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Passenger transport funding

Land Transport NZ financially assists regional councils to provide passenger transport through two separate outputs:

  • Community services provides funding for bus and ferry services through the patronage funding scheme. The scheme is designed to increase patronage to ease traffic congestion and to improve service accessibility.
  • Social services provides funding for the total mobility scheme in each region. This scheme subsidises taxi fares for people with disabilities.

Patronage funding for buses and ferries

The revised patronage funding scheme, which replaces an earlier scheme, began on 1 July 2004. This scheme has a two year phase-in period: 2004/05 and 2005/06. During this period, financial assistance to regional councils will move from the regional council’s 2003/04 financial assistance rate (FAR) in two equal steps towards a FAR of 50% for 2006/07.

Once the scheme comes fully into operation, our funding contribution to a regional council will have two main components: core and growth funding. Core funding maintains and improves bus and ferry services in a region. Growth funding encourages new services or enhancements to existing services by funding additional services or features at a higher financial assistance rate in the early years of their operation. Full details of the scheme are contained in the report The revised patronage funding scheme (Word doc, 142 KB).

In June 2005 the Minister of Transport announced that he will be reviewing the current policy of funding bus and ferry services and infrastructure based on patronage. To allow time for this review to be completed, our Board agreed to extend the phase-in period for at least one additional year. They have confirmed the FAR for 2006/07 will be 50%. The Board has also confirmed that it will consider applications for passenger transport infrastructure during the extended phase-in period. Further information can be found in General circular 05/04 (Word doc, 85 KB).

The Competitive pricing procedures manual Volume 2 - Passenger transport contains procedures to ensure passenger transport services are procured in an efficient and effective manner. We are currently reviewing these procedures and expect to have revised procedures in place towards the end of 2006.

For more information on the patronage funding scheme, please contact Natasha Abram on direct dial: (+64) 4 931 8781 email: natasha.abram@nzta.govt.nz

Funding for rail passenger transport

Rail passenger transport services that qualify for funding under the community services output class are funded at a financial assistance rate of 60 percent. Qualifying passenger rail administration receives a financial assistance rate of 50 percent.

Funding for total mobility

Total mobility is a national scheme designed to increase the mobility of people with serious mobility constraints. Most regions provide people who are eligible to join the scheme with vouchers that entitle them to a 50 percent discount off the normal taxi fare.

Land Transport NZ provides financial assistance to regional councils who operate this scheme by meeting 40 percent of the costs of eligible taxi fares. Financial assistance is also provided for the purchase and installation costs to replace existing wheelchair hoists, with Land Transport NZ meeting 60 percent of the costs funded by regional councils.

The Ministry of Transport recently completed a review of the scheme. The Minister of Transport is seeking a significant number of improvements as a result. These changes have been organized into two phases. The full report on the review can be downloaded from the Ministry of Transport’s website. General circular 05/07 Improvements to the total mobility scheme (PDF, 38 KB) gives an outline of the changes.

As part of this review, a survey of users, administrators and transport operators involved in the total mobility scheme was conducted in early 2003. The results of this survey are available through Total mobility 2003: a survey of users, support agencies, regional councils, and transport operators (Word doc, 754 KB).

Documents