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Title: Luxembourg to become first country to make all public transport free
Source: The Guardian
URL Source: https://www.theguardian.com/world/2 ... make-all-public-transport-free
Published: Dec 6, 2018
Author: Daniel Boffey
Post Date: 2018-12-06 10:46:28 by Willie Green
Keywords: None
Views: 122
Comments: 16

Government seeks to prioritise environment and end some of world’s worst traffic congestion

Luxembourg is set to become the first country in the world to make all its public transport free.

Fares on trains, trams and buses will be lifted next summer under the plans of the re-elected coalition government led by Xavier Bettel, who was sworn in for a second term as prime minister on Wednesday.

Bettel, whose Democratic party will form a government with the leftwing Socialist Workers’ party and the Greens, had vowed to prioritise the environment during the recent election campaign.

On top of the transport pledge, the new government is also considering legalising cannabis, and introducing two new public holidays.

Luxembourg City, the capital of the small Grand Duchy, suffers from some of the worst traffic congestion in the world.

It is home to about 110,000 people, but a further 400,000 commute into the city to work. A study suggested that drivers in the capital spent an average of 33 hours in traffic jams in 2016.

While the country as a whole has 600,000 inhabitants, nearly 200,000 people living in France, Belgium and Germany cross the border every day to work in Luxembourg.

Luxembourg has increasingly shown a progressive attitude to transport. This summer, the government brought in free transport for every child and young person under the age of 20. Secondary school students can use free shuttles between their institution and their home. Commuters need only pay €2 (£1.78) for up to two hours of travel, which in a country of just 999 sq miles (2,590 sq km) covers almost all journeys.

Now, from the start of 2020 all tickets will be abolished, saving on the collection of fares and the policing of ticket purchases.

The policy is yet to be fully thought through, however. A decision has yet to be taken on what to do about first- and second-class compartments on trains.

Bettel only just scraped back into government in the recent election. Opinion polls before October’s poll had indicated that the Christian Social People’s party (CSV) – led for 19 years by the European commission president, Jean-Claude Juncker – would end Bettel’s five years as prime minister.

The CSV, however, lost seats, while the Greens gained three seats. The result gave the coalition 31 seats in the 60-seat chamber.

The policy of the new government that has caused the most debate, however, has been that of legalising the purchase, possession and consumption of cannabis for recreational use.

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#1. To: Willie Green (#0)

Free public transport makes a great deal of sense in a situation like this. Pollution relief, which is apparently the government's focus, will certainly occur, to a degree, but the bigger effect is more subtle, and more important. Very crudely: a half million people each losing 33 hours a year in traffic jams is 16.5 million lost man-hours of work, or shopping or eating or other economic activity. That is essentially a full work week lost. A work week is just a touch under 2% of a nation's economy. So, traffic jams are devouring 2% of Luxembourg's GDP.

Now then, Luxembourg's GDP is about $63 billion dollars, so the cost of traffic is $1.2 billion a year in lost economic activity.

I was unable to find the budget for Luxembourg's transport system. The New York MTA's annual budget in 2017 was $18 billion (so, the economy of Luxembourg is about 4 times as big as the New York subway budget - to give an idea of the differences in scale!). 5.7 million people ride the New York MTA every day, compared to 400,000 on the Luxembourg system. And, of course, the NYC MTA is vastly more complex, as New York is built on a series of islands, so there are tunnels, bridges and a ferry system to be maintained. Luxembourg has a river in it, nothing more.

Still, without accounting for the greater challenge of Metro New York transport, the NYC transport budget, scaled down to Luxembourg sise, would be about $1.2 billion per year, the same as the cost of loss of GDP to the traffic jams.

That looks almost like a wash, but it isn't. First of all, there is the significant diminution in pollution, in human stress (which leads to medical costs) and the improvement in quality of living. There's also all of that gas money that goes back into the pockets of civilians, to be spent.

Four fifths of gas prices in Europe are taxes, so reduction in gasoline purchases mainly means a reduction in taxes, not a loss in revenue to the private economy. Likewise, that shift of 1.2% of the economic from passive loss: siting in traffic, means 1.2% more work and more shopping. The private economy will grow by that, which means more money to spend in private hands. If we assume that the taxes in Luxembourg are at European norms of about 40% of income, total, increasing the economic activity by 1.2% means increased tax revenues of 0.48 billion, which means that the net impact to the Luxembourg treasury will not be the $1.2 billion in cost for public transport, but only on the order of $0.7 billion, in exchange for reduced pollution, reduced health care costs, greater quality of life, and greater private income.

There's a further consideration. Using NYC as the model again (and the cost of running the MTA in NYC is much higher than most other places because (1) Bridges, tunnels, islands, and (2) it runs 24/7. The transport systems of other countries do not run all night), 6% of the cost of the running the MTA is fare collection.

Without that cost, if Luxembourg's system casts $1.2 billion per year to run, in our model, it will only cost $0.6 billion net to operate.

In short: on balance, it is not a crasy idea for Luxembourg to make public transport free.

Philosophically, road and transport infrastructure is a cost of government everywhere. Making public transport free does not come at a particularly high net cost. The absolute cost of running the system drops by about 6% when you don't collect fares, and the net positive effect on the economy as a whole, both in terms of regained man-hours and in health terms, is substantial.

Certainly it means reduced revenues to the government, which has to find the money to pay for the trains from other taxes, and not by directly charging the passengers on the system.

The lowered cost of medical care from getting people out of cars and reduced pollution is probably where you make back nearly all, all or even more money. If I were running Luxembourg, I would do it.

Vicomte13  posted on  2018-12-06   13:49:32 ET  Reply   Trace   Private Reply  


#2. To: Vicomte13 (#1)

Good, thoughtful analysis... Thank-you!

Willie Green  posted on  2018-12-06   18:30:55 ET  Reply   Trace   Private Reply  


#3. To: Willie Green (#0)

"A decision has yet to be taken on what to do about first- and second-class compartments on trains."

Oh, that's easy. For a country with enough excess cash floating aroung to make all public transportation free, make all the compartments first-class.

misterwhite  posted on  2018-12-06   18:36:44 ET  Reply   Trace   Private Reply  


#4. To: Willie Green (#0)

It is home to about 110,000 people, but a further 400,000 commute into the city to work. A study suggested that drivers in the capital spent an average of 33 hours in traffic jams in 2016.

So lets say the average working person does a 40hr work week like what we do here in the states that averages out to be them being in traffic for 8 minutes per day.

Maybe they should try out the traffic in the big ghettos we have in this country where the average time spent in traffic is over an hour each way!! When I lived in Denton and had to work at the VA hospital in S. Dallas it was a straight shot 40 mile run for me one way. If I went before rush hour it would take me about 35 minutes to make the trek, during rush hour over 2.5hrs. I found out it was faster to go down past the race track and into Ft Worth then cut across which was 100 miles but only took 90 minutes during rush hour. I saved an hour but drove over twice as far, don't you just love it.

Vegetarians eat vegetables. Beware of humanitarians!

CZ82  posted on  2018-12-06   18:50:27 ET  Reply   Trace   Private Reply  


#5. To: Vicomte13 (#1)

it will only cost $0.6 billion net to operate.

So when public transportation is free, you don't expect any increase in ridership? What about the half-million who will no longer be driving? Will they walk to work?

Won't they have to double the number of trains and busses to accomodate a doubling (or more) in ridership? How much will that cost?

And what do they mean by "free"? Aren't the citizens of Luxembourg paying for it through their taxes? How will those citizens react when they're told that they now have to pay for the 200,000 people living in France, Belgium and Germany who use their public transportation?

misterwhite  posted on  2018-12-06   18:51:01 ET  Reply   Trace   Private Reply  


#6. To: misterwhite (#3)

Oh, that's easy. For a country with enough excess cash floating aroung to make all public transportation free, make all the compartments first-class.

Don't forget the champagne and caviar, oh and some toilet paper in the bathrooms.

Vegetarians eat vegetables. Beware of humanitarians!

CZ82  posted on  2018-12-06   18:51:44 ET  Reply   Trace   Private Reply  


#7. To: CZ82 (#6)

Don't forget the champagne and caviar, oh and some toilet paper in the bathrooms.

Sure. Why not? It's free, isn't it?

misterwhite  posted on  2018-12-06   18:56:02 ET  Reply   Trace   Private Reply  


#8. To: Willie Green (#0)

42% income tax, 25% Social Security tax, and a 17% sales tax (VAT).

misterwhite  posted on  2018-12-06   19:12:08 ET  Reply   Trace   Private Reply  


#9. To: misterwhite (#7)

Sure. Why not? It's free, isn't it?

They'll either print more money or steal more from the responsible, so why not what the hell.

Vegetarians eat vegetables. Beware of humanitarians!

CZ82  posted on  2018-12-06   19:12:54 ET  Reply   Trace   Private Reply  


#10. To: misterwhite (#8)

It's a progressive income tax, so everybody in Luxembourg isn't paying 42%.

The US income tax is 37%, top rate. Few people pay it.

Vicomte13  posted on  2018-12-07   9:49:19 ET  Reply   Trace   Private Reply  


#11. To: Vicomte13 (#10)

We should just give all of our money to the government. Then they can decide what we need and get it back to us.

A K A Stone  posted on  2018-12-07   10:01:42 ET  Reply   Trace   Private Reply  


#12. To: Vicomte13 (#10)

It's a progressive income tax, so everybody in Luxembourg isn't paying 42%.

Since the average salary in Luxembourg is $80,000 per year I'm guessing most pay very close to that.

misterwhite  posted on  2018-12-07   10:07:51 ET  Reply   Trace   Private Reply  


#13. To: A K A Stone (#11)

We should just give all of our money to the government. Then they can decide what we need and get it back to us.

They know best, right?

misterwhite  posted on  2018-12-07   10:08:26 ET  Reply   Trace   Private Reply  


#14. To: misterwhite (#13)

They know best, right?

To hear Leftards tell it yes they do, problem is reality is so much different.

Vegetarians eat vegetables. Beware of humanitarians!

CZ82  posted on  2018-12-07   17:33:07 ET  Reply   Trace   Private Reply  


#15. To: misterwhite (#12)

Yep - Luxembourg has high taxes, on very high salaries, in a place that has one of the highest standards of living in the world...and they've got a great deal of what many here would call "socialism" going on there - schooling and health care and public transportation in a country where most people are richer than Americans, better educated, healthier and live longer, with virtually no crime. Yeah, a real socialist shihole, thank God we're nothing like THAT!

Vicomte13  posted on  2018-12-11   6:47:14 ET  Reply   Trace   Private Reply  


#16. To: Vicomte13 (#15)

Let me guess -- you're a travel agent.

misterwhite  posted on  2018-12-11   9:34:30 ET  Reply   Trace   Private Reply  


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