Thousands more Queenslanders will use trains, buses, ferries and trams after Premier Steven Miles said public transport fares will stay capped at 50 cents, but the public will have to foot a bigger transport bill, experts say.

Both sides of Queensland’s Parliament back a permanent extension of the ultra-low fares as Miles adopts a range of social spending policies before the state’s election on October 26.

Experts said the policy should drive higher use of public transport, which has an economic dividend from creating additional travel.

But there are significant costs for taxpayers, including for people that either don’t use or cannot access the public network regularly.

University of Sydney’s Professor David Levinson said fares already came “nowhere close” to covering operating and capital costs in Brisbane – and most Australian cities – with the bill to rise more under a cap.

And while thousands will benefit, the majority of taxpayers who don’t use public transport – either by choice or access – may not.

“Some of them might benefit if congestion drops a little bit, but most receive no direct benefit,” Levinson said.

“This doesn’t mean it is a bad policy, but it certainly doesn’t guarantee it is a good one.”

Value for money?

The 50-cent fares have been a plank of Labor’s strategy to win a fourth term at Queensland’s election, alongside pledges to cap petrol prices and build publicly-owned service stations.

But Miles has pointed to an underlying rationale, claiming economic benefits for households outweigh costs to taxpayers, and that higher public transport patronage will help lower emissions.

“It saves Queenslanders more than it costs the government because of all those extra people using public transport,“ Miles said.

Under a five-week trial of 50-cent fares, commuters saved about $37 million and took about 2.6 million more trips than the same period in 2023, according to government data.

The costs have been estimated at $150 million over six months, but will ultimately vary significantly over time depending on how many more people start using public transport.

Levinson said where vehicles were not full, the benefits of fare caps were greater because there was less cost involved in taking additional passengers.

But as vehicles filled up, more people could “slow down the trip” and increase costs to the network.

“This solves a problem for people well served by existing networks who were sensitive to the price,” Levinson said.

The caps aren’t a solution for everyone who’s struggling to realise the economic benefits of public transport though.

“Many people live in places that aren’t as well served, and price is not the dominant reason they don’t use PT, but instead it is travel time,” Levinson said.

“This policy alone [isn’t expected to] substitute for additional investments that add accessibility to new destinations for more people.”

Miles thinks subsidies will actually lead to higher investment in the network more broadly, because it becomes possible to add services when more people are using public transport regularly.

But Swinburne University’s Professor Hussein Dia said government claims about value for money in capping public transport fares warranted scrutiny.

He said it was unclear how many of the additional trips replaced existing car trips, or were travel that wouldn’t happen otherwise.

Dia also said that because the subsidies weren’t targeted at low-income families, those travellers who could easily afford higher fares benefited, while still imposing an additional cost on taxpayers.

“Although this is a great policy on many levels, it does not directly target those on low incomes,” he said.

“It can be argued that the same subsidies could have been spent in a more effective way directly in support of low-income families.”

Other states’ strategies

Queensland isn’t the only state or territory using public subsidies to boost public transport use, particularly after a big drop in demand nationwide since the Covid pandemic.

Queensland’s approach is in some senses reflective of its budget position, with a multibillion-dollar surplus in its accounts compared to NSW and Victoria, which face financial pressures.

But Canberra is trialling completely free fares, while Victoria last year introduced a cap on regional fares and NSW has long-standing caps based on daily and weekly use.

Most states also have concession fares that are essentially means-tested price caps designed to lower barriers to transport without requiring taxpayers to subsidise those who can afford it.