Shakeup of Melbourne public transport fares could ease congestion, improve affordability, according to Infrastructure Victoria

By Shannon Jenkins

Thursday September 24, 2020

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Major fare reforms to Melbourne’s public transport system could benefit taxpayers and reduce congestion, according to a new report from Infrastructure Victoria.

The report published on Thursday notes that Melbourne’s public transport network costs nearly $2 billion to operate each year, but fares cover less than 30% of the cost.

Pre-pandemic, the system has faced three major problems: overcrowding in peak times and underuse at other times; fares that don’t encourage the best use of the system and don’t give public transport users much choice about how and when they travel; and an unfair fare structure.

The system also struggles to cope with incidents such as cancellations, quickly affecting thousands of commuters, the report says.

Infrastructure Victoria has argued that when COVID-19 restrictions are eventually removed, Melbourne’s public transport system will once again be under pressure.

However, the agency is optimistic. It says the pandemic has “created greater flexibility in work and commerce”, and fare reform can not only utilise these benefits, but can address the preexisting problems.

“Fares can be set to make the best use of the entire transport system, and can provide incentives for people to change their travel behaviour and make the best travel choices for themselves, as well as for the wider community,” the report says.

“While the top 20% of income earners make up the largest group of public transport users overall, fare reform can significantly improve travel choice and affordability for low income travellers and households.”

Infrastructure Victoria has recommended a number of fare reforms which could be implemented in Melbourne in the short to medium term, including:

  • Introduce different fares for each public transport mode, based on the costs and benefits of each mode, and to encourage the best use of public transport services. Fares should be lowest for buses and slightly more for trams, with trains being the highest priced of the three modes.
  • Introduce peak and off-peak fares on trains, trams and express buses in places and at times that are at capacity.
  • When CBD public transport travel patterns return to pre-COVID-19 levels, a new “City Zone” on the metropolitan train network should be created, covering the CBD, City Loop and Metro Tunnel.
  • Remove Melbourne’s free tram zone, as it “fails to price travel in a busy tram corridor that is already at capacity”. The zone is also unfair, mainly benefiting those who live in or drive to the CBD, while most Victorian taxpayers foot the bill.
  • Improve ticketing to make the system more convenient and fairer, and allow for the introduction of new digital platforms for planning, booking and paying for travel.
  • Improve how fares are set, to balance multiple outcomes to make best use of the network and to improve fairness. This balance must be transparent, using clearly defined objectives determined by the Victorian government, with an independent body to advise on and monitor transport prices.

Infrastructure Victoria modelling proposes defining a peak fare time of 7:30am to 9:30am, and 4:30pm to 6:30pm on weekdays. During these periods, a bus trip would cost between $1.25 and $2.50, a train trip would cost between $2.50 and $5, and trams would cost $2.50.

These reforms would allow most people to be better off — especially low income households — the report notes. Up to 71% of people could pay less to travel on public transport, with people on the lowest incomes paying 26% less for fares on average.

Other potential benefits include relieved pressure and crowding during peak periods, more people using public transport, more people using buses, and fewer cars on the roads, Infrastructure Victoria notes.

“Ultimately, fare reform means that Melbourne’s transport users would be the equivalent of $520 million a year better off in lower cost public transport alternatives, reduced crowding and congestion and better environmental outcomes,” it says.

Two fare changes could be implemented immediately: introducing peak and off-peak fares and removing Melbourne’s free tram zone would support social distancing on public transport by spreading demand across the day and across different modes, and reducing crowding on CBD trams.

An independent adviser to recommend and review transport prices could also be immediately appointed, signalling the start of a broader reform process and providing the government with guidance on future objectives.

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