User Pays

First published in Column 8 on the 30^th January, 1991. In spite of my last paragraph, it’s possible that my understanding of economics really is at fault – depending on which economist you trust. The ‘tip’ mentioned early on is/was the local City-owned rubbish dump, or landfill, as it's now more euphemistically called.

It seems our city councillors have a desire to follow in the Government’s footsteps with the user pays approach to life that’s bedevilled us in recent years.

Don’t get me wrong, I think user pays has its merits, as long as it’s applied fair and square. I won’t get on my hobby horse – today – about the unfairness of many user pays ideas that former government departments now take.

But let’s look at the way our city fathers have applied user pays principles to a couple of local matters.

Firstly, the tip. At a recent meeting, much to their amazement, the councillors found the tip hasn’t made the large amount of money they expected since they brought in the new user-pays-type charges.

I’m more amazed that piles of rubbish haven’t appeared in various bush areas round the city. In fact, I think Dunedinites have been very self-controlled in regard to rubbish.

I have seen a few people trying to drop large bags of refuse into the bins meant for ice-block papers outside shops, but nothing else.

Wherever it’s all going, it certainly isn’t pouring into the tip in droves the way it used to, much to the consternation of the councillors.

So what’s been the city’s reaction? Rather than being pleased that people are re-thinking their dumping habits, these worthies have decided to put up the charges!

Somehow or other it means that if people don’t use a service, then the answer is to charge more.

I should have guessed that would be the reaction. The Council has already been practicing this approach in another department for some years. I mean public transport.

People aren’t using the buses, says Councillor A. Put up the prices! says Councillor B.

Huh? says A, won’t that make them even less likely to use the buses? User pays, says B. (Through the nose, was it?)

Fewer people are using the buses, says Councillor A. Cancel some buses on all routes, says Councillor B.

What? asks A. Won’t that force people to bring more cars into town? Yes, says B, but then all those lovely parking meters we’ve littered over the landscape will get used. And the revenue from parking meters is much greater than the revenue from the buses.

Hang on a minute, you councillors. Let me make sure I understand what you’re saying. If a shopkeeper has wares he can’t sell, he puts the prices up. Is that it?

Of course he doesn’t – market forces will insist he puts the price down – or go out of business.

Well, how come that doesn’t work with businesses run by the city?

Wouldn’t it make sense to put the price of entry into the tip down, and encourage people to use it, rather than encourage them to tip stuff just anywhere, which is what’s going to happen soon?

And wouldn’t it make sense to put the price of bus fares down to the lowest possible level, add more buses, and thus encourage people not to use their cars? (Especially if we have a possible oil crisis?)

I went to an economics class a few years ago, and I know I was a bit slow at it. Sometimes, however, I wonder if the City Council and I work from totally different textbooks.

Landfill
Courtesy Colin Babb UK

Update in 2025. The tip is now an apparently successful commercial operation, but many other things have changed in terms of rubbish collection – most notably recycling. The City Council no longer runs the buses. For some reason the Regional Council does, and they don’t seem to be a lot more successful at the job than the local Council was.