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New passenger transport funding scheme proposed

New passenger transport funding scheme proposed by Transfund

Transfund New Zealand, which provides financial assistance to regional councils to subsidise bus and ferry services, has today released a consultation document seeking comments on a new passenger transport scheme which puts patronage funding on a long-term sustainable basis.

The proposed scheme will continue the current partnership approach between Transfund and councils under which subsidy costs are shared between both parties for each region.

The existing patronage funding scheme started in November 2000. It funds regional councils at a rate of 40 percent of the cost of subsiding services that were operating before November 2000 and up to 100 percent of the cost of new services that generate additional patronage above 1999/2000 patronage levels.

Under the new scheme, Transfund proposes to meet 40-50 percent of the cost of subsidising core patronage, ie, patronage levels three years prior to the payment year, and 60-75 percent of the cost of attracting additional passengers to the system above core patronage levels.

Policy and strategy manager Simon Whiteley says the new scheme provides an opportunity for councils to work with bus and ferry operators to maintain and improve existing services, as well as potentially adding new services. "By removing the distinction between the way baseline services and new services are funded, the proposed scheme will give councils greater flexibility to develop the whole passenger transport system in conjunction with the transport operator industry," he says.

The proposal also means Transfund and regional councils can monitor and assess the performance of public transport services, both nationally and region by region.

Mr Whiteley says monitoring is likely to cover the quality of services provided and costs of subsidies on a per passenger basis.

Detailed measures might include: the frequency and reliability of services, the proportion of passengers who have to stand, or the number of low-floor or low-emission buses in a fleet.

The resulting scheme will support the objectives of the government's New Zealand Transport Strategy which are to: assist economic development, assist safety and personal security, improve access and mobility, protect and promote public health and ensure environmental sustainability.

The proposed scheme supports two government priorities for land transport expenditure: reducing severe congestion and improving the funding and delivery of public transport. It will help to create an efficient and integrated mix of transport modes and make better use of existing and new public transport investment.

A copy of Transfund's consultation document on the scheme has been sent to all regional councils and territorial authorities, Local Government New Zealand, passenger transport operators, the Bus and Coach Association, government agencies such as the ministries of Education and Social Development, and other industry groups.

Copies of the consultation document, Proposed Funding of Bus and Ferry Services, can be downloaded from www.transfund.govt.nz.

Submissions on Transfund's proposal close on 30 June 2003. Following input of ideas, the resulting scheme will come into effect on 1 July 2004.


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