I am a huge advocate for public transport. Whether you use it or not, having a great public transport network is essential for a city. I’ve lived overseas and seen public transport that is reliable, quick, cheap and sustainable. I believe we can have this in Wellington. So I’m pleased to see one of my mayoral opponents talking about growing public transport and announcing a policy in this space.

The trip cap policy promises that if you travel on public transport eight times in a seven day period you can travel for free for the rest of the week. Part of my campaign focus is on making sure our Council makes smart choices. So just to be sure, I’ve had a look under the hood to see how this one stacks up.

The trip cap has been pitched as costing around $4.5 million each year and resulting in 300,000 additional public transport trips. A quick look at the numbers tells me that total public transport trips last year in the region was 38 million. So a 0.79% increase in patronage for $4.5m at about a $15.00 subsidy per extra trip generated.

This seems high so I thought I’d check what you actually save if you live in Wellington and under what conditions. Some quick maths tells me that if you live in the Lambton Ward and use the bus ten times a week 48 weeks a year you’ll save $193 per year. Live in Southern, you’ll save $330. East, West or North and you are looking at $330m, $422, $475, if you use the bus or train 10 times every week. The average Wellingtonian will save 70c per trip assuming they bus 10 times each week. Someone who takes less will save nothing.

Live in Porirua you save around $580 ($1.20 per trip), Upper Hutt: $840 ($1.75), Waikanae: $1,160 ($2.43), Masterton: $1,680 ($3.51). The policy is clearly far more favourable to people who live elsewhere than it is for Wellington City rate payers and public transport users. The design of this policy is actually such that you lived in Masterton and really wanted to take the Mickey you could easily use it to save yourself $6,200 per year (traveling free by train Tuesday through Friday each week).

The goal of this trip cap is supposedly public transport growth. However, international public transport best practice tells us that, so long as costs aren’t too high (which in Wellington they are not), then reducing fares even further is not actually the best great option. To grow public transport, reliability and frequency are the critical things to get right. So these are what we need to focus on. 

Used differently, this $4.5 million a year could be used to make huge massive improvements to frequency or reliability. For example the full Courtenay Place bus priority lanes and revitalisation is forecast to cost $59m, capitalising the $4.5m/a would fund the whole project plus interest. These upgrades would allow our bus operators to run more reliable, quicker and cheaper services; deliver a critical cycle lane link; and give us a much improved central city. Personally I would by far prefer this option.

Another approach could be increasing the funding to expand and improve bus operations. With some modest assumptions, a $4.5m payment each year for 20 years would allow 50 buses and bus drivers to be added to the fleet to perpetuity. This 12% increase in bus numbers would allow significantly improved bus frequency.

This trip cap reminds me of the sorts of policies we struggled with under the previous Labour government. Well intentioned, but not well designed, so the money could have been better spent. A more defensible version at least would be a zone based fare cap with a maximum daily or weekly dollar figure for each set of zones. This would reduced the extent to which Wellingtonians subsidise people from other cities and stop some of the potential for more audacious Mickey mousery.

Long story short, this trip cap policy isn’t good value for money if you are a Wellington rate payer or public transport user. It’s also hard to see it doing a better job of growing public transport than to other similarly priced options. This is not a great policy for us.

Interested in more? Follow me on instagram @alexbakerwellington

NB1. Courtenay Place Revitalisation assumptions:

• Capex $59m

• Long term Council cost of debt 4.2%

NB2. Bus fleet expansion assumptions:

• Operator WACC 10%

• Per bus CAPEX $700,000

• Farebox recovery: 50%

• Inflation: 2%

• Corp tax rate: 28%