I have been looking around a bit more about this topic and have uncovered a few interesting things. The first is this article in The Age earlier in the year touting the idea.
Free train, tram and bus rides would boost the number of trips by up to 30 per cent, ease traffic congestion, cut pollution and greenhouse gases, reduce road accidents, transform railway stations into activity and business hubs and generally make Melbourne a happier place to live, experts say.
It would cost the State Government about $400 million a year in lost revenue, but about $60 million would be saved each year by getting rid of ticketing machines. State subsidies already contribute about 60 per cent to the price of a ticket.
So collection costs around 6% of the the total cost, but still it would cost net $340 million dollars, which they are suggesting they can raise by a household levy of $100-200, which varies depending on access of the suburb to public transport. Which is great, except that its not only your starting location that needs be near public transport, but your destination as well. Perhaps a good way of making the people who have good access to public transport for both end of their commute fund public transport would be to actually make them pay a fare.
Another interesting argument on this is by the Public Transport Users Association, which, to my surprise given they are public transport advocates, came out against the idea.
It’s not the cost of public transport that puts people off using it. Just eliminating fares without improving services won’t shift the habits of enough people to justify the cost. But if service improvements can attract more people to public transport, we might as well maintain reasonably cheap fares so as to recover some of the cost.
…once you’ve made public transport free, the money for any additional services has to be found in government budgets. This means that the more well-used the system is, the more it costs the taxpayer – quite the reverse of the world’s best public transport systems, which come close to covering their costs (often despite relatively low fares) because they attract high patronage and hence high fare revenue.
The first point being that the cost is not really a barrier for most people, compared with convenience. To drive into the city costs more than the train so its already competitive if it’s convenient.
They also point out the experience of the the city of Hasslet in Belgium (population 70,000), which is often cited as a success for free public transport.
As a measure to revive a declining city centre by encouraging people to visit more often it has been an outstanding success. But it has been less successful at encouraging a shift to sustainable transport. A survey of bus passengers a year after implementation found that 18% were former cyclists, 14% former pedestrians and 23% former car users. In other words, the free service was actually more successful at reducing walking and cycling than at reducing car travel.
Obviously the mix of transport methods will be different in Melbourne or Sydney than Belgium, many fewer cyclists for a start, but I do wonder whether there would be as many people walking in from neighbouring suburbs (like me) if they could just jump on a free passing bus.
This highlights the value of attacking problems directly. If you want to reduce car commuting then put on a congestion charge, making public transport free will decrease all other forms of transport not just cars, which probably is not the goal.
Update: NSW Transport Minister, John Watkins suggests tax breaks for public transport, which public transport user Malcolm Turnbull ridicules. Malcolm argues that its just an attempt to shift the subsidy cost to the federal government, which of course it would be. It begs the question though of why we can shift the cost of buying a car to the federal government via a novated lease.