In the earlier post on congestion tax it was brought up why shouldn’t we just reduce congestion by making public transport free. While it has some appeal to me in that I would be able to travel free to work everyday, and it would no doubt reduce congestion. I don’t think this is a good idea for a few reasons, not least the cost on the residents of Wagga Wagga paying for the Sydney train service.
I’ve been looking around to find some figures on how much subsidy is typical for the various forms of public transport. This was a little difficult to find but eventually I found the Independent Pricing and Regulatory Tribunal Report for 2006 with regards City Rail.
The Tribunal’s 2006 determination means that in 2006/07, cost recovery is expected to be 26.0 per cent. Fare-box revenue is expected to fund 22 per cent of CityRail’s total costs, while other revenue to fund an additional 4 per cent of costs. Government expenditure is expected to fund the remaining 74 per cent (including concession and free travel funding) (Figure 3.4). This level of government expenditure is equal to around $707 per household in NSW.
So the households of Wagga Wagga pay $707 each to run the Sydney trains service. There is also a comparison of the cost recovery for the other forms of public transport. It is surprising to me that rail is more heavily subsidised than Ferries.
The left hand graphs show the level of subsidy for regular tickets. For buses its around 25%, for ferries about 50% and rail 75% or so. I must say, this surprises me greatly. Certainly I had assumed that at least 50% of costs were recovered by train fares. Its difficult to image the trains being patronised at all with fares four times their current level.
The report suggests that trains are more heavily subsidised because they reduce congestion much more than buses, certainly a good reason. I’m not entirely sure what this means with regards free public transport, except for the fact that with trains at least, we are already much of the way there. It would be interesting to see what the staffing costs are for city rail and test the contention that it wouldn’t cost any more if we got rid of the whole ticketing operation.
No real conclusions here, but I though it would be interesting to throw in some data.
More discussion of these issues here.