Pensioners could lose free bus rides

Pensioners may have to pay for what were once free bus trips when the Government reduces its SuperGold Card Free Travel Scheme bus subsidies.

The Transport Ministry has told the Otago Regional Council it wants to cut the SuperGold card bus subsidy from 75% of the adult fare to 65%.

Dunedin's biggest commuter bus companies together face what could be a six-figure loss in revenue and at least one might consider leaving the scheme altogether.

The decision, which Transport Minister Steven Joyce's office last night confirmed had to be approved by the Cabinet, comes from a review prompted by concerns that demand was outstripping the $18 million set aside to fund the subsidies.

Council corporate services director Wayne Scott yesterday said bus companies would "wear entirely" the cut and would have to try to make up lost revenue under already very competitive service contracts.

"In theory, they could decide not to honour the SuperGold card discount, but even the 65% subsidy on the targeted, off-peak services is better than nothing, I suppose," Mr Scott said.

Dunedin Passenger Transport director Kayne Baas last night said his company might have to charge a top-up - possibly about 20% - to meet the shortfall between the subsidy and the full adult fare.

If that was not possible - or not palatable to the customers the company wanted to keep - it might have to consider leaving the scheme altogether.

It simply could not afford to absorb the "tens of thousands of dollars" it would lose.

"The Government says that operators are winning from this scheme, but we work to very tight margins and being underpaid for the service, well, it's a travesty and just another nail in the coffin," Mr Baas said last night.

Citibus chief executive Tony Collins learned of the cut when he was contacted late yesterday.

It was "actually quite significant" and while no revenue figures were available, Mr Baas' estimation sounded about right.

"We can't absorb that. What do you do? You can't suddenly reduce the cost of fuel, the cost of making a bus, or of wages. We operate on tight margins. Where do you claw back your costs?"

Mr Collins said he would work through the SuperGold contract and was looking forward to meeting the council officials who administered the contracts as soon as possible.

Mr Joyce was out of the country last night, but his office confirmed the next step in the process was for councils to discuss the changes with affected public transport operators, and said officials would work with each party to finalise agreements in the coming weeks.

In an earlier statement last night, Mr Joyce said the Government was "100% committed" to providing the free off-peak public transport services in the SuperGold card scheme as they stood.

Any change to the rate would include a hardship clause for any operators who felt that because of the lower rate, they were not being fairly compensated for services provided under the SuperGold card scheme.

In its April submission to the review, the regional council urged the Government to increase funding and to look for savings in premium passenger services such as Auckland's Waiheke Island ferry, which comprised 2% of all trips but took 11% of the subsidy.

Mr Scott said council figures did not show Dunedin operators were being overcompensated for taking part in the scheme.