in authority and institutions and a greater sense of mutual responsibility. This enables political and economic systems to perform more effectively and better reflect the needs of the people, which in turn generates further wealth and economic development.

Once again we can see that measurement of a broad range of indicators (including some seemingly intrinsic values) can produce important insights into how societies operate and interact – enabling decision-makers to make much better informed decisions about how to influence positive change.

Source: Ronald Inglehart and Christian Welzel, “Changing Mass Priorities: The Link Between Modernization and Democracy.” Perspectives on Politics June 2010 (vol 8, No. 2) page 554. www.worldvaluessurvey.org

Thanks and credit to Professor Scott E Page of the University of Michigan for a fascinating course on ‘Model Thinking’ that inspired this blog.   (https://class.coursera.org/modelthinking/auth/welcome?type=logout&visiting=%2Fmodelthinking%2Fclass%2Findex)

Australia is a country of inter-industry subsidies. We have a long history of taxing efficient industries from which large government revenues are derived – to hand out cash to inefficient, uncompetitive industries. In the post-war era, the car industry was protected with import tariffs and supported with government handouts – because to have an Australian car was a badge of nationhood in turbulent times. This was (and still is) a triumph of self-delusion of economic reality.

Over the past decade there has been only marginal growth in manufacturing output, and manufacturing employment has fallen. Manufacturing is still a structurally important sector – it employs 950,000 people and accounts for nine per cent of GDP – but it has lost its way strategically. In a world of the high Australian dollar, it is pointless to continue to produce large scale, standardised manufactured goods with no innovation content. We have neither the required cost base, nor the innovation capacity to compete with better-equipped economies. So let’s move on.

What we can do it to be a supplier of manufactured goods that build on our comparative advantages. We have an educated workforce, the ability to design and make sophisticated manufacturing equipment, a strong research and development capacity for developing new products – and a structural competitive advantage in mining equipment and processes and high-quality food manufacturing.

It is inevitable that the high Australian dollar, which makes manufactured exports price-uncompetitive, will result in one of two outcomes.

This shift is already evident in the ABS business characteristics survey – which shows strong recent growth in some categories, including specialised industrial manufacturing and professional and scientific instruments. By contrast, motor vehicle exports and construction exports are sharply down.

But what is the role of public policy in aiding the required transition from 20^th century large-scale manufacturing to 21^st century human capital innovation? First, the government must promote flexibility in labour markets. Second, it must work to reduce input costs and promote economies of agglomeration around Australia’s distinct and enduring competitive advantages. Third, it should focus its innovation resources not at propping up dying industries, but in backing emerging, knowledge-based manufacturing. Finally, it must recognise and incentivise the commercial linkages between institutions of research (especially universities and the CSIRO) and institutions of commerce.

This is the only viable pathway to a prosperous manufacturing industry in 20 years’ time.

Treasurer Wayne Swan has recently shifted his attention away from the Labor leadership prize fight, to a fight against the rich. While the prize fight will undoubtedly see a rematch before we know it, the phoney class way will only lead to a singular, definitive result – alienation of the Australian public and erosion of the political mandate of the Labor Party.

The basis for Mr Swan’s attack on very wealthy Australians is that “rampant money making… is dissolving the social contract between the rich and the rest” – the contract John Maynard Keynes claimed was the basis for the survival of capitalism.

Keynes was the most famous and influential economist of the 20^th Century and his fiscal “pump-priming” policies are the basis for the current government spending epidemic in the name of economic stimulus (think the Building the Education Revolution program and the National Housing Insulation Scheme). Keynes was also a very rich individual, so he was fully aware that wealthy people pursue vested interests just like most others in the community. Property developers, real estate agents, pharmacists, newsagents, to name a few, try to carve out a territory and protect it in the pursuit of self-interested profits. Heck, even politicians allocate society’s scarce resources to industries (e.g. car manufacturing) and geographic locations (e.g. marginal seats) as mechanisms to ensure their political future. Not only is it hypocritical to point the finger at the self-interest of a few wealthy entrepreneurs, it is also counter-productive. While this government props up inefficient manufacturing industries in their own self-interest, using tax revenue from the high-profit, high-productivity industries (through mechanisms like the new mining tax), it is weakening the structural base of the economy.

The belief that government is omnipotent, and can control the economy and society through its policies, is evident in such claims as “this government has created 750,000 jobs since we came to office” made by the Treasurer.

Given that the total jobs created since the 2007 election (when the Labor Party came to power) numbers 750,000, the Treasurer appears to be taking the credit for every single new hire over that period. Of course this is nonsense. The only jobs the Federal Government has created are those new employees it has hired to work in it various portfolios – and most of those are in Canberra. What Mr Swan may be able to claim is that his government’s policies partly created a suitable environment for business activity to grow, resulting in increased employment.

Keynes understood that self-interest is part-and-parcel of capitalism, and government intervention in the economy was not always the right course of action. An economy made up of self-interested individuals acting rationally in a fair and open competitive environment, and a functioning price mechanism, is not only more efficient, but also more likely to lead to favourable social outcomes than one run by government – no matter how well-intentioned.

So Mr Swan would be better off focusing on creating the conditions for long-term economic growth, with many more millionaires and high average wages, than his current pre-occupation with short-term wealth re-distribution, underpinned by attacking our most successful entrepreneurs.