Fare rises mean fairness
Public transport fare increases are about sharing the costs fairly, writes Peter Glensor.
People who know me as a regional councillor know that I actively encourage regular, constructive feedback on Greater Wellington Regional Council’s business and decisions.
I really value constructive criticism and always try to give straight, honest responses to queries. However, recently we have received some unfair criticism and claims about how GWRC sets public transport fares. Readers deserve to know the facts.
Each year GWRC reviews fares for buses, trains and the harbour ferry. We decided a few years ago to review fares annually, rather than every two or three years.
It seems fairer to have regular, small increases than relatively huge, shocking increases like those in 2006 and 2008.
We also try to avoid targeting the same groups of commuters each year. Last year, for example, the only fares that increased were single cash bus fares, fares for single zone trips and an increase in the price of long-distance trips.
This year, we are proposing an increase to multi-trip and stored value card fares, but no changes to single cash bus fares.
As chair of the council committee responsible for reviewing fares, I am committed to sharing the impact of any fare increases as fairly and equitably as possible.
As a council we aim to share the costs of public transport fairly among taxpayers, ratepayers and public transport users.
For nearly 20 years, GWRC has had a fare recovery policy which states how these costs will be shared. The current policy is that passengers’ fares will foot between 50 to 55 per cent of the costs, and the rest will be shared by central govern- ment and ratepayers.
Our policy defines costs as the price of our contracts with the various bus, train and ferry operators plus our considerable debt servicing costs.
Recently the NZ Transport Agency, the government’s transport funder, came up with its own farebox recovery policy which calculates costs differently.
According to that policy our total costs are lower – it excludes our debt servicing costs – so the proportion from fares seems higher.
For this difference we have been accused publicly of deliberately devising an alternative method. This is wrong.
GWRC has had a fare policy based on actual costs for many years.
The fact that we include debt servicing in our costs is perfectly legitimate; these costs are very significant because of all the investments we have made and will continue to make in building a high quality, reliable public transport network.
However, we have changed our policy to fit the new national rules. As far as I’m concerned, regular fare increases are here to stay.
They’ll enable us to provide reliable, comfortable everyday services and continue to invest in longer-term improvements while making sure that the costs are shared as equitably as possible among passengers, ratepayers and taxpayers.
The other criticism of us is that we have a transport reserve. This reserve has built up because of the high New Zealand dollar and therefore oil prices have not been as high as predicted.
This year, we’ll draw on that reserve, with $2 million helping pay costs and keeping fare increases as low as possible. If and when oil prices go up again, and the New Zealand dollar drops, chances are we’ll be criticised for not having enough reserves. Sometimes you can’t win!
You’ll have a chance early next year to let us know what you think about fares, how they’re set and the structures of the zones on which fares are based.
We’re going to do a fare structure review and I really welcome your feedback. Please help us build a public transport network for us and for our grandchildren.
Peter Glensor is deputy chairman of Greater Wellington Regional Council and chairs the Council’s Economic Wellbeing Committee, which oversees public transport.
Editor’s note: Kapi-Mana News did not intentionally suggest that GWRC had ‘‘deliberately devised an alternative method’’ of cost sharing. In fact, we put forward an argument justifying the council’s formula. Last year the council’s total farebox recovery was 57 per cent of its costs, with ratepayers and taxpayers sharing the remaining 43 per cent.
Transport man: Peter Glensor