Insights: The cost of cheap decisions

Last Updated : 01 Feb 2019
Harbour Bridge

Auckland ratepayers continually expect better levels of service and reduced environmental impact – as they should. However, at the same time the council is under pressure to keep rates as low as possible for ratepayers. This rational approach creates difficulty when decisions made decades, or even a century ago, are still having negative impacts today, says Shane Martin in this month’s Insights paper from Auckland Council’s Chief Economist’s Unit.

Avoiding repeating the short-sighted decisions of the past, may cost more in the short-run, but past experience shows the need for rigorous analysis of our infrastructure and policy choices to consider the immediate and long-term impact on Auckland, and the need to think big in our planning to avoid under-provision.

We often harken back to the ‘good old days’, but nostalgia has a way of distorting our memories by omitting the unpleasant parts. In fact, many of the decisions that were made in the past, especially around environmental and transport issues in Auckland, are inconceivable in retrospect and carried huge inter-generational costs.

A tunnel for trains in Auckland was proposed as early as the 1920s, but was dismissed as too expensive. It has taken until now, with City Rail Link, for construction to begin. Similarly, in the 1950s a decision was made not to electrify Auckland’s rail lines and invest in motorways instead, delaying electrification until 2015.

Auckland’s vast network of electric trams that operated from the early 1900s was dismantled by the late 1950s. Now, the proposed light rail projects, at a cost of billions of dollars, will be bringing back some of the routes that existed a century ago, but were gotten rid of during the heyday of the automobile.

Each of these decisions severely stunted the growth of public transport in Auckland. Imagine how different and accessible Auckland would be today, had we more far-sighted decisions all those decades back.

Auckland’s Harbour Bridge is another good example of this – a design that was compromised on the grounds of cost. When the Harbour Bridge was opened in 1959 it was almost immediately over-capacity. Ten years later, the clip-on lanes that were added had a cost that far exceeded what it would have taken to build a bigger bridge in the first place.

Learning lessons from the past

Considering the environmental impacts and the huge cost to fix the decisions made in the past highlights two things.

First, the growth of Auckland has inevitably exceeded the expectations of the planners of the day.

We need to think big in our infrastructure and city planning. It’s easier to slow down the rate at which we deliver infrastructure than to speed up or try to retrofit. If our forebears had thought about the fact that people might live in large numbers near the Manukau Harbour, they wouldn’t have run slaughterhouse effluent directly into it. We’d have built a bigger cross-harbour bridge if we thought about how it would induce demand for travel to the north of the city.

Second, we need to make good, economically rigorous decisions today. And by economic, we mean the real definition of the word – decisions that maximise the financial, environmental, social, cultural and community wellbeing of all Aucklanders today and into the future. In many cases, this will mean taking the long view and avoiding the cheap and dirty decisions that we may later regret.

Shane Martin is an economist at Auckland Council.

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