hopefully the shinkansen will drop fares to compete.

SHinkansen fares are set by the government. It will be up to them.

FT, roads are not free it is just that the users of those roads no longer have to pay for them directly. They will be paid for in higher taxation.

I understand that but perception is a big number in the equation.
The Japan way of thinking of if you dont use it you dont have to pay
for it doesnt really work. This should slow down some stupid construction
projects on the highways as well.

Let the backpedalling begin!

Government to slash funding for toll-free expressway plan
The Yomiuri Shimbun

The government has decided to drastically cut its fiscal 2010 toll-free
expressway budget plan from 600 billion yen to several tens of billion of yen
by possibly limiting the scheme to Hokkaido alone, The Yomiuri Shimbun learned
Wednesday.

The toll-free plan was one of the Democratic Party of Japan's key campaign
pledges in the House of Representatives election this summer.

However, as the country's tax revenue for this fiscal year is highly likely to
decrease to around 37 trillion yen, the government has been forced to renege on
a key policy in a bid to prevent further deterioration of the economy.

The government also is expected to review other major policy pledges, such as a
program to compensate farmers' income.

At a meeting held at the Diet Building organized by former lawmakers Wednesday,
Prime Minister Yukio Hatoyama indicated that the campaign manifesto could be
modified according to circumstances.

"I'm not sure if it's right to force things onto the public that they don't
want, even though we effectively drew up a contract with them [through the
manifesto]."

Hatoyama said budget funding for the toll-free plan would be greatly reduced in
the next fiscal year.

"It seems [the toll-free] policy isn't that popular," the prime minister said.
"We want to see the extent to which the policy can bring about positive
economic effects by making expressways toll-free in selected areas."

(Dec. 3, 2009)

It was inevitible. A concentrated population like Japan cannot support free roads. Better yield management pricing to would have been a much better solution. Japan's economy is built on light inventory, just in time delivery requiring a working road network. Creating traffic jams that rival manilla or Jarkata would have been another step backward to becoming as efficient as say, the Phillipines or Indonesia. It was never a viable policy economically or practically. In fact, it wasn't a big deal politically either. The LDP were voted out more so than the DPJ was voted in.

That is sure gonna come back to haunt them.
Places like mine needed cheaper ways to get customers.
Once again only the rich or well off will be able to make the trip.

Actually, they are coming to the realisation that making free roads would have come to haunt them more. The country cannot afford it fiscally, the economy cannot support the inefficiency it would have created and politically it wasn't that important anyway. The regional tourism constituency is not quite as strong as the urban manufacturing constituency. A tied up delivery truck is a LOT more expensive for a corporate than a road toll.

That will just force more people into urban areas now wont it. A road system that is well priced fine but 200 bucks for a round trip is a rip off. Once again the rich rule the world.

A road system that costs 200 bucks and still is running over its optimal cacity is not a rip off, it is in fact, under priced. Also, Japan is the front runner in the rich world for transferring wealth from urban centers to the regions. In no other industrial country is there a higher rate of wealth transfer from where wealth is created to where it is wasted. As such, the average tokyoite/osakaite etc already sends a dispropotionate amount of his income into the outer regions through taxation. That the wealth is used for make-work construction projects rather than something that might make living in the regions more palatable is not an issue of rich vs. poor but one of inneficient allocation and vested interest. Tell me, why is it more fair to make the road service free and thus put the burden of its cost on society at large rather than charge those that use the road service and have those that do not use roads not have to pay for them? Why should anyone subsidise urban dwellers going on regional holiday?

You have a vested interest in tourism to Hakuba and as such would have been a benificiary of the wealth transfer to regional tourism. Everyone else would have faced either a higher national debt burden or higher taxation. The benefit to you would have ended up being less than the cost to society. The more productive elements of Japan would have had to deal with an input (distribution) that was not subject to any kind of supply and demand pricing thus perversely increasing their costs (if delivery times for manufacturing increase due to traffic the manufacturer/retailer has to pay for wages, fuel as well as carry more inventory. This more than offesets road toll fees).

Edit to add that my views are not a result of my aversion to being taxed. I am fully aware that much of the DPJ's manifesto will result in me carrying a higher tax burden. When the tax is being used to create a "public good" that a private market cannot create such as the promised larger social safety net (unemployment insurance, health, education etc.) I do not mind so much as long as it is provided with a rationale that it is currently being underprovided (in Japan I beleive it is). I simply disagree with making highways free, which benefits the few at the cost of the many. It isn't even personal traffic issue that makes me averse to the idea because I have already decided to get a Nagano station parking stall and use the Shinkansen, regardless of road fees.

200 dollars may by under priced to you, but considering the amount the average person makes they just cant spend that much. The Roads can be fixed to run better, it is way overstaffed and new roads are being constructed in the worst possible areas. I don't care if it is free I just want a system that is not going to make me hate paying every time.

The whole system is a rip off. You have to buy the machine, get a credit card approved highway card, install the unit in your car by a professional. The ETC in Canada is run much better. A rental unit and allows for everyone to be able to get the discounts.

I don't want my town wasting more more period. It sickens me to see more dams, or heated roads that will have zero benefit and just be a tax burden.

Prices are not set by what you or I or even the average person can afford but by supply and demand. The road tolls are not underpriced for some and over priced for others. I cannot afford a lear jet but that does not make them overpriced to me or even a rip off. Assuming Bombardier makes a normal profit selling them then they are the "right price". That the main trunk roads are overcrowded (like the ones that connect Tokyo to Nagano) means that there is too much demand and prices should rise, and therefore are underpriced. This has nothing to do with what you or I can afford. I agree with you, yield management is a great idea. Prices should adjust to curb driving at peak periods (i.e. very expensive when jams are normal, very cheap in the middle of the night, more expensive on holidays ect).

The main policy of the DPJ to the average Japanese person who doesn't run a tourist business in the regions was the promise to cut the pork barrel consturction you described above and increase spending on social programs. They already have cancelled trillions of yen in pointless highway projects (and dams) but they are finding that their cuts are not enough to offset the deficit they are creating by spending on social welfare (and falling tax revenue that goes with a weak economy) and it was stretching the government's ability to borrow. This is the reason highway tolls will not be cut. They weighed their promise of a social safety net against their promise of cutting road fares and, rightly, came to the conclusion that the social safety net was more important.

Even with road tolls, the deficit is still massive and Japan's financial stability is not great. They will have to raise taxes (they just did raise cigarette tax) at the risk of further hurting investment and consumption.

I do not have view on the efficiency of the ETC system vs. other countries as I have never owned a car outside Japan (and only got a car relatively recently in Japan). During the period I didn't own a car I did take some comfort in the fact that I was not being taxed to subsidize other's ski holidays.

Some interesting macro analysis there Ninja. The free highway policy may be goner, but I don't think they'll touch the child benefit one which costs far far more.

Now they're in power, why doesn't the DPJ reorganize the parliament to better enfranchise the urban regions where everyone lives?

Though they may be subsidizing the regions, Japan's cities too are not short on red ink. One major cause has been reclaimed land-type developments in the respective bay areas. Obviously Kobe had the quake too.

I dont disagree that things have to change in Japan but our beloved ski resorts need freaking help.
People are driving the under priced roads because they are affordable now. The only time I ever got into Traffic jams in Japan was on long holidays or the tokai hokuriku on the weekends. The tokai is a great highway for Nagoya people that is well priced. That to me says that the highways were well overpriced at least outside of the Tokyo area which for a good part of it isnt part of the ETC discount.

Crushing the tourism industry now is not going to help things. I know people here that are starting to look for
work and with the pork barrel projects going away(good thing) what are they going to do? I dont care about baby bonuses I care about stable work. Tourism doesnt work if it only prices in the rich.

Ski holidays are not a right to be subsidized so that all can afford them. They are, in fact, a luxury. The non-skiing public should not be expected to pay for those that ski. Auto racing sounds like a lot of fun too but I wouldn't know because I cannot afford it but this doesn't mean it should be subsidized until I can, much to the dismay of those that work in nice stable jobs at the F-1 division of Yamaha Motors (they make F-1 engines for those that don't know). This isn't health and education we are talking about. The baby bonus is seen as a public good to the governement due to the generation gap created by an aging population (it is probably already too late for Japan to address this without immigration though). There are already too many ski resorts in Japan being indirectly subsidized by government sponsored lending or corporatations unwilling to break their implicit social contract with the governent to maximise employment. Ultimately the best thing that could happen to the Japanese ski industry is that a lot more marginal resorts do go bankrupt and shut down concentrating the demand toward toward the more economically viable resorts.

Edit to add that the affluent will always be over-represented in skiing. Even with travel subsidized, the equipment rentals etc. make it an expensive holiday for most. To subsidize ski tourism is actually a subsidy for the rich(er).

I just saw the DPJ approval rating. It fell 1% over the last month (the margin of error on the survey wasn't stated but they are usually about 2%) . I don't think backpeddling on road tax cost them anything.

well, it certainly rubbed some people the wrong way.

Im not talking about subsidized ski resorts Im talking about lost jobs to rural areas.
Tourism and farming are the main jobs in the area which tourism was promised a
free highway. For many pensions the 1000 yen highway saved them this season.
The baby bonus is quite frankly a waste of alot of money. Im to get 70000 a month.
All for having kids? Give me a the ability to support my family not stupid pay cheques.

Three kids is 26,000 *3 = 78,000 in your hand. Most working mothers in Hakuba will come out will less than that working nearly full-time hours once you subtract the cost of childcare and of driving a car to and from work. Most of them make less than 1000 yen an hour.

I could write you an essay about why jobs in the regions should not be protected by subsidy but I don't need to. The decision to raise the road tax was not an economic one but one made out of fiscal necessity- Japan's tax base is falling, their fiscal commitments rising and their debt burden huge. They simply could not afford to maintain a free road system. The baby policy is an attempt to reduce Japan's falling birth rate and the generation gap, which is so much more an important problem then weak regional tourism that it is not worthy of debate. Whether it will work or not (personally I think it is too late even if it does work somewhat) is another debate.

I can tell you this about kids putting extra money in my pocket isnt going to make me have more, no fucking way! That's almost 1 million yen a year for us in the budget. Do you really call that fiscal responsiblity? If you want me to have more kids I need day care and steady work. Throwing money at me isnt going to make me have more! It is the hardest fucking job in the world raising kids.

I have never been a fan of the false economy. Canada went down that path long ago. Killing tourism is just as bad as the ill thought out 1000 yen travel though. Instead of coming up with a plan that made things affordable they made it too cheap. Anyone with a brain could see the plan was full of holes. You had a 48 hour travel window most of the time. That meant packing em on and off the highways. There has to be a better way then going back to unused highways again. How fast did you drive your car again 2 years ago on the busy roads? When I drove from Kyoto I could drive 130kmphr in the fast lane for 1 hour at a time. That isnt a well priced road that is a loss producing expense, heck many real companies would close or sell that loss off.

It wasn't busy roads that I broke that record on. I came in the off season on a weekday. On my sunday return it took 6 hours to get from Fujimi to Tokyo (the same road that connects Nagoya to Tokyo). Yeild management that would make my trip on dead roads cheaper and my return more expensive would be the ideal solution.

You are the biggest fan of false ecomony on this board. Making a limited resource free is the defenition of false economy .

Let's face it, FT just wants more stimulus in his package.

Maybe he needs some pump priming to reinflate.

There is way more to a false economy than a cheap or free road.