The Andrews government is considering how it can ease household expenses after petrol surged to $2.20 per litre, as the Victorian Greens push for public transport to be free for a month to ease the cost of living.
New Zealand has already halved the cost of travelling on public transport and cut the fuel excise after the war in Ukraine sent the price of petrol up. Prime Minister Scott Morrison has not ruled out reducing the excise in next week’s budget but said he would not support “knee-jerk reactions”.
The price of petrol is continuing to rise.Credit:Flavio Brancaleone
The Victorian Greens will this week push the Andrews government to make public transport free in the state for an initial one-month period, which would be regularly reviewed depending on prices at the bowser.
“There’s still a lot of uncertainty about how long these high petrol prices are going to go for,” said Sam Hibbins, the party’s transport spokesman. “Victorians across the state are struggling with the cost of living.”
Mr Hibbins estimated that free public transport would cost the government $75 million a month.
Public Transport Users Association spokesman Daniel Bowen said the people most affected by high petrol prices lived in suburbs with poor public transport services and would not be helped by the Greens proposal.
Greens MP Sam Hibbins.Credit:Justin McManus
“It’s not going to help people with a service they can’t practically use.”
Mr Bowen’s stance was echoed by independent economist Saul Eslake, who told the National Growth Areas Alliance congress on Monday that people living on the fringes of cities were disproportionately squeezed by the rising cost-of-living.
“A lack of local employment opportunities means its residents are forced to commute into the CBDs,” Mr Eslake said.
In response, Mr Hibbins said: “I think in this instance, even if it can reduce someone’s need to use their car, even if it doesn’t eliminate it fully, that will still have benefits.”
The Greens – hoping the government will seize the opportunity to push people away from car dependency – also want a $5000 rebate for people who get rid of their old petrol cars and instead use public transport, an electric vehicle or e-bike, as part of a longer-term plan.
Transport Infrastructure Minister Jacinta Allan would not be drawn on the measures being considered by the government.
“We’re looking at these issues very closely,” Ms Allan said.
A Victorian government spokesman said household budgets had been kept afloat through government support over the past two years. “We will continue to examine what further support we can provide,” he said.
To offset the cost of travel in Victoria and revive the struggling tourism and entertainment sectors, the government’s travel voucher scheme will reopen to applications online from 2pm on Wednesday.
There will be 140,000 rebates of $200 available on a first come, first served basis for people who stay at least two nights in paid accommodation and spend $400 on the trip between April 8 and May 27.
Public transport fares were frozen in Victoria in 2021 because of the pandemic, and increases were below inflation this year – rising 2.3 per cent for the city and 1.1 per cent in the regions. The government also temporarily reduced fares at off-peak travel times to minimise crowds earlier in the pandemic.
Dr Jonathan Spear, chief executive of independent advisers Infrastructure Victoria, said there was room to cut the ticket-price of fares for some underused public transport services.
But he said making all travel free would mostly benefit high earners, who made up the largest group of public transport users during peak periods before the pandemic. People on low incomes were more likely to use the underused bus network and travel at off-peak times.
“Infrastructure Victoria does not consider free travel either fair or efficient,” Dr Spear said.
Mr Morrison has signalled next Tuesday’s budget will include measures to ease the cost of living, but said cutting the fuel excise would not return petrol prices to their usual retail price anyway. The excise, a 44 cent tax on every litre of petrol or diesel, will raise $19.2 billion in revenue this financial year to help build infrastructure.
On Monday, The Age revealed Melbourne’s public transport network experienced its sharpest increase in activity since 2020 on Thursday last week. Usage hovered at 63 per cent of the pre-COVID baseline, a 9 per cent rise from the same time the week prior.
Ms Allan believes that was mostly driven by people returning to their offices in the CBD in greater numbers, rather than petrol prices.
Public health experts say public transport for commuters was low-risk at this point of the pandemic, with high-vaccination rates, particularly as face masks are still mandated on the network.
With Noel Towell
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