Labour’s fare cap numbers don’t add up. Show us the costings

The Taxpayers’ Union is calling on Labour to release the figures behind its claim that capping public transport fares across the country will cost the Crown just $65 million a year, after new analysis shows the true cost to the taxpayer could be three times as much.

Using publicly available 2024/25 data from New Zealand’s three largest public transport-using regions, the Taxpayers’ Union estimates the annual cost to be:

• Auckland: $118,061,733 to $141,051,370
• Wellington: $23,249,363 to $38,094,684
• Canterbury: $394,877 to $3,383,523

That puts the cost for just these three regions at $141,705,972 to $182,529,576 a year, potentially up to nearly three times higher than Labour claims for the entire country.

Commenting on this, Taxpayers’ Union spokesman James Ross said:

“These figures show Auckland, Wellington, and Canterbury alone could cost between 2.5 and 3 times what Labour claims the policy would cost nationwide. Something’s not adding up, and the public has a right to know why."

“Labour has had six months since its last announcement to crunch the numbers, yet it still can’t tell the public basic details like how many people would benefit. If we can pull together rough costings in 24 hours, Labour’s taxpayer-funded researchers can release their data today."

“Of Labour’s three policy announcements so far, none has been up-front with taxpayers. A Future Fund with no costings at all, a capital gains tax that would barely raise 38 percent of what Labour claims, and now fare cap numbers that look like they have been plucked out of thin air."

“Hipkins recently said voters don’t really care about the details. Even if that were true, hopefully Labour’s researchers do. If they want to regain credibility, Labour need to release the numbers."

ENDS


NOTES TO EDITORS:

Mean weekly spend per user was calculated by dividing farebox revenue by the number of boardings.

The proportion of the regional population which use public transport was taken from the HTS Transport Survey for 2024/25. The regional number of public transport users could then be calculated.

Three log-normal distributions (with low, medium, and high variance) were calculated for each region. A log-normal distribution was chosen as this reflects the pattern of public transport use, with large numbers of occassional users and a smaller number of high-frequency users above the $20 cap. This allowed us to calculate three variables:

• The share of users who spend more than the $20 weekly cap in each region.
• The number of public transport users in each region who would benefit
• The average weekly saving of someone who spends more than the cap currently in each region.

By multiplying the number of people who benefit by the average weekly savings, we could calculate the weekly and annual cost to the Crown of a central government-funded fare cap in Auckland, Wellington, and Canterbury.

These figures do not account for Waiheke ferries or Wairarapa-to-Wellington buses, both of which Labour have said will be excluded from the cap. Given the difference between Labour’s claims and our costings, however, the effect of these will be marginal.