The cost of ‘free’ buses
Mr J. K. Thiele, a Christchurch real estate agent, has defended his proposal for free travel on Christchurch buses against an estimate from the chairman of the Christchurch Transport Board (Mr M. O. Holdsworth) that a “free” service would cost more than $7O a year per household in rates.
Mr Thiele writes; “I thank Mr Holdsworth for his reply to my recent article. I must challenge his figures. My average rate of $4O was based on average Government valuation of residential property over the whole area served by the Christchurch Transport Board. “However, let us consider a figure of $77 per ratepaver. From the latest published Transport Board report of 1976, the cash contribution per trip per passenger was 14.588 cents. For an average family of five, regularly using the buses, a trip to work and a trip home would cost $1.45 a day, $7.25 a week, $362.50 a year. I guess this family and hundreds of others would be happy to pay $77 a year as a Transport Board rate and travel more quickly and efficiently to the city without further payment.
“Mr. Holdsworth is not specific as to how a fareless system would necessitate an extra $4.75M in rates. 1 agree that S3M would be required to off-set the loss of cash revenue. Therefore Mr Holdsworth must estimate that a 20 per cent increase in patronage would cost $1.75M. If that is so. what logic can there be in the present advertising exercise which is designed to achieve just that. Based on the present fare structure, a 20 per cent increase would produce only $600,000 so the ratepayer is going to have to provide $1.15M anyway.” In a reply to Mr Thiele’s latest statement, Mr Holdsworth says: “The current average "Transport Board rate per household is estimated at $2538, which in total brings in $2.305M. Allowing SI.IM — or a 20 per cent increase in operating expenses — the total estimate of running the service will be $7 .IM.
“Assuming that the board will still earn $500,000 in other revenue (such as advertising revenue and rents), the cost of a free service will be $6.58M, representing an extra $4.275M. or a total of 872 in rates per household. •If Mr Thiele still doubts
these figures, he is invited to check them with the general manager,” said Mr Holdsworth.
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Press, 27 August 1977, Page 14
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393The cost of ‘free’ buses Press, 27 August 1977, Page 14
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