He claimed “every percent” of increase in the share would “likely mean a 10% increase in fares”.
Vanessa Browne, NZTA acting group general manager for transport services, told Radio NZ the share increase was needed to support the record level of public transport expenditure already being invested by central government in the ever-growing costs of public transport.
She said increasing revenue could be done by other methods, not just raising fares – advertising, sponsorship, rental income and corporate schemes or commercial opportunities.
“By optimising services, reducing costs and raising revenue, [public transport providers] can create a more efficient and financially sustainable public transport system which delivers value for money for all of our communities,” she said – without upping rates.
Williams said Hawke’s Bay Regional Council (HBRC) received the letter on November 18, with the share increase needing to be confirmed by December 19.
He said the council was on the verge of a “step change breakthrough” with a new public transport platform based on “increased patronage rather than coverage”, but then “overall funding was cut”.
“Starting from where we are now – we could probably get to the 11% target for next year, but the real challenge is getting to 24%.
“That would effectively mean we either have to dramatically increase fares because that increase would be the revenue side, or dramatically cut expenditure.
“The problem with dramatically increasing fares is that fewer people will take the bus. The problem with cutting services is you end up in this sort of death spiral, a vicious circle.
“The whole thing is pretty wrongheaded in terms of its method.”
The council is having a workshop on Friday, December 6 to “reimagine” the region’s public transport future, which will look at partnering with employers, to help the council deliver a public transport system.
Williams said the initiative is unlikely to increase the council’s share ratio.
He said the letter came “out of the blue” and will cause problems for HBRC’s long term plan three-year funding cycle.
“We really need to have a decent conversation with the Government about how this ... works for everyone, and if it doesn’t it’s wrongheaded.
“To put a whole lot of loading on the private funding of public transport just seems like a contradiction.
“There’s only one way to meet those targets and that would be very significant increases in fares or very significant cuts in services, neither of which makes public transport better or does anyone any favours.”
Transport Minister Simeon Brown told RNZ public transport costs were rising, shifting more of the burden to ratepayers and taxpayers, who subsidised public transport services.
In 2017, public transport users contributed 40% of the operating costs, but by 2023 this had dropped to 10%.
“Our Government expects that councils keep public transport costs under control and ensure that those who use public transport are contributing fairly towards operating the network,” Brown said.
Councils had a wide range of tools available to address rising costs – expanding advertising opportunities, partnering with businesses to fund targeted concessions, maximising retail spaces at transport hubs and introducing commercial charging facilities, he said.
“My expectation is that NZTA will work with councils to help them explore and implement these tools.”
Jack Riddell is a multimedia journalist with Hawke’s Bay Today and spent the last 15 years working in radio and media in Auckland, London, Berlin, and Napier. He reports on all stories relevant to residents of the region, along with pieces on art, music, and culture.
