New farebox policy aims to improve efficiency of publictransport


The NZ Transport Agency has announced a new ‘farebox recovery’ policy aimed at improving the efficiency of public transport in New Zealand and ensuring that the costs of providing services are shared equitably between public transport users, ratepayers and road users around the country.

The term ‘farebox’ describes the revenue collected from tickets purchased by public transport users, and a  farebox recovery policy sets out the contribution users are expected to make to the operating costs of providing public transport services.

NZTA Regional Partnerships and Planning Group Manager Dave Brash says the policy agreed by the NZTA’s Board in April requires all regional councils to set their own farebox recovery policies and ratios by 1 January 2012 as part of their Regional Public Transport Plans. A farebox recovery ratio measures the proportion of the operating costs of public transport services covered by fares, and is typically expressed as a percentage.

Mr Brash says regional councils’ farebox policies should identify a target ratio or range, explain why it has been chosen and how it is to be achieved.

“The proportion of operating costs covered by passenger fares nationally has declined from 58 percent in 2001/02 to 46 percent in 2008/09. The NZTA is committed to improving the long term efficiency, effectiveness and sustainability of public transport in New Zealand, and that means preventing any further decline in the percentage of operational costs covered by passenger fares.”  

The NZTA’s policy aims to achieve a minimum national farebox recovery ratio of 50 percent by 2018. This timeframe acknowledges investment cycles and the fact that gains in farebox recovery ratios from network or service improvements will develop gradually. The national ratio will be measured by aggregating revenue and operating cost information from all regions.

Mr Brash said reaching the national ratio of at least 50 percent would rely on maintaining or improving performance in the larger regions of Auckland, Wellington and Christchurch where the biggest gains can be made.

“These regions currently receive approximately 90 percent of the NZTA’s investment in public transport services, and they account for about the same percentage of national patronage.  It stands to reason that they will support the bulk of the national farebox recovery ratio target.”

Mr Brash says the 50 percent target can be achieved in a number of ways, including improving the structure of public transport services, increasing patronage with better quality, more convenient services, improved reliability, simplified fare structures and integrated ticketing systems.

Regional councils will continue to provide different levels of subsidy to different services, but the intention is for the NZTA to have an opportunity to influence their approach given the substantial amount of NZTA funding involved.

“We want to ensure that we are getting the best possible return on the government’s investment in public transport services and infrastructure.  Farebox recovery performance is one important indicator of this.”

Mr Brash says the NZTA will be working closely with regional councils to implement the new policy and work towards achieving the national target.