Policies: Fare reform

Comparison of Melbourne vs other mainland capitals

The Public Transport Users Association supports a fare structure that is simple to use and understand, fully multimodal and appropriately priced.

Simplicity

Passengers must be able to purchase a single ticket from a limited selection at the beginning of their trip. The PTUA does not support any fare system where passengers are not aware of their fare at the start of their trip, including schemes based on the kilometre distance travelled (which is not general knowledge for most trips).

Multimodal

Victoria already has relatively integrated fares, but there is room for further improvement. Tickets must be available for all public transport services within the relevant area, including airport buses. Single-mode or single-operator tickets, which confuse passengers, undermine the “seamlessness” of public transport, and are generally poor value, and should not be permitted.

Fair fares

Currently, our fares are high for short trips, and need to be reduced to an economical level (from the perspective of the passenger) competitive with the car. There are also anomalies in the fare system that are confusing to users. We believe that the fare system should aim to treat comparable trips equally. Whilst fares need to bring in enough revenue to avoid unreasonably high public operating subsidies, the key to improved financial performance of public transport is to increase patronage, especially outside peak hours.

Periodical tickets should be discounted and heavily promoted, as they help keep regular passengers, cut fare evasion and reduce transaction costs, saving time and money for passengers and operators alike. Like other goods and services, fares should embody normal consumer rights.

Concessions

Concession fares must continue to be available to those of limited financial means, including pensioners, children, and Health Care Card holders, to ensure they are not excluded from using public transport. Concessions should also be available to all full-time school, university and TAFE students, for two reasons: first, full-time students are precluded from working significant hours in paid work due to their study commitments; and second, they tend to have fluctuating incomes that create a barrier to qualifying as Health Care Card holders even when they are technically eligible. The same reasons apply to postgraduate as to undergraduate students, and to international as well as Australian students, so long as they are studying full-time.

The PTUA accordingly supports extending transport concessions to all full-time postgraduate and international students. The cost of such a measure is properly seen as an education policy (to remove barriers to study) and/or an educational industry policy (to attract and support international students) rather than a transport budget expense. The PTUA would however support eligibility being restricted by an upper limit on financial support provided by educational institutions to students, on condition that this is readily identifiable by the relevant institutions and does not merely create undue complexity.

Other reforms should include allowing 4-year-olds to ride free (in line with other states in Australia) and making discounted Student Pass fares available to children attending registered kindergarten programmes.

Fare zones

The removal of zone 3 in 2007, and the zone 1 fare cap introduced in 2015 has reduced some long-distance suburban fares, but prices for shorter trips remain too high in absolute and relative terms.

Removal of the large differentials in the zonal fare structure has had some positive benefits, including removing the inducement for people to travel by motor car between zones to then park to access public transport.

However, the current almost flat fare structure within metropolitan Melbourne is unsustainable in the long term and has resulted in the fare for a tram or bus trip of a few hundred metres being the same as a lengthy 50 kilometre journey across the city. The current fare structure also means V/Line users pay far more per kilometre to reach Melbourne’s CBD than those travelling from the outer suburbs of Melbourne.

Any inducement for people to travel short distances by car whether it be in inner-suburban Melbourne or to activity centres or elsewhere in the metropolitan area or in regional areas is to be avoided, and not encouraged by the ticket pricing structure.

The value of periodicals

Use of periodical tickets helps cut fare evasion and transaction costs, and builds passenger loyalty. These should be promoted through schemes where yearly tickets are paid for with salary deductions. Discounts should be increased to make periodical tickets more attractive.

Specific reforms

As shorter-term measures, the PTUA supports the following reforms to the fare system:

  • Integration of Skybus into the regular multimodal fare system. The premium, non-integrated fares on these services deter potential passengers.
  • The removal of the Free Tram Zone in the Melbourne CBD. It has resulted in the loss of valuable fare box revenue without sufficient compensating social and economic gains, and has also resulted in over-crowding on CBD tram services.
  • The inclusion of station car parks into the fare system (at no extra cost) to ensure a public transport fare is paid for their usage.

Why free public transport won’t work

The PTUA does not support free public transport. As our Myths page shows, the primary barrier to patronage growth is the lack of high quality networked services. It is significant that free public transport has not been instituted in any other city of Melbourne’s size.

While we have had free public transport for New Year’s Eve for several years, its success is driven by the large crowds attending a range of events offered in the CBD. Free public transport on Christmas Day has also been offered regularly, but in stark contrast, metropolitan services are relatively quiet (in part due to many suburbs having almost no service at all), and there is no shortage of cars on the road.

Free public transport would suck more than $500 million per year of fare revenue out of the system, which could be better spent improving services.

The Free Tram Zone introduced in 2015 has not benefited most existing or prospective public transport users, but has resulted in free rides for those who drive into the CBD, and far worsened tram overcrowding at peak times.

PTUA policies

Reviewed: January 2016