11
. Dominic Cowell-Smith
From:
Anthony Bull
Sent:
Tuesday, 15 March 2022 2:34 pm
To:
Seb (Parliament) Brown; Lukas Clark-Memler
Subject:
FYI - BusinessDesk: fare free public transport
Hi team
We received a query from Business Desk on the discounted PT .Looking at providing the below answers to them.
Let me know ifyou have any issues
Cheers
Anthony
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1. On average, how much does farebox recovery (i.e. income from fares) currently contribute towards
the operating cost of PT In NZ? (Noting this will vary by council).
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Pre-COVID, approximately $320-$350 million was collected per year nationally. During COVID it has
been around $200-$250m per year. This is relative to investment by central and local government
into public transport services of over $800m per year.
2. Is the government PT subsidy in addition to the regular Waka Kotahi funding for PT operating
costs?
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Yes, Waka Kotahi will continue to fund operating costs as per the previously agreed arrangements,
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with the Crown contribution subsidising the reduction in the normal fare.
3. If it costs an estimated $25m to $40m to provide half price fares for three months nationwide.
Does that mean it would cost as little as $320m to provide fare free PT nationwide? If not, why
not?
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Yes, based on pre-COVID revenue.
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4. Has MoT done any recent modelling/estimates of how much it would cost to fully fund PT fares
nationwide with current 1·evels of service? How much would it cost?
We do not have specific modelling, but based on the current fare revenue it would cost an additional $220-
$350 million per year (the range reflects the difference faced during COVID and pre-COVID). This does not
include any mpact that lower fares might have on encouraging higher patronage levels (wbich could in turn
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require additional services, with additional costs).
5. Has MoT provided any recent advice to the transport minister/other ministers on the cost to make
PT free for all or some groups?
No. Work has been focused on the Community Connect project - a three-year pilot of a 50 percent
concession for Community Services Card holders in Auckland.
6. Waka Kotahi has previously expressed an opinion that service improvements are a better use of
money than providing discounted or free fares. Does MoT agree?
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