Calls for free public transport after government halves ticket prices
Climate and community activists have called for free buses, trains and ferries, after “surprisingly cheap” cost estimates to halve public transport fares.
The government said it would cost between $25 million and $40 million to halve public transport ticket prices for three months. This has led some to speculate that a fully funded public transportation system could cost as little as an additional $200 million per year.
But experts warn that the three-month estimates are likely based on current passenger numbers, which are being suppressed due to Covid-19 outbreaks. If people flocked to public transport, this additional demand would drive up costs.
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The announcement sparked a flurry of responses on Twitter, with some social media users replying that it was “surprisingly cheapto reduce public transport fares.
Based on the lower range, a year of free public transport could cost as little as an extra $200 million, some people say.
MP for Auckland Central Chlöe Swarbrick compared the policy’s top estimate of $40m to the $350m cost of cutting the petrol excise tax by 25 cents.
On that basis, extending those costs to a full year and making public transportation free could total $320 million, she calculated: $30 million less than the three-month tax cut.
Free public transport was also backed by Auckland mayoral candidate Efeso Collins, who called the policy the “first and best way” to tackle the city’s emissions.
A petition calling on people under 25, college students and Community Services Card holders to travel free on trains, buses and ferries was presented to Transport Minister Michael Wood this week. Advocacy group Free Fares said the petition had 13,000 signatures.
This week, the government hinted that reduced fares on public transport could be extended. The policy’s three-month duration will last until the new fiscal year, when a new budget comes into effect. The government has said climate action will be a major focus of this year’s budget, with $4.5 billion allocated.
Even before the fare reductions, the government is making a significant cash contribution to public transport: with at least $390 million to be spent in 2021/22 on services and improvements.
Finance Minister Grant Robertson declined to say what would happen to tariffs after the three months were up. But he added: ‘Public transport is very clearly an investment that will play an important role in reducing emissions.
If free public transit is on the table, it will likely cost over $200 million. According to Auckland Council estimates, the City of Sails would need at least as much, if not many more.
In 2018, the council calculated it would cost $236 million to provide free buses, trains and ferries. This would amount to $382 million for the Auckland region alone by the end of the decade, according to more recent calculations.
The different estimates were partly explained by the council’s expectation that demand would increase if no one had to pay a penny to use public transport.
Extra passengers occupying empty seats on buses, trains and ferries may not affect services – but eventually an increase in ridership could mean councils need to set up additional services, hire new employees and possibly buy new vehicles.
In 2019, the Greater Wellington Regional Council pushed back on a plan to cut fares for 900,000 low-income people across the country, fearing extra demand in the capital would overwhelm its network.
Between March and July 2020, when the country was in lockdown, the government fully funded public transport fares. Until June 2021, it also supplemented the revenue collected from passengers, as the country is in the midst of low passenger numbers.
In total, the two policies cost $230 million, according to Waka Kotahi.
The government’s forecast of $25 million to $40 million is based on revenue collected from fares over the past four years, the Department of Transportation said.
This includes rates for the years 2019/20 and 2020/21, which were affected by the pandemic.
A spokesperson for the Department for Transport said the estimate did not take into account increased demand from people switching to public transport over the three-month period. “The current Covid environment creates too much uncertainty for an accurate estimate.”
(Since the government currently “tops up” fare revenue, this may not affect overall spending.)
The number of passengers was increasing before 2020, but the Covid-19 epidemic caused a sharp drop. The number of journeys has yet to reach pre-Covid levels.
With Omicron in the community, passenger numbers are unlikely to increase significantly during the three-month period when fares are reduced.
But longer-term investments — like a permanent cut or a full subsidy — could change that.
Transport campaigner Matt Lowrie backs the government’s announcement, especially as fares are relatively high compared to those in other countries.
Given the start-up issues — some systems will need to be updated to accept the cuts — it might have been easier to cut rates entirely for three months and just “turn the machines off,” Lowrie said.
Beyond the three months, Lowrie has supported targeted rate reductions to support those who need it most, such as community service cardholders. But if the government were to spend a lot of money on public transport to reduce emissions, some of it should be spent on increasing the frequency, range and reliability of services, he added.
“There are a number of factors that drive transit use, and fares probably aren’t even in the top three,” Lowrie said. “If it [the fare reduction] succeeds and attracts many people to use buses, trains and ferries, then the challenge becomes that these services become overcrowded and unattractive to use. You need to invest in providing more services.
The cultural perception that only the poor use buses, trains and ferries also needs to be addressed, he added.
Monthly and annual passes — which could be offered by employers as tax-free benefits — could also encourage people to maximize public transit trips, Lowrie said.
Kirsty Wild, a public health researcher at the University of Auckland, supports the complete removal of fares for everyone, for city and intercity travel. While this can reduce emissions, Wild also focuses on social impacts. “There is decent evidence that it will make a difference in transport poverty.”
The current system, which forces people to own a car and even prioritize petrol over food, was a “real source of misery for a lot of New Zealanders”, she said. Even before fuel prices spiked this month, transportation costs had already doubled for low-income households in the past five years.
Those who cannot afford a vehicle are often forced to walk. “Someone who walks home from the supermarket in the evening with their kids and their groceries – that’s not the kind of active transportation we want.”
Free public transport is “a basic foundation for a just transition”, Wild added.
The additional cost will be “a drop in the bucket” compared to the $12 billion allocated for Auckland’s city rail link and improvements, or the $15 billion investment in light rail, has said Wild. “There is good evidence that free is a particularly attractive price.”
The policy would reduce social isolation – improving public health – and potentially benefit the local economy. “The less money people spend on transportation, the more money they have to spend in their communities.”
To increase efficiency, fare reductions could be combined with policies to reduce driving, such as congestion charges. The latter could help pay for the former and ensure buses don’t get stuck in traffic, Wild added. “[Private cars] really reduce the quality of public transport.
Investing in safe infrastructure for walking and cycling would help efforts to promote green transport, she said: “It’s a great combination.”