Minister guarantees free bus scheme

Transport Minister Steven Joyce guarantees Dunedin bus companies will be compensated so they can continue to be part of the SuperGold card free transport scheme.

If the companies were in hardship, they would either get a subsidy somewhere between 65% and 75% of the full adult fare - or the subsidy would not change from the present 75%, Mr Joyce said in a statement yesterday.

The assurance followed the Transport Ministry telling councils it would cut the SuperGold card subsidy from 75% to 65% of the full adult fare after a review prompted by concerns the scheme would outstrip the $18 million set aside to fund it.

Dunedin Passenger Transport director Kayne Baas and Citibus Newton general manager Tony Collins warned their companies would struggle to absorb the loss, while Mr Baas said DPT might have to consider a top-up charge or withdraw from the scheme.

Mr Joyce said in a statement yesterday companies contracted to deliver the SuperGold scheme had to provide the service free of charge and, in a letter to the Otago Daily Times, it was "totally incorrect" to say pensioners might have to pay for once-free services as a result of the review.

"The changes that have been discussed are about ensuring value for money for the taxpayers who fund the scheme and to ensure the ongoing sustainability of the transport concession.

"The Gold card entitlements that superannuitants receive will not change," he said in his letter.

The ministry's letter to the regional council, which detailed a series of "decisions" from the review, was "preliminary notice of likely changes".

He did not respond when asked when he would take those changes to the Cabinet for approval.

Otago Regional Council corporate services manager Wayne Scott welcomed the assurances and said the council would lobby for operators left out of pocket.

He confirmed the SuperGold contracts were add-ons to the routes already contracted to the operators so, if a contracted company pulled out of the SuperGold scheme, another bus company could not step in and run the SuperGold service on the same route.

The contracts did not allow for top-ups, but there was nothing to stop operators proposing them when the contracts were renegotiated, which would happen when the ministry's decisions were implemented.

Mr Scott said the council's original support for the scheme was predicated on it not affecting rates.

Ministry plans to stop reimbursing administration costs would leave the council with a $30,000 bill.

Mr Collins was unavailable, but Mr Baas said DPT would still assess the impact of what could be a five-figure revenue loss.

"If the Government has that assistance, we would expect compensation to adequately cover what the contract has in place so, if we lose 10%, we would want that put back," Mr Baas said.

GreyPower Otago president Jo Miller accepted Mr Joyce's assurance, but warned the region's elderly would not accept any reduction in the SuperGold service.

stu.oldham@odt.co.nz