Half-price public transport fares in NZ could become permanent at Budget

Thursday, 5 May 2022

Public transport will be a focus of the government’s Budget this month

Commuters could enjoy half-price public transport fares indefinitely, with the Government considering making its three-month-long trial permanent.

According to sources who have been involved in budget discussions, the decision is expected to be made after the May 19 Budget, which Finance Minister Grant Robertson says will focus on “investing to meet our climate change goals”.

One source, who has provided advice to Transport Minister Michael Wood, said officials were leaning towards making the reduced fares permanent. Free public transport has also been discussed, but is unlikely.

Another person with knowledge of the Budget discussions said the decision would depend on public transport user numbers during the three-month trial, saying there was something of a use-it or lose-it philosophy for the subsidised fares.

* Half-price public transport could attract 10-15% more passengers in Auckland

* Calls for fare-free public transport after Government halves ticket prices

Deputy Prime Minister and Finance Minister Grant Robertson says public transport will be a focus of the Budget.

Since the Government increased its public transport subsidy on April 1, halving the price that commuters pay, user numbers have surged.

In Wellington, a third more people have been using public transport since the half price fares were introduced, although they still sit at about 73% of pre-Covid levels.

The Government estimated the increased subsidies would cost between $25 million and $40m for the three months to June 30.

In response to a written question from National Party transport spokesperson Simeon Brown, Wood said he had already received advice on the potential extension of the subsidy, having asked for a briefing before the subsidy started, on March 30.

Wood and Robertson strongly hinted in March that the three-month subsidy wouldn’t be the only support for public transport come Budget day.

People close to them, who asked for anonymity, said one measure Ministers were considering was a public transport fund that could be used for things like increased public transport subsidies.

Public transport use in Wellington increased 35% in April compared to the month before.

Wood and Robertson declined to comment, saying transport funding couldn’t be discussed until Budget Day.

Public transport is already heavily subsidised, largely through the National Land Transport Fund and local councils.

Greater Wellington regional councillor Thomas Nash, a proponent of free public transport, hoped the central government would continue the subsidies that allowed half-price fares.

“It would be a blow to pull the rug out from the 50% fee reduction when the three-month period ends,” Nash said. “I think everybody who cares about climate and public transport, and transport equity, is hoping that there will be moves in the Budget to make this kind of fee reduction permanent.”

Nash said there were “high expectations” for those sorts of moves from the 2022 Budget.

Jon Reeves, from the Public Transport Users Association, said it was vital the Government extended half-price fares.

“Anything they can do to incentivise people leaving their cars at home and getting onto public transport is a good thing,” Reeves said.

In March, Robertson said “supporting public transport and mode shift will be an important part of the work we do to reduce emissions, and it will feature in Budget 2022”.

Any permanent funding would likely cost considerably more than the $40m cost expected with the three-month subsidy.

With public transport usage now rebounding after numbers plummeted during the pandemic, sources said the costs of a subsidy would increase as patronage did.

In Wellington in March, public transport patronage was 54% of what it was pre-Covid, according to Metlink general manager Samantha Gain.

That increased by 35% in April. Gain said it was a notable increase and they hoped to see the trend continue.

Environment Canterbury councillor Lan Pham (Christchurch Central/Ōhoko) said such a move would be “hugely welcomed”.

“In Christchurch, we know that such a big proportion of our greenhouse emissions are from transport,” she said.

“Government dollars are a really great way of funding greenhouse gas emission cut initiatives. We're trying to go as far as we can in terms of the ratepayer dollar in Christchurch, but it’s not necessarily the most equitable way of paying for things, we know that.

“Central government coming to the table could not be more welcomed, and I would applaud the Government for anything like that.”

Jake McLellan, Christchurch City Council councillor (Central), also welcomed the prospect of continued half-price public transport.

“I think it's really exciting. I can't wait to see some of the results from the three-month trial, and it would be great if the Government did want to extend it indefinitely,” he said.

“Anything that gets more people on public transport and away from cars is good.”

Improving the public transport system in Canterbury “should be a number one priority”, he said.

“You can only subsidise a sub-par product to such a degree before you actually have to make an investment and make it better.”