The government has released targets that would mean public transport users have to pay more for their ride. Shanti Mathias explains.  

What’s all this then? 

The New Zealand Transport Agency released a discussion document last week about increasing “private share of public transport operating expenditure” – which basically means that councils would have to charge more money for buses, ferries and trains so they can give more money back to the government. While not confirmed and set into policy yet, this document shows a clear direction from the government – it wants councils to take in more revenue to offset the cost of running public transport.

The targets would be specific to each region, but Wellington regional councillor Thomas Nash says it would require increasing fees by 71%, turning a $3.30 two-zone commute into a $5.60 two-zone commute, or $20 spent on public transport per week to $34.

Along with the discussion document, local councils and transport authorities have received letters from NZTA asking them to increase their private share; the targets would have to be agreed by December 19. In response, Greater Wellington Regional Council chair Daran Ponter wrote a letter on behalf of regional councils (except Auckland Transport) requesting  an urgent meeting with transport minister Simeon Brown. “As a sector we are concerned that, as they currently stand, the targets NZTA have set are simply unachievable,” the letter reads. “An initial assessment of the proposal would suggest these targets are simply not possible without severe and widespread public transport service cuts.”

A statement from Brown to RNZ said: “Taxpayers and ratepayers have been increasingly subsidising public transport in recent years. We expect councils to find efficiencies to keep these costs down and to look at maximising alternative revenue streams such as advertising on the public transport network.”

How does paying for public transport currently work? 

Currently, public transport is run by regional or unitary councils, which set the fees and contract operators (different bus, train or ferry companies) to run the services. The government subsidises public transport, and so do councils. For example, Auckland Transport’s operational funding is paid for by Auckland Council (the local council, gathered through rates), the NZ Transport Agency (the central government, gathered through road user charges, fuel taxes and vehicle registration charges), and public transport income (gathered through user fees). There are a few other, smaller, sources of income too, like advertising on buses and at bus stops. 

The money from the central government comes out of the National Land Transport Fund, which is the same pool of money that goes towards state highways, local highways (also maintained by councils) and road policing. 

This is for the operational costs of running public transport systems – costs for new infrastructure, like Auckland’s City Rail Link underground metro or the nationwide Motu Move payment system, are handled separately. 

Didn’t public transport fares already increase? 

Yup, there have been a few fee increases recently. After the first lockdown in 2020, NZTA funded  several months of free public transport around the country in an effort to boost reduced patronage. This ended, but universal half-price public transport (and a reduction in the fuel tax) began as a response to the “cost of living crisis” in March 2022. In June 2023 the universal half-price fares ended, but there was free public transport for kids under 13 and it remained half price for those under 25 and community service card holders. At the start of May this year, half-price public transport for under 25s and free transport for kids ended, although the discount remained in place for community service card holders. 

At the same time, there have been fare increases in several locations, including Auckland, where fares rose by 6.2% in February, and Wellington, where fares were increased by 10% in July. Together, these two regions are where 80% of the country’s public transport trips are taken. They also have the biggest private share of the cost of public transport in their region, contributing 23.5% and 20.5% of operating costs respectively. The discussion document says that each region will individually set the target for the return of private money – but even though smaller regions, like Gisborne and Northland, make less money from fares, this might not reflect costs; where there are fewer, more spread out people, it’s harder to operate public transport efficiently. 

The discussion document notes that the cost of operating public transport has increased faster than inflation (on average), while the average fare per passenger boarding has decreased, even when adjusted for inflation. However, this calculation, including a big drop in 2021-2023, counts the previous discounts, even though these are no longer in place for most people. The SuperGold discount, providing free transport to over-65s in off-peak hours, is also included in the calculation, even though councils are required to offer this concession. While there was a big dip in the private share of public transport funding in New Zealand over the pandemic, the discussion document shows that the cost recovery in New Zealand is similar to other Australian cities, and more than Hobart, Brisbane and Perth over the last year. 

So if increasing the private share will mean the government has to pay less for public transport, is it investing in other kinds of transport?

Private transport on roads is certainly a focus. The most recent government budget included $1 billion to deliver the “Roads of National Significance”. The government’s commitment to expanding roads in Northland alone is going to use 10% of the government’s infrastructure budget for the next 25 years, not counting maintenance. 

While there has been some money put towards repairing Wellington and Auckland’s urban rail networks, as well as developing busways in the east and west of the city, investment in cycling and walking paths has been nearly halved. In general, the government’s transport spending has been very focused on infrastructure used by people in cars.  

The discussion document explicitly says that in most of Aotearoa “public transport fares are significantly lower than the average cost of travelling in a single occupancy vehicle”, concluding that “the bigger the gap means potentially more room to increase fares, assuming private cars is the main alternative [sic]”. The calculation that NZTA is using doesn’t include the social and economic costs of cars like providing and paying for parking space, traffic and air pollution.

And do these other forms of transport also rely on users paying a significant part of the costs? 

As this post on Greater Auckland points out, the response is quite inconsistent. The government doesn’t release the contributions that fuel taxes and road user charges make to the cost of all new roads. But for several of the big road projects that are in the works, including a second Mount Victoria Tunnel in Wellington, and an extension of State Highway 1 from Whangārei to Port Marsden and Warkworth to Wellford, the “private share” – ie fuel taxes and road user charges from the vehicles travelling on them – is an average of just 3.4%. For the Mount Victoria Tunnel, it’s just 0.9%. In comparison, public transport users pay 20.5% of costs now (on average), with 34-40% the target for 2026-2027. 

What has the response to the fee increase been? 

Unsurprisingly, many people aren’t happy. “This move will push people into cars and impose huge cost of living increases on people who rely on public transport,” says Mika Hervel, the spokesperson for Free Fares NZ, a coalition of organisations pushing for more affordable transport. 

Labour’s public transport spokesperson Tangi Utikere described it as a “huge blow to communities across the country”, while Green Party transport spokesperson Julie Anne Genter called it a “disaster”. “It’s bad for the climate, bad for our cities and it hurts those on low incomes most of all.”

Thomas Nash, the Greater Wellington Regional Council transport chairperson, said that meeting the targets would mean increasing fares in the Wellington region by 71% per year. “It’s the opposite of what’s needed in a cost of living crisis,” he told RNZ.

Simeon Brown told RNZ that he would consider the request for a meeting to discuss the private share targets with regional councils.