Public transport: cheap or expensive?

As the year 2020 gets underway, there will be the usual changes to various government fees, charges and taxes. It’s nearly always up and public transport is no exception. This nearly always leads to gripes that “public transport is too expensive” and that to “solve congestion” we need more people to use public transport, so it should be cheaper. Whether it’s expensive or cheap depends on who’s paying. The numbers on this are interesting.

From January 7 in Queensland, public transport fares will rise by the CPI – around 2%. A typical two zone trip will now cost $4.03 – which is actually cheaper than in 2014 when the same trip would have cost $5.96. A one zone trip will be $3.31 and a four zone (the furthest) will cost $8.11 each way. Then there are various discounts for seniors, students and people with various special needs. (And then of course there is substantial fare evasion which, given fines are rarely enforced, means “free” travel for the naughty ones).

None of this will mean much to 85% of you because only 15% of us use public transport regularly. But almost 100% of us believe that more – and cheaper – public transport is a key to solving congestion. Which we hope will mean we can all get around more conveniently in our cars.

Few people however appreciate the extent to which every single public transport trip is subsidised by the taxpayer. According to Translink’s own reports: “the average fare trip paid by customers was $1.88 and the average Queensland Government (ie Queensland taxpayer) subsidy was $7.12.”  Their report notes that revenue from fares makes up only 21% of funding.

So for every time the average fare paying passenger swipes a nearly $2 fare off their Go Card, the taxpayer silently tips in over $7. Each way. Per person. Per day.

“The… subsidy was based on network funding from the Queensland Government (ie taxpayer) of $342.86 million less fare revenue of $90.57 million for the quarter” the report says. Which means (roughly) an annual taxpayer subsidy of around $1.009 billion.

Many public transport advocates will argue that fare increases are discriminatory in that they negatively impact lower income workers, and I for one would be in hearty agreement with that sentiment, if only it were true. Apart from the student and seniors concessions, the average public transport user favours PT because they work in the inner city – which is where most public transport routes head to, or come from. And for the average person, this means they earn a substantially higher income than their suburban worker counterparts, for whom PT is rarely a workable option.

Further, the average PT user does not commute from outlier suburbs but a higher proportion get onboard within a roughly 5 or 10 kilometre radius of the CBD. This also happens to correlate with higher average housing prices. As noted in this article in The Conversation: “the distribution of high-quality public transport typically favours wealthier households within Australian cities.” You can find loads more evidence about who actually uses PT and their demographic and geographic characters on this excellent site: https://chartingtransport.com/)

Of course, if you are a lower income CBD worker using PT to get to your inner city job, public transport could seem expensive. A two zone trip - $4 each way – is $40 a week. On the median annual income of somewhere around $60,000 per annum, that can mean a lot. But at the same time let’s keep in mind that’s only 20% of what it costs – the taxpayer is funding that person’s travel to the tune of around $140 per week.

Another argument often raised in the context of public transport costs is the suggestion that we should bite the bullet and just make it free (which means the taxpayer pays the lot). If my numbers are correct, that would mean an additional $1.009 billion per annum (being the annual taxpayer subsidy via Translink). There could be merit in this if it meant a vastly higher usage of public transport leading in turn to much reduced congestion and significant reductions in road and other network costs. The problem with this would be if the PT network was suddenly overloaded, requiring vast increases in capital investment to bring the network up to scale. And of course vastly more people using PT would mean vastly more tax payer subsidies.

This is, however, unlikely in my view for the simple reason that public transport only suits a finite proportion of the population. Typically, it works for those with CBD or inner city jobs (only around 15% of the regional population); those with regular clockwork-like hours (increasingly few of us); those who do not have mixed journeys to work (for example no school drop offs or pick ups); and so on. Making PT free could mean only a marginal increase in patronage, but at a very substantial cost. The rest of us would be cursing everyone else for not availing themselves of free public transport, while we continue to stew in congested roads in our cars. I mean, it’s not our fault – we need our cars. Not everyone else does, do they?

(In Peter Seamer’s recent book ‘Breaking Point: The Future of Australian Cities’ he recounts the story of the decision to make Melbourne’s CBD trams “free.” All that happened is that the wealthy CBD workers took up the offer, crowding the trams to the point of overcrowding and leading to far fewer people actually walking. There was no net community gain). 

So if you are among the nearly 15% of people who do make regular use of the public transport network, please don’t begrudge the taxpayer the fare increase and please don’t attack the politicians who have to announce it. Significant and overdue improvements are being made to public transport networks which users are not being asked to pay for. It’s a good deal and worth keeping in mind that for every dollar of the fare you are paying, the taxpayer is tipping in an extra four dollars. And they’re not complaining.