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No such thing as a free ride PDF Print

TRainby Rhiannon Cook
Many people find the idea of free public transport attractive. Some people see it as a way of ensuring services are affordable to everyone, while others believe it would provide a huge boost to public transport patronage. But in reality there’s no such thing as a ‘free’ public transport service. And since someone has to pay, the question is who: the taxpayer or the user? If taxpayers were to cover the entire cost of our public transport services – making them ‘free’ to the user – the people who would benefit the most would be those already using the system, and those for whom it is readily accessible.

But what about those people who don’t have ready access to public transport, such as those people who don’t live close to a train line or a well-serviced bus route? They’d be paying the tax but not receiving any benefit. This would include a large proportion of low-income households who can’t afford to live in locations with good public transport services. Over the long term, free public transport would make housing near stations (and stops) more attractive, and therefore more expensive, forcing low-income households further away from ‘free’ services.

If no money were recovered through the fare box, this would also reduce the amount of money available for reinvesting in the system: in increasing the network’s coverage and improving the frequency and quality of services. And for most people this is the real barrier to using public transport, not price. The services simply don’t exist, or are too unreliable or too infrequent to present an attractive alternative to the car.

So if we accept that given the current state of the public transport network, and current budgetary constraints, people who use public transport should pay, the question then becomes, how much?

The Independent Pricing and Regulatory Tribunal (IPART) currently determine maximum public transport fares based on the principle that fares should cover the gap between the cost of a service and the external benefits of that service (such as through reduced congestion and reduced air and noise pollution).

This may be a reasonable starting point, but IPART’s fare determinations must then be overlaid by a number of other policy considerations.

Firstly, for some people the question is not what should they pay, but what can they pay. Affordability concerns could be addressed by keeping prices low for everyone, or through targeted measures such as concessions. Unfortunately, the absence of a clear, consistent and equitable framework for concessions means affordable access for people on low incomes is not guaranteed. As a result some groups – such as jobseekers and asylum seekers – experience disadvantage, and any fares increases would therefore lead to further social exclusion.

Secondly, if we are to move towards a more sustainable transport system, fares should be set at a level that encourages people to switch to public transport. While cost is not presently the main barrier to public transport use, people will continue to use the mode of most convenience unless there is a monetary incentive to do otherwise. This means it is not possible to make good policy decisions about public transport fares without considering the relative cost of driving. Overall, the transport pricing system should be geared towards making public transport the more attractive option, and ticket prices should therefore generally be lower than the (perceived) price of car travel.

As the Government implements its new electronic ticketing system, fairness and sustainability should form the basis of any subsequent fare restructures. And if it is to find the right balance between free and full fare, the Government will need to consider the interactions between pricing mechanisms (including the concessions system) across all transport modes.

Originally printed in June NCOSS News , the NCOSS member newsletter.