Supergold changes good

The government have confirmed the outcome of their review of the Supergold Card and the outcome appears quite good.

The changes are below.

  • Lift the moratorium on new services entering the scheme from 1 September 2015, and apply criteria for new services
  • Cap Crown funding for the scheme at $28.129 million per year for the next five years, with annual Consumer Price Index adjustments to account for inflation
  • Replace individual fare reimbursements for councils with bulk funding
  • Cap Crown funding for exempt services at their current levels, adjusted for CPI
  • Allow tendering on the Waiheke Island route where there is competition
  • Require SuperGold Card holders to purchase smartcards, such as the AT HOP card, as smartcard ticketing systems become available.

The lifting of the moratorium on new services and allowing competition for the funding on the Waiheke route is just logical so it’s good they’re being made. I actually think the biggest change will be that HOP cards will be required and that’s a really good change as it will give AT better stats as to trips being taken and should speed up bus boarding. It will likely require a bit of education on ATs part though. I would still like to see a Supergold branded HOP card with the concession pre loaded to make it even easier for card holders.

Winston Peters show’s he doesn’t get HOP

Winston Peters shows that he clearly doesn’t understand HOP – although I guess that shouldn’t be surprising

New Zealand First is urging SuperGold Cardholders who travel for free on Auckland public transport not to waste their money buying a prepaid card.

New Zealand First Leader Rt Hon Winston Peters says seniors are being pressured to spend $15 on an Auckland Transport prepaid HOP card and advises those who have done so to demand their money back.

“SuperGold Cardholders should demand their money back if they paid $5 for the card and the minimum $10 prepaid credit because the HOP card is simply an attack on the elderly.

“Auckland Transport’s HOP-card campaign has already signed up 11,129 SuperGold Cardholders.

“That means Auckland Transport has fleeced more than $166,000 from seniors who gain no advantage from buying the tag-on, tag-off card,” says Mr Peters, who introduced the SuperGold Card in 2007. “It is a grand confidence trick.”

“All they need for travel on the bus or for a train or ferry ticket is their SuperGold Card. They can travel free in Auckland from 9am on weekdays and all day on weekends and public holidays.

“A SuperGold Cardholder told us she would never use the $10 she was forced to load on the card and quite rightly asked, what is Auckland Transport doing with all the money,” says Mr Peters.

There are in fact many good reasons for SuperGold cardholders to get a HOP card.

  • While most card holders will likely be travelling off peak, many still travel at peak and a HOP card allows them to pay for their fare (and get the HOP discounts).
  • Perhaps more importantly is a SuperGold concession can be loaded onto a HOP card that means it automatically gives free travel after 9am.

If you wish to travel using an AT HOP card, you can have a SuperGold Concession loaded onto your card. This will save you having to get a free SuperGold ticket before you travel on trains and ferries. You may only hold one AT HOP card with a SuperGold profile on it. Travel commencing after 9am weekdays and all day on weekends and on public holidays will still be free and you will be able to tag on and tag off with your AT HOP card.

Travel commencing before 9am will be charged at adult fares to your HOP Money balance on your AT HOP card with at least 10% discount off single trip paper tickets (excludes NiteRider and Airbus Express bus services).

  • Using a HOP card to tag on/off at a train station is also easier than having to go to a ticket machine – something some older citizens seem to struggle with.
  • On buses the HOP card speeds up boarding making for quicker trips, not just for those with SuperGold cards but for everyone else and as we’ve discussed before that can have potentially big benefits for operational costs.

The reason I highlight this, is not so much for this specific example but that I wonder if this type of lack of understanding is perhaps a symptom of just how poor our PT has been for such a long time. Many people simply don’t understand why developments like HOP are so vitally needed. It’s also something that we need to be especially mindful of with an election coming up. In this specific case Peters would be better advocating for a HOP card that looks like a SuperGold card so that those eligible only need a single card in their wallet.

An RPTP Storm in a Tea Cup

It seems that every plan has something that gets people up in arms but that in the end turns out to be a bit of a storm in a teacup and for the draft Regional Public Transport Plan it seems that issue has been found.

The issue is around the Super Gold card and what will happen after the new fare structure is brought in. Here are the paragraphs that have got people worried.

The existing fares system in Auckland provides fare concessions for specific target groups. These will be retained during the AIFS transition period.
When integrated ticketing is in place, a review of concession levels and eligibility is proposed, including a possible change to SuperGold card use during the evening peak period (this is not available outside of Auckland) and tertiary discounts (these are often unavailable outside Auckland).
NZTA has sought a review of the evening peak senior concession with a view to its removal, on the grounds that it is nationally inconsistent and unaffordable

It’s unfortunate that any suggestion to change to policies like the SuperGold card kicks up such a storm. All that the plan is really saying is that the existing concession that Auckland currently gives will be reviewed and personally I think that is completely fair. Reviewing all of the various concessions should happen at the same time as regular fares are reviewed. My view is that in the off peak, when there tends to be plenty of spare seats, the perk isn’t such an issue but at peak times our trains and buses are often packed full of people so it really makes no sense to be giving anyone free travel during those times. Mike Lee has said that part of the reason Auckland rolled out the free off peak travel was due to bureaucratic difficulties but I assume that many of these should be resolved with the introduction of the HOP card so why not review the decision again.

Speaking of HOP and SuperGold, surely once the roll out is complete it would be ideal to combine the two cards. It wouldn’t be difficult to print the super gold logo on the cards and could make it easier for the elderly to use them as currently they will have to go to a machine and purchase a ticket using it. Going further I hope that there is eventually a review of how the scheme actually works, at least within Auckland. The proposed fare boundaries cover quite a large area and I feel that consideration should be made to retaining the free travel within the proposed zones but that travel outside of the zones, even outside of peak should perhaps be charged. Doing this would still allow elderly to retain mobility within their communities but prevent issues like what was found to occur with the ferries where people were using the perk for free cruises of the harbour. With the combination of the HOP card it should be very simple to manage.

Of course no matter how good any suggestion is (and I’m not saying mine is necessarily the best), this particular topic more than most is something that will be decided by the politicians and not the NZTA or AT. I really can’t see any politician standing up to the likes of grey power to argue for changes that would limit the use of the card.

Super Gold Card changes – a fairer future, or the beginning of the end?

The government has today finally got around to announcing changes to the Super Gold card scheme that provides pensioners with free public transport. Here’s the media release:

The Government is putting an extra $9 million towards the SuperGold card public transport scheme as part of a balanced package of measures that will improve efficiency and help ensure the scheme’s long-term viability, Transport Minister Steven Joyce says.

“The Government is committed to retaining the SuperGold card free off-peak travel scheme including the transport concession as it stands. Users will continue to enjoy the same benefits they receive now,” says Mr Joyce.

“The Government will put an extra $9 million into the scheme over the next two years to ensure it can keep up with growing demand – taking total Government funding for the scheme to $45 million over the next two years.

“However we are also seeking greater administrative efficiency from central government and councils to ensure taxpayers get proper value for money and users get the best possible services out of this funding.

“In addition we’ve set transport operator subsidies at a level that better reflects the benefits that flow to operators from the growing number of seniors using free off-peak public transport.

“We believe these changes strike a balance and will help ensure the long-term sustainability of the scheme in the years to come.”

At the time the scheme was set up in 2008 it was agreed that a review would be undertaken after 12 months to ensure the scheme’s ongoing viability. Transport officials have been discussing changes with regional councils and operators and are now in the process of amending existing agreements.

Changes to the scheme comprise:

• Regional councils and operators will be reimbursed at 65 percent of the average adult fare for the next two financial years 2010/11 – 2011/2012 (currently 75 percent).
• Regional councils absorb administration costs so funding can be redirected to the travel concessions.
• The NZ Transport Agency’s budget for administering the scheme will be significantly reduced.
• A moratorium will be placed on major new services entering the scheme for the next two financial years.

The new reimbursement rate is subject to a hardship clause.

“Where operators can provide evidence that they would not be able to continue to offer services to SuperGold card holders at a 65 percent reimbursement rate they can apply for a higher rate for these specific services – up to the original 75 percent.

“The Government has made it clear we don’t expect operators to profit from the scheme, but neither do we expect them to be out of pocket.”

Mr Joyce says the review process demonstrated the scheme is very popular with users and is providing improved mobility for older people.

“All those involved in the review have made it clear they want the scheme to be retained. My desired outcome is that operators, councils and ultimately SuperGold card holders all have certainty for the future,” Mr Joyce says.

Back in March this year a number of changes to the scheme were mooted, some involving potential cut backs. I blogged about it at the time. The response to the possibility of having the scheme cut back was pretty brutal, with many pensioner-advocacy groups immediately slamming the idea.

I’m quite fond of the Super Gold Card scheme for a number of reasons. For a start it boosts public transport patronage, which is always useful when trying to argue for more funding to be dedicated to PT. Secondly, I think it importantly enables pensioners to continue to fully participate in society even after they are unable to drive, or as a real alternative to driving. One of the tragic aspects of a car-dependent society is how quickly those who don’t own vehicles become second-rate citizens and anything to help prevent that happening is surely very welcome. Finally, the Super Gold card has proven to be an economic boon in some areas – such as Waiheke Island where many pensioners are encouraged by the free ferry to spend the day on Waiheke: which inevitably results in spending on lunch, mementos and so forth.

However, I am also wary that the system is somewhat open to abuse. For example, return trips to Waiheke cost an adult $33.50. If the operators currently get refunded 75% of that amount through the Super Gold Card scheme, then effectively all the operators need to do is push a button and they make $25. This is the problem of not having a smart-card ticketing system I suppose – and will be easily solved once we do get smart-card ticketing I hope!

The other thing I find problematic, which doesn’t actually apply to the Waiheke Ferry because it’s a commercial service, is that bus operators are already subsidised to run most of their routes – and the Super Gold Card money comes as a subsidy on top of the first subsidy. No wonder when the system first started we saw so many advertisements encouraging pensioners to utilise their “free” rides! The easiest way to fix up this problem, so that the operators are no longer able to “double-dip” on the subsidies they receive, would be to change all the contracts over to being “gross contracts”. Under this system ARTA effectively pays the operator a set amount of money to run the service, and takes the financial risk themselves. This means that the Super Gold Card subsidies would go to ARTA – helping to improve services.

The one thing that concerns me about the changes announced today is the shift from NZTA having to absorb the cost of administering the system to that becoming an issue for the Regional Councils. While in the scheme of things the cost might not be particularly large, it does seem logical to administer things at a national level (economies of scale and all) and NZTA generally seems to be an organisation with more money than the Regional Councils.

It will also be interesting to see what happens in two years’ time – as the proposed solution is only for the next couple of years.

Super Gold card being “reviewed”

Perhaps the only good thing Winston Peters ever did for New Zealand’s politics was introduce the “Super Gold Card”, allowing elderly free off-peak travel of public transport. There are a number of reasons why this is a good policy:

• It’s a good boost to off-peak public transport services by giving them the patronage they need to operate at decent frequencies.
• In places like Waiheke Island the local economy has significantly benefited from travellers taking the ferry for free.
• It enables those too frail to drive to still be well involved in their communities by being able to get around for free.
• It’s just a damn nice thing to do.

However, its costs have turned out to be fairly significant – around $18 million a year, of which $2 million alone is for the Waiheke ferries.

As a result of this cost, the government and NZTA are currently reviewing the scheme:

Transport Minister Steven Joyce says the government is committed to the scheme but some changes will need to be made because it is currently stand on track to exceed the available budget.

“The highest priority of the review process is to consider how to keep the scheme within the available budget of $18 million a year, while continuing to provide improved mobility for older people.”

Among other things, officials will consider:
• the level of reimbursement operators and councils receive
• how “off peak” should be defined
• the eligibility of certain high cost services- including the Waiheke ferry and the train service between Wellington and the Wairarapa

“The transport concession of the SuperGold card has an annual budget of $18 million dollars across the country – $2 million of that is currently spent on the Waiheke ferry alone,” says Mr Joyce.

The current review began in October last year and is expected to be complete by May of this year.

I reckon it’s pretty obvious why the costs have blown out, and it is symptomatic of what is wrong with public transport in Auckland at the moment. Because of the way public transport currently operates, generally routes are either subsidised or commercial (a small minority are gross-contracted where ARTA pays a set fee to an operator to provide the service and ARTA gets the money from fares). Subsidised routes are those where fares are ‘topped up’ by ARTA so that a decent service can be provided, while commercial routes effectively operate outside ARTA’s control.

This system will eventually be changed by the Public Transport Management Act to make it possible for all services to be ‘gross contracted’. This Act was passed in 2008 but hasn’t really taken effect much yet because… well I’m not exactly sure why, something to do with the timing of contracts being rolled over I think. Steven Joyce has indicated he doesn’t really like the PTMA very much, and is likely to amend it at least to some extent to reintroduce the current distinction between commercial and subsidised services, while still retaining a greater level of control over commercial services than currently exists.

But anyway, how does this all relate to the Super Gold Card? Well, most services that operate off-peak are subsidised services, meaning that ARTA assists the operator in making providing the service commercially viable. This happens everywhere around the world and is done to recognise the wider benefits that public transport provides, such as reducing congestion, improving environmental outcomes and alleviating the need to build more and more roads. When someone with a Super Gold Card gets on a bus, train or ferry their full fare is paid directly by NZTA to the operator. So let’s say the Super Gold Card doubles the number of elderly using public transport, then the operator receives twice as much money as they used to – and as a bonus doesn’t have to worry about handling it as NZTA send around a big fat cheque every once in a while.

What doesn’t happen, as far as I know, is a reduction in the amount of subsidy paid by ARTA (and NZTA who in another capacity help fund ARTA).So effectively the operator gets to “double-dip” on the public purse – enjoying both the increased amount of money they’re getting through the Super Gold Card scheme while still getting to keep all their previous subsidies. No wonder companies like NZ Bus have advertised like crazy to get elderly to use the Super Gold Card, it’s a win-win situation for them and they get to make out like bandits with the extra cash.

The solution is pretty obvious in my opinion, and that is for all services to become gross-contracted by ARTA. If this happened then the Super Gold Card money would go directly to ARTA and would help off-set the costs of contracting the service in the first place. Each dollar of Super Gold Card money would actually go into improving the provision of public transport in Auckland, rather than into the rather deep pockets of the various service operators. There would be no “double-dipping” by the operators and either the amount of NZTA funds required for the Super Gold Card could be reduced, or (preferably) the extra cash could go into helping to fund improved public transport services – like filling that $11 million hole in ARTA’s rail budget.

It beggars belief that Steven Joyce is so keen to improve the cost-effectiveness of public transport through crude measures such as imposing arbitrary farebox recovery ratios that (by forcing higher fares and therefore reducing patronage) could end up making public transport even less economically viable, while at the same time is also looking to weaken the very piece of legislation (the PTMA) that is designed to improve the cost-effectiveness of public transport.