Labour has announced plans to cap public transport fares at $20 a week in Auckland, Wellington and Christchurch, and $10 a week elsewhere in New Zealand if elected, positioning the policy as a cost-of-living measure for commuters and families.
The proposal would take effect from July 1, 2027, allowing passengers to make unlimited bus, train and ferry trips once they reach the weekly fare cap.
Labour leader Chris Hipkins says the policy is designed to make public transport more affordable while helping households manage transport costs.
“Our fare cap is a major cost-of-living commitment designed to put money back into the pockets of commuters, students and families.
“New Zealanders will be able to use public transport as much as they want all week for only $20 in our major cities and just $10 everywhere else – keeping more money in their back pockets,” Hipkins says.
Under the proposal, passengers would continue paying standard fares until they reached the weekly cap, after which all additional public transport trips for the remainder of the week would be free.
Labour says the policy would save the average user more than $1200 a year, benefit around 1.36 million public transport users and cost approximately $65 million annually.
However, Transporting New Zealand chief executive Dom Kalasih says the proposal raises questions around transport funding and whether lower fares would materially increase public transport use.
“The Ministry of Transport’s most recent Domestic Transport Costs and Charges Study in 2023 showed that urban public transport charges recover only 28% of the cost to provide the system, with the rest subsidised by taxpayers,” Kalasih says.
“Ultimately then, the proposed $20 fare cap would in essence be a further subsidy to a mode that is already by far the most heavily subsidised.”
Kalasih also points to research suggesting fare prices are not a major barrier to public transport patronage.
“It’s unlikely the cap will get more people using public transport. An NZTA study released early last year showed that the cost of the journey is only the seventh biggest obstacle to people using public transport,” he says.
The proposal has also drawn criticism from National, which argues Labour’s costings do not align with the party’s projected savings and user numbers.
National Party campaign chair Simeon Brown says Labour’s figures warrant closer scrutiny.
“If 1.36 million people are each saving more than $1200 a year, the cost of delivering those savings would exceed $1.6 billion annually – not $65 million.
“On the other hand, if Labour’s $65 million cost estimate is correct, then spread across 1.36 million public transport users, the average benefit is less than a dollar a week,” Brown says.
Brown is calling on Labour to release the modelling behind the policy.
“Kiwis deserve to know who actually benefits, how much they benefit, and what this policy will really cost taxpayers.”
Labour transport spokesperson Tangi Utikere says the fare cap would provide certainty for households while supporting greater use of public transport services.
“Families deserve certainty. Under Labour’s weekly fare cap, people will know exactly what the maximum cost of getting around will be each week.
“We want people catching buses, trains and ferries more often because that means lower household transport costs, less congestion on our roads and stronger public transport networks,” Utikere says.
