One of the most popular parts of the New South Wales government’s Opal public transport card – free trips after 8 journeys in a week – would be abolished if the pricing watchdog, the Independent Pricing and Regulatory Tribunal (IPART) gets its way under major reforms to the way fares are charged.
The tribunal has released a draft report on the future of public transport fares, with chairman Dr Peter Boxall saying they want to create a fairer, more efficient and more integrated system for Opal card users.
Fare cover just 20% of the $6 billion cost of public transport and wants to shift to a distance-based system which doesn’t penalise passengers who switch between trains, buses and ferries on their trip.
“The package we’re proposing would make public transport fares more integrated by calculating fares for multi-mode journeys in the same way as for single-mode journeys, so customers could switch modes without being penalised,” Dr Boxall said.
As an example, a commuter on bus from North Parramatta to Parramatta train station who then catches a train to Town Hall currently pays $6.92 during peak hour. Under the IPART proposals, they would pay $4.74, a 32% saving.
But the reforms will see the gap between Opal fares and the cost from using a paper ticket widen to 40%, to reflect the higher cost of the paper system. The IPART says paper ticket premiums in other jurisdictions range from 18% in Perth to 102% in London.
The pricing regulator argues the current Opal system, where travel is free for the rest of the week after 8 trips, means the 62% of passengers who travel fewer than 9 times a week are subsidising frequent users at a cost of $150 million annually, saying it’s a “perverse incentive for regular commuters to take unnecessary shorter trips earlier in the week to qualify for free travel on their longer and more expensive trips”.
“We are also proposing to reduce the number of free trips enjoyed by some, so more passengers can access lower fares without further increasing the burden on taxpayers,” Dr Boxall said.
Changes to the Opal system would see the current expenditure cap increased from $60 to $65 and passengers paying for the 10 most expensive trips in a week and getting a credit on the remainder.
He says 60% of passengers in the area stretching from Wollongong to Newcastle and west to the Blue Mountains would pay less from next year.
“Fares would better reflect the cost of providing the services, so there would be an even bigger discount for off-peak rail travel than there is currently, while longer distance journeys would become relatively more expensive compared to shorter distances,” he said.
The IPART wants increase fares over the next three years by the average annual before inflation of 1.8% for rail, to 3.3% for bus and light rail, and 3.5% for ferries.
Over the next three years, the cost of the public transport question is predicted to rise by $900 million – from $5.5 billion next financial year to $6.4 billion in 2018-19.
The IPART is now seeking feedback on the draft fare reforms. Submissions are open until 5 February 2016. The new fares would come into effect on 1 July, 2016.
Here are the some of the other key points of the IPART draft report, which you can find online here:
- An integrated fare structure for passengers needing to switch between trains, buses, ferries or light rail on the same journey. Instead of being charged twice or more when switching from one mode to another, the fare would be charged based on the distance from origin to final destination, so that most multi-mode passengers would pay 20% to 50% less for each journey.
- Increasing the off-peak discount on trains from 30% to 40%, meaning lower fares for more than 97% of off-peak rail customers. Currently 56% of all rail journeys are made in off-peak periods. Increasing the discount on off-peak fares would better reflect the lower costs of providing off-peak rail services and promote better use of spare capacity on the rail network.
- Changing fare bands so that they are based on the straight-line distance from origin to destination for all modes, removing the anomaly that while bus and ferry passengers currently pay for distance travelled based on a straight line, train passengers pay according to track distance. This would lead to significant savings for some rail passengers.
- Increasing the per kilometre rate so that fares for longer distance journeys would increase relative to those for shorter distance journeys. This would affect those travelling longer distances (bus fares more than 15km, and rail fare more than 65km), but IPART says long distance fares would still be lower than in 2009.
- Setting the Gold Opal Card cap at 40% of the concession fare ($3.60) in place of the current daily cap of $2.50, which has not increased since 2005. Seniors without a Pensioner or War Widow/ers Card would have an Opal Concession Card ($9 daily cap) rather than a Gold Opal Card.
- Increasing the daily cap from $15 (Monday to Saturday) to $18 Monday to Friday, with the proposed lower $7.20 daily cap to apply on Saturdays and Sundays.
Pricing paper tickets at 40% more than Opal fares to reflect the costs involving two ticketing systems. Paper ticket premiums in other jurisdictions range from 18% in Perth to 102% in London.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.