The cost of running Auckland's public transport has soared to nearly $750 million a year. Photo /Jason Oxenham.
The cost of running Auckland's public transport has soared to nearly $750 million a year. Photo /Jason Oxenham.
Ratepayer subsidies for Auckland’s bus, train and ferry services have risen from $510 million to nearly $750 million over five years.
The cost of subsidising each public transport user has nearly doubled, with train subsidies increasing significantly.
Auckland Transport is focusing on increasing farebox revenue and boosting public transport numbers to address financial sustainability challenges.
Ratepayer subsidies for train and ferry services have soared from $510 million to nearly $750m over the past five years, Auckland councillors heard yesterday.
The cost of subsidising each public transport user has nearly doubled from $3.27 to $6.30 over five years, according to a report by Auckland Transport to the council’s transport, resilience and infrastructure committee.
For bus services, the subsidy has increased from $2.72 to $4.70, train services from $4.56 to $12.01, and ferry services from $11.86 to $18.07.
Ferry subsidies have increased from $11.86 to $18.07 per passenger. Photo / Jason Oxenham
Buses account for about 75% of public transport journeys with trains accounting for about 20% and ferries for 5%.
The cost of running public transport is met through fares, NZ Transport Agency and council subsidies, and commercial activities like advertising.
The report said while patronage had recovered to 86% before Covid, even at full recovery would require “significantly higher subsidies than in 2019”.
“This presents a critical financial sustainability challenge for funding partners, particularly as Auckland maintains relatively affordable short-distance fares,” the report said.
The Auckland rail upgrade has led to fewer people using the trains, increasing the subsidy per passenger.
Instead of zeroing in on the headline costs, AT officers and councillors turned their attention to increasing revenue from fares - known as farebox revenue - boosting public transport numbers, and affordability.
In the past five years, farebox recovery has hovered around $200m a year, while operating costs have increased by about 50% to $747m.
Stacey van der Putten, AT’s director of public transport and active modes, said the rising costs of rail subsidies have been distorted by KiwiRail’s disruptive upgrade of the city’s rail network.
She said that compared to Australia, Auckland’s farebox revenue has been higher than cities across the ditch. When Queensland introduced 50c fares, its farebox recovery dropped to 5%, she said.
Van der Putten said an international affordability study found Auckland ranked well for short trips but poorly for long trips, saying AT is working to make long trips more affordable.
Last month, AT increased the average bus, train or ferry ticket costs by 5.2%, and removed the 10% off-peak discount. The $50 seven-day fare cap for public transport users and the $20 daily fare cap for contactless payment remained in place.
Councillor John Watson said the farebox recovery challenge is being faced around the world as a consequence of Covid and the subsequent recovery, saying New York’s public transport system had seen its farebox ratio drop from 51% to 25%.
“I think we are on the right track. Things are recovering,” he said.
Waitākere councillor Shane Henderson said Auckland farebox recovery is going great, saying that needs to be messaged to the Government, and the council should be looking at making fares cheaper.
Councillor Richard Hills.
Councillor Richard Hills said a Government directive for increased farebox recovery from local government would make things much harder and lead to higher fares.
“We have a growing public transport system. It is far better than when I was young. We have got a lot more to do,” he said.
