The Government will stop funding free public transport for children and half-price fares for young people under 25 by the end of next month.
Hundreds of thousands of people will be affected by the move, which raises the cost of bus, train, and ferry fares amid ongoing cost of living pressure.
For most regions, age-based public transport fares will change on May 1.
Scrapping the Labour government-era subsidies had been part of National's pre-election campaign commitments.
However, the change will not affect pre-existing discounts funded directly by councils, which usually include concessions for tertiary and secondary school students.
It will also not affect other Community Connect discounts introduced by the previous government, which new Transport Minister Simeon Brown has opted to keep.
He said in a statement: "I am committed to ensuring there is targeted support given to those who most need affordable fares, while also balancing this against the cost pressures facing the entire transport system.
Half-price transport for under-25s would also be on the chopping block under National's tax plan. (Source: 1News)
"That is why those with Community Service Cards and those using Total Mobility services will continue to pay half-price fares."
The total cost of the initiative had been projected to be $327 million over four years.
In its December mini-budget, the Coalition Government gave councils 90-days notice that it would stop funding the concessions. It has also told councils it will help cover the costs of removing the two age-based discounts from fare collection systems.
Brown's office didn't comment on the expected costs of the change when asked.
Councillor Thomas Nash, chairperson of Greater Wellington Regional Council's transport committee, told 1News that it would cost around $10-12 million a year for the council to extend the youth concessions on its own.
"We considered this but the rates impact would be unmanageable," he said.
"It's unaffordable for us to absorb the cost of these discounts without support from government."
Around 8.5% of public transport trips taken in Greater Wellington had been with the soon-to-be-cut concessions. Nash said he wasn't expecting people to stop using public transport as a result of the change, but that it could slow patronage growth.
"Public transport patronage will grow, but maybe not as quickly as it would have with these incentives."
He encouraged people to check whether they were eligible for a Community Services Card concession, which retains a half-price discount on public transport fares.
"A lot of people are eligible, but they don't have it," Nash said.
Meanwhile, further north, Auckland Transport (AT) growth and optimisation manager Richard Harrison said the agency would reach out to affected customers in early April.
Nearly half a million eligible cards had the new youth concessions applied last year.
"Teams did explore whether we could continue the free and half-price travel for young people from within our own AT budgets, but this was ruled out because of our constrained financial position," he said in a statement.
"At this stage, we don’t expect these changes will have a significant effect on our passenger numbers, but we’ll be closely reviewing our patronage statistics from May to look for any trends in children and youth travel."
Council-funded free weekend fares for under-16s would also remain in place. The initiative was first started in 2019.
Half-price fares to continue in Christchurch
Free travel for under-13s would be expiring in Christchurch, however half-price fares for young people would continue, meaning ticket prices would "mostly stay the same".
In 2022, the Canterbury Regional Council approved trialling a new flat fare system, which included discounted fares for under-25s.
It came before the announcement of central government funding for youth concessions. As a result, the council will continue to fund half-price fares.
Environment Canterbury public transport general manager Stewart Gibbon said: "Families in Greater Christchurch and Timaru will need to top up their children’s Metrocards in preparation for fares being reintroduced from May 1.
"The sole change for our customers in Greater Christchurch will be the removal of the free fares for 5-12-year-olds.
"Children in this age group will now need to pay the $1 concession for their journeys from May 1, following the removal of government funding for this concession.
"In Timaru, the free fares for 5–12-year-olds on Metro School and Temuka services, and the MyWay by Metro concession for 19–24-year-olds, will cease on April 30."
Bus patronage increases back to pre-Covid levels
Bus patronage has been returning to pre-pandemic levels across most major centres, according to usage data from the past several weeks.
In Christchurch, January public transport patronage soared to 110% of pre-pandemic levels, whilst bus usage in Greater Wellington also grew on pre-Covid numbers.
Auckland bus patronage has returned to around 95% to 100% of 2019 levels.
However, ridership growth on commuter trains in Auckland and Wellington has lagged behind, with services in the capital so far returning at about 77% of their pre-Covid loads.
High temperatures saw multiple rush hour services on Auckland's train network cancelled yesterday. (Source: Breakfast)
Lower rail use has been blamed on fewer rush hour commuters, due to the rise in work-from-home, and rolling closures on Auckland's train network.
In his statement to 1News, Brown echoed language used in his Government's new transport policy statement, as he explained the "significant" funding pressures involved.
"While there has been a 71% increase in funding for public transport over the past five years, patronage has decreased by 23%. This has partly been caused by Covid-19 restrictions, but numbers have not increased back to pre-Covid levels.
"The private share of funding for public transport over the same period has also fallen from approximately 32% to 11% which is putting significant funding pressure on local councils and the National Land Transport Fund."
The Transport Minister has signalled his Government expects local government to help reduce the subsidy levels of public transport services and increase "third-party revenue".
"Under the last government, farebox recovery fell from 40% of running public transport services to 13%, and so the reality is that we need to ensure that people who use public transport are helping support it," he told Parliament earlier this week.
Farebox recovery is the percentage of operating costs which are covered by fares.
At Budget 2023, the previous Labour government announced it would permanently axe fares for those under 13 and keep half-price discounts for young people aged 13 to 24.
The initiative came after a temporary half-price discount for all passengers came to an end. Labour first introduced the subsidies as a cost-of-living measure in 2022, alongside discounts on fuel tax and road user charges.
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