Who pays for PT?


One of the issues I have to deal with all the time, as a vaguelly left kind of guy (well, OK, personally I'm pretty socialist, but in terms of my work ideals I'm a bit less soggy) is how to deal with issues of privatisation

Now, I normally regard those who spew about this issue as being little more than the spawn of thatcher, but they do raise an interesting point or two in their spew.

One of their points is usually: "Why should the state pay for public transport? Why shouldn't it be like any other company and make a profit all by itself?"

Well, I'm going to tell you exactly why that's a load of right-wing bollocks and why your taxes should pay for your secretaries bus fare.

To be a proper business, you need to charge people who use your services. You need to charge an amount which at least covers your costs and preferably gives you some profit. Nobody would disagree with this. This is the model of the corner shop, or any small business. The Thatcherite loons would put this forward as the model for all businesses.

This is fine for a the situation where a small business can simply reclaim its costs from its customers. Where the business has a very simple investment in infrastructure (just the shopfront), and the only benefits of the business are directly between the owner and the customer. The customer gets a benefit from the supplier and the supplier's costs are entirely paid by the customer.

Unfortunately, when you're talking about big infrastructure projects, the interaction is not just between the customer and the operator. The user's benefit is that they have access to parts of the city they didn't have before. There's an additional benefit: their employers have access to staff who previously couldn't afford to get into their workplaces.

So, employees can apply to a range of jobs they couldn't get to before, and employers have an expanded range of employees to help them make money.

Now, why should the employee pay all the costs of the transaction, when someone else is also benefiting from the transaction? Shouldn't the employer have to pay a little something for the benefit of the system providing easier access for potential employees?

If a single company builds and runs the system, they can't properly charge all those who benefit from the system. The farebox can't deal with the benefits that the employer gets.

To make sure that all, both employers and employees, pay the costs of supplying the system, and enjoy the benefits of using the system (and of employing people who use the system), it really does require that the scheme be built, run and administered by the government, so that a certain element of taxation pays for the system.

For the employee, most of the cost they pay should be to the farebox. For the employer, most of the costs they pay should be in profits tax. In a place like Hong Kong, many employees are also employers.

so what am I saying? I'm saying that the Thatcherite notion that the government shouldn't pay for infrastructure (and especially for PT access to major work areas) is complete bullshit, and that everyone profits by properly charged public transport and improvements to public transport.

The only people who benefit from privatised Public Transport are the firms who operate it. And they profit at the expense of every employee who uses it, end every employer who relies on it to get their employees into the office.

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This page contains a single entry by dave published on July 4, 2007 1:47 AM.

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