The NSW government says its decision to increase Sydney public transport fares by more than double the rate of inflation is essential to make up lost ground.
NSW Treasury figures released yesterday forecast a two per cent increase in Sydney's consumer price index during the current financial year.
However, City Rail and bus fares will go up by an average of 5.4 per cent from January 2, the first rise in public transport costs since April 2010.
Transport Minister Gladys Berejiklian says the increase is necessary to cover the previous Labor government's decision earlier this year not to raise fares in 2011 to offset inflation.
"The previous government in January, we believe irresponsibly, chose not to pass on the CPI increases - that's why we've had to put on the CPI increases for last year and this year," she told reporters in Sydney.
"We know people are doing it tough, but we thought it was responsible to make sure we passed on the CPI increase from last year and this year."
The cost of an adult single rail ticket will rise by between 20 cents and 40 cents on the CityRail network, which covers Sydney, the Central Coast and the Hunter, Illawarra and Blue Mountains regions.
A weekly rail ticket will increase by up to A$3.
For buses, a single ticket will go up by 10 to 20 cents and a TravelTen card will increase by up to A$1.60.
The Independent Pricing and Regulatory Tribunal recommended that overall fares could rise by up to 10.6 per cent.
Ms Berejiklian said the government had rejected the suggestion and stuck with raising fares according to the CPI.
Labor's transport spokeswoman Penny Sharpe said a fare increase of more than five per cent would add A$150 a year to travel costs for people commuting to Sydney from Penrith in the city's west and Gosford on the central coast.
"The O'Farrell government today has given a slap in the face to the commuters of Sydney," she told reporters.
"This is unacceptable. Fare increases should be kept at least to inflation. Otherwise, you're just going to get people out of public transport and back into their cars."
The Greens' transport spokeswoman Cate Faehrmann said the money should be spent on improving public transport.
"We need a marked improvement in reliability, frequency and new projects actually being built," she said.