THE HYSTERICAL cries over Australia’s petrol prices are not being reflected in a rush to forsake the private car for public transport.

The Federal Government is being warned daily that the ‘anger and outrage’ over petrol prices will see it replaced at this year’s election. But it seems all this huff and puff is over less than 3c a litre, or the price of a cappuccino when buying 100 litres of petrol. While that $3 is important to some, it is not to others. Yet we quibble over less than 3c a litre.

Petrol in Australia is far too cheap. The cost does not reflect that oil is a finite resource and that its over-use is causing serious damage to our planet. But one suspects that if the cost doubled tomorrow, there would be no rush to use public transport, particularly in Canberra.

The ACT Government’s annual contribution of $55 million to provide the ACTION service is often referred to as a loss, but the $40 million spent on building and maintaining roads is regarded as the motorists’ right. Motorists complain about being slugged for registration, insurance and the like, but their contributions do not go close to covering the cost of the damage that motor vehicles cause. This applies especially to heavy road transports.

It applies also to the under-charging for car parking in most areas of Canberra. The land on which car parks are placed is valuable and the ACT Government is forgoing considerable revenue with the current use and charges. It is another example of a subsidy to the motorist, but one that only a ‘very brave’ political decision would change. Paying money to ACTION is one thing, encouraging increased use of it by realistic parking charges is another.

The value of public transport was well demonstrated in Sydney and Canberra during the Olympic Games. But with the Games over, the private vehicle has recovered pride of place as the means of transport for most people.

About 30 per cent of Sydney’s commuters use public transport, which would struggle to carry many more without considerable improvement. But, in Canberra, less than 6 per cent of commuters use public transport.

Surveys have shown that more people would use ACTION if it provided a better service, but this cannot be achieved without a further injection of government money. Despite survey results, there is no guarantee that an increased subsidy would achieve a marked patronage increase. Indeed, given the attachment to the private vehicle in Canberra, there is little likelihood that this city will ever have an effective public transport system.

This week’s draft report by the Independent Pricing and Regulatory Commission effectively acknowledged this. The report said, ‘The commission believes that there is a compelling case to move towards higher real fares because of the low elasticities and the need to shift more of the recovery of ACTION’s costs on to the users and away from the taxpayers. The commission believes that a real increase in fares of 2 per cent per annum is warranted and is likely to be the only way that forecast increases in fares revenue can be achieved.’

Put perhaps a little crudely, the commission is saying that no matter what ACTION does, it cannot expect to increase patronage markedly. It is true that many of its users have no reasonable alternative form of travel and, if they did, they may not use ACTION either. Those who can catch direct services to major centres are generally well served, but those who must change buses can have journeys that take four times longer than by private vehicle.

Given these difficulties, and the high cost of running ACTION services off-peak, there is a need for a more creative public transport model for Canberra. Neither ACTION nor Canberra Cabs seemed enthusiastic last year when a demand-responsive transport system was promoted. But it has merit, especially if augmenting ACTION’s trunk and other major routes.

Such a system might, heaven forbid, require some cooperation between ACTION and Canberra Cabs. The latter has a sophisticated communication system that, by its own admission, has plenty of spare capacity.

Of course, taxi owners would not want to damage their existing business, but taxis also have plenty of unused capacity. Assuming the will to create something less than a taxi service but more flexible than a bus service, the challenge would be to create a demand for it. Surely, if the cost of a cappuccino threatens our national government, people could be persuaded of the economic benefit at least of reducing the number of cars in each family. Even now, the occasional use of a taxi can be a more sound economic choice than buying a second car.

Meanwhile, committed ACTION passengers, especially pensioners, seem likely to face the greatest impact of the recommended overall 2 per cent fare increase. The pricing commission takes a dim view of the current discounts available to pensioner and periodical fares.

While the benchmark for concession fares is 50 per cent of the equivalent adult fare, the commission notes the pensioner daily fare of $1.20 represents a concession well in excess of 50 per cent. ‘As a result, the commission again suggests that pensioner off-peak daily tickets be set at 50 per cent of the equivalent adult ticket price . . .,’ its report said. Care should also be taken to maintain the same 50 per cent concession benchmark against adult fares for all other ticket types. ‘Whilst this may imply an increase in the cost for some concession fares, such changes are likely to be small and would only be restoring fares to levels set by previous policy benchmarks.’

The commission believes such price and policy changes will not have any major adverse social impacts on ACTION’s customers. It also notes that the concession daily, concession weekly and adult monthly one-zone tickets all appear to cost less than 50 per cent of their adult equivalents on an average fare per-ride basis, although the extent of discounting is not as great as for pensioner off-peak daily tickets.

People most likely to have alternative travel options are also targeted. The commission says there has been a drift from weekly to the relatively cheaper monthly tickets. This suggests the need to reduce the discount on monthly tickets to improve passenger yield.

By Graham Downie

The Canberra Times 23 February 2001

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