The Labour Party’s long-stalled election policy train finally pulled away from the platform today, first stop an ambitiously costed $20 cap on weekly public transport fares in the three main cities.
Passengers in Dunedin and regional areas with qualifying public transport will be offered a $10 weekly cap.
The party estimates average weekly savings for Auckland and Wellington users of around $25 (or $1200 a year), $10 in Christchurch and, for example, $24 in Hawke’s Bay.
Labour talked up the cap in boiled down, populist terms:
“Here’s how it works: Ride as much as you like and never pay more than $20. No catches. No paperwork. Just tag on like normal and once you hit $20, every extra trip that week is free.
“And if you’re outside Auckland, Wellington or Christchurch, the most you’ll pay is $10. The fare cap will be in place by 1 July 2027.”
The party is signalling that further policies coming down the line will also be attempts to relieve economic pressures on households.
Leader Chris Hipkins told media amid public address announcements and hissing and screeching of trains at the Waitematā station in Auckland: “We’ve got a series of cost-of-living measures. Not every one of them will benefit everybody but this one will benefit hundreds of thousands of people.
“There’s more cost-of-living relief on the way.”
For the public transport cap, Hipkins and transport spokesperson Tangi Utikere are relying on fare box collections from operators, extrapolated out across the metro centres and regions. They believe there is ample service capacity to handle any extra passengers, although their calculations appear based on an extra five million boardings.
Even with an upbeat estimate of usage growth of 6 percent, Labour budgets the cost to the taxpayer at just $65m a year.
They say that money will come from the National Land Transport Fund, which the coalition Government says is already over-subscribed, but Labour promises to shuffle by de-prioritising projects such as one of National’s prized big road builds.
Hipkins was quizzed about Treasury concerns over the state of that fund, and how he could justify putting another $65m demand on it. He said he took such concerns seriously but believed money could be found from within the fund by re-examining existing, dubiously costed National Party roads of national significance (RONS).
“We’ve delivered a lot more detail on this policy than the current Government has delivered on RONS.”
While the fund’s allocations are done yearly, the commitments cover three-year periods.
Asked if Labour intended the cap to be permanent, Hipkins said: “Our intention is for it to be ongoing, yes.”
It has been six months since he announced twin initiatives on three free GP visits and an NZ Future Fund. He’s since endured concerted political criticism of having no new measures to put before New Zealanders.
Asked if he was relieved to finally get a policy out there, and that monkey off his back, he quipped: “Oh, plenty more to come.”
If Labour’s lowish $65m costing is accurate, and its policy proves appealing in the three metropolitan areas with sizeable voting bases, there could be a temptation for the incumbent Government to match or better the policy, to neuter the political advantage.
“That’d be a good outcome for New Zealand consumers, it’d be a good outcome for those using public transport,” Hipkins said.
“One of the reasons we’ve left our policy announcements up until now, and there’s more to come, is that we wanted to give the Government an opportunity to actually do something to support New Zealanders in the cost of living, that we would support.
“There was a possibility that they might have announced something like this in the Budget. They didn’t, so we are.”
Public transport fares were halved following the Covid pandemic, at a much greater annual cost of $130m-$150m.
It was pointed out to Hipkins and Utikere they could have gone fully free.
“This is a policy we believe is affordable and we can deliver relatively quickly,” the leader said.
Some people would benefit more and others less through the public transport fare cap, depending on how often they travelled and what part of the country they were in.
Auckland already has a $50 cap on public transport weekly fares, a first-term policy commitment of Mayor Wayne Brown. Passengers using AT Hop cards have the values of their rides totalled before qualifying for free use beyond $50.
Labour’s promotional material says 1.36 million New Zealanders over the age of 15 use public transport across a year.
Its policy covers existing commuter services, not longer-haul routes such as InterCity buses or the Auckland to Hamilton train, the Cook Strait ferries or the TranzAlpine rail route.
After the policy announcement, Hipkins went with paper ticket in hand in search of a train to catch, eventually settling on a southbound service via Newmarket on which he recorded video messages for social media and campaigning.
By afternoon, the Labour Party had started a donations drive to its email database, oddly asking for donors to give $20, to match the level of the spending cap.
National’s campaign chair Simeon Brown immediately labelled the fare cap a policy that “bribes New Zealanders with their own money”. He decried a return of Labour’s spendthrift habits.
Not content to slam the $65m annual cost estimate, Brown came up with his own number (adopting a Budget-style, four-year forecast period) to accuse Labour of throwing money around.
“The National Land Transport Fund is already oversubscribed. The idea of siphoning a quarter of a billion dollars from the NLTF to pay for this is fanciful. Ultimately this policy will require higher taxes or more borrowing.”
(In a reminder that almost all parties’ policies use taxpayer money to benefit taxpayers, within 90 minutes of Brown’s statement, Prime Minister Christopher Luxon and Agriculture Minister Todd McClay used the launch of Fieldays near Hamilton to announce funds for projects totalling $143m in new spending on agricultural innovation and land use.)
The Taxpayers’ Union was dismissive of Labour’s policy:
“This is dressed up as a cost-of-living policy, but it does nothing for the vast majority of households. Only 6 percent of Kiwis are regular public transport users, and nearly 90 percent of rides are in Wellington, Auckland, and Christchurch.”
Others embraced the cap idea. Auckland Councillor Shane Henderson, a Labour representative for west Auckland, tweeted:
“This will make Auckland a better place to live and help so many people, especially the most vulnerable.
“It directly eases cost of living, it even helps with our climate emissions and air quality. I am delighted beyond words. Let’s win this thing and make it a reality.”
And, unsurprisingly, Free Fares, a grouping of more than 100 organisations from local government, faith and community groups, welcomed the proposal.
Spokesperson Chris Hawkins said: “This policy will help to reduce congestion, air pollution and carbon emissions while of course conserving fuel in the context of the ongoing geopolitical instability in the Middle East.
“This is exactly the kind of climate policy we need to see more of, to reduce our emissions while improving life for everyday people.”
