The Government is not ruling out reviving a policy to make half-price public transport permanent - although an immediate change seems unlikely.
The Herald can reveal that on October 31 last year, Transport Minister Michael Wood took a paper to Cabinet seeking to make permanent the Government’s temporary top-up public transport subsidy, which halved fares from previous levels.
A Treasury assessment of the paper, written for Finance Minister Grant Robertson, was released to the Herald under the Official Information Act.
It said the paper “sought to make half-price public transport fares permanent” at an indicative annual cost of $137 million - $152m a year. Officials reckoned the policy would cost about $400m over the four-year forecast period.
The full cost was likely to be less, because the Government would save about $23m from its Community Connect policy, which makes half-price fares permanent for some users.
Treasury, which often takes a dim view of subsidies like this, supported the proposal to make the subsidies permanent.
It recommended further considerations, although these were redacted from the paper released to the Herald.
When asked whether the Government would revive the idea to make the cuts permanent, a spokesperson for Wood said, “With the current cost of living challenges facing Kiwi households, the Government has considered a range of support options. A key focus has been balancing the benefits and costs of the scheme. The transport support package has been extended until June 30.”
Green Party transport spokeswoman Julie Anne Genter said the Government “must make half-price fares permanent, and invest in increasing reliability and frequency of our buses and trains”.
“Public transport solves so many problems at once. It’s great for connecting people, great for clean air and a stable climate, and helps people avoid getting stuck in traffic,” she said.
“It’s past time for bold climate action. Treasury supports making half-price fares permanent, this shows once again we need the Greens in Government to make sensible decisions that serve people and our climate.”
National’s transport spokesman Simeon Brown said the party supported the original reduction “because that, alongside the petrol excise and Road User Charge reduction was the only form of cost of living relief we’ve seen under this government”.
However, Brown said that now the Government should focus its efforts on tax relief to reduce the cost of living burden.
Brown said that “ultimately people need to pay a portion of their fares when they’re travelling”.
“[Fares] are already heavily subsidised. That money is best put into increasing the amount of services and putting it into better public transport infrastructure,” Brown said.
A research note from Waka Kotahi - NZ Transport Agency found that fares had increased since half-price fares were introduced.
However, the report found that cost was not the main barrier preventing people from switching to public transport. Instead, people who did not use public transport thought it was “unrealistic”.
“Non-users think of PT services as unrealistic alternatives for travel, since they are not available in their area, are not realistic for the distance that they need to travel or are going to take too long,” the report said.
Wood intended to fund permanent half-price fares from the Climate Emergency Response Fund, which is itself funded from Emissions Trading Scheme revenue.
Half-price fares began nearly a year ago in April 2022, and has since been extended multiple times.
It’s currently slated to expire at the end of June, unless the Government extends it further - which it has not ruled out doing.
Wood seems unlikely to revive the policy in the next Budget.
After the permanent fares policy was rejected by Cabinet, Wood talked up the importance public transport being reliable and frequent as well as affordable.