The soaring costs of the SuperGold Card
March 2nd, 2012 at 9:47 am by David FarrarAmelia Romanos at NZ Herald reports:
SuperGold Card travel costs are soaring as more people pick up the free scheme, and the Ministry of Transport says there is now a $4 million funding shortfall.
The card, which is available to pensioners and veterans, entitles users to a range of Government concessions, including free public transport during off-peak periods – 9am-3pm on weekdays.
This is not surprising. Anything that has a 100% subsidy tends to have costs get out of control, because there is absolutely no incentive for the beneficiaries of the subsidy to not use it as much as possible.
While personally I don’t think there should be a subsidy at all, if they have to have one it should be say 80% only, so that there is some disincentive for usage to increase to such a level that costs blow out.
Tags: Super Goldcard
March 2nd, 2012 at 10:03 am
As long as it keeps all pensioners out of poverty it must be a good thing.
Does it include special bus services to take pensioners to polling booths?
[DPF: But why subsidise transport? Why not power prices, or food, or rent, or clothing. The transport subsidy is irrational populism.
If there is a problem with pension poverty then the answer is to lift the pension. But as it happens we have almost the least pensioner poverty in the world as we have the most generous public super scheme in the world]
Vote:March 2nd, 2012 at 10:05 am
I’d rather those oldies be on a bus than behind the wheel of a car driving 45km/h.
Vote:March 2nd, 2012 at 10:20 am
A bit like 100% interest free student loans.
Vote:March 2nd, 2012 at 10:26 am
One of the issues I have is that for some strange reason in Auckland (but not elsewhere) the SGC card subsidy on public transport applies just from 9am to 3pm, but on all services after 9am. I don’t have any problem with cardholders having free public transport at off-peak when services will be running half empty anyway, but can’t see why that should happen during the 3pm – 6pm peak when paying passengers are having to stand on buses and trains and are discouraged by the crowded conditions on public transport during those hours from using it.
Vote:March 2nd, 2012 at 10:27 am
And 100% free student loans and 100% free DPB cost us how much.
Fix that and those that pay all these bills will be happy to pay for their Gold Card Privileges.
Vote:They after all are the people who do need assistance when you can longer walk up the road or drive a car.
March 2nd, 2012 at 10:31 am
If a bus is scheduled to take an off-peak trip through town anyway, and 5 oldies get on it for free…
…then have their Super Gold Cards really cost anyone anything?
(I mean you could add up the yearly cost of all the toilet paper that gets provided in WCC public loos, ad that’s probably something horrendous too, but does that mean you propose getting rid of the service?)
[DPF: Yes the bus operator gets to bill the Govt for the rides. It is a make cash scheme for transport operators]
Vote:March 2nd, 2012 at 10:33 am
@toad 10:26 am
Oops, meant to say “…for some strange reason in Auckland (but not elsewhere) the SGC card subsidy on public transport applies not just from 9am to 3pm…”
Vote:March 2nd, 2012 at 10:34 am
I don’t buy the calculation. Where I live there is a public transport link which is subsidised as per normal systems (whether this should be the case or not is not the point of the present discussion). Since the Gold Card was introduced, patronage has increased but there has been no new service nor new staffing levels. The additional cost of the Gold Card patronage is marginal, if anything. If anything, it would increase operator non-subsidised revenue as on this service (ferry), one can buy snacks, coffee, wine and beer. The Gold Card patrons are sometimes buying these items when they use the service, hence the additional revenue. But next to no additional diesel or whatever fuel drives these ferries would be required, no additional service and no additional staff. There should be a case that the “regular” subsidy is reduced owing to the Gold Card patronage. I suspect that we are talking of different Government pockets here, rather than a significant increase in overall subsidy. It could be that the operator is smarter than the various government agencies, hence its profit is up, but this is a reason to increase government competence (if possible, in an ideal world, etc etc) not to withdraw one element of what should be the same level of overall subsidy, whether this is coming from the Gold Card or the “regular” subsidy provider.
Vote:March 2nd, 2012 at 10:37 am
RRM you would be right if the bus company was providing the “free” fare but they don’t. The Bus Company charges the fare to the gummint which then puts its hand in your pocket to pay for it (and the supporting buraeucracy which surrounds it). It is a nice earner for the bus company and it is a true cost to the taxpayer.
Vote:March 2nd, 2012 at 10:41 am
I have been told that fare paying passengers on the Airport Flyer in Wellington are sometimes left behind as the service is full with mainly SGC concession patrons. This seems wrong, and some way should be worked out so that it doesn’t happen.
Also, why should the operators be compensated for a full fare at off peak hours? These are extra passengers who may not normally be traveling. Maybe we can make the system more affordable by having the taxpayer only paying say, 50% of the normal fare. Lets face it, these extra passengers’ costs are only related to the operator’s marginal costs, and even half the fare is still a profit as the service will be running anyway.
Vote:March 2nd, 2012 at 10:42 am
The worst abuse of the system is the Waiheke ferry.
Vote:Not only is it expensive I know there is wide spread ‘lending out’ the card to those not entitled.
I would support stricter enforcement especially on this service and at least some part payment on the ferry.
March 2nd, 2012 at 10:58 am
One of the issues I have is that for some strange reason in Auckland (but not elsewhere) the SGC card subsidy on public transport applies just from 9am to 3pm, but on all services after 9am. I don’t have any problem with cardholders having free public transport at off-peak when services will be running half empty anyway, but can’t see why that should happen during the 3pm – 6pm peak when paying passengers are having to stand on buses and trains and are discouraged by the crowded conditions on public transport during those hours from using it.
So those paying for the service should get more rights than those that do not? We’ll make a capitalist out of you yet Toad.
Vote:March 2nd, 2012 at 11:05 am
Halve the amount to public transport operating between 9 am and 3 pm.
Vote:March 2nd, 2012 at 11:07 am
As JeffW points out, the marginal cost of providing this service to SuperGold card holders is small, or even zero. There are no additional services provided to cater for GoldCard users, it is existing capacity being used. The problem is with the contracting system for public transport services. Effectively bus, ferry and train operators push a button on the ticketing console and they get a dollar amount from the Government every time they do it. (There is nothing to stop operators pushing the button as many times as they like, BTW).
The contracting model needs to change to the “gross contract” model so that ticket revenue does not go direct to the operators if a service is subsidised. Subsidised transport services should be tendered on a cost basis regardless of patronage, and all revenue goes to the local and central funding agencies that subsidise the service. That way there would be better clarity on what actual subsidy levels are for each service as well.
[DPF: I agree]
Vote:March 2nd, 2012 at 11:52 am
Don’t mess with pensioners, Winston Peters warns:
But wait, there’s more.
Vote:March 2nd, 2012 at 11:54 am
And Winnie at last has his crusade. Watch out for much posturing, foaming at the mouth, impassioned pleas for pensioners.
It was a stupid election bribe. We don’t even know where the Gold Card is.
I’d much rather the money went to kids – or we pay at least half.
Or campit’s idea – give all the operators a lump sum for the whole year to cover all the oldies, whatever the number. If they don’t want the taxpayer money, they can try to charge dear old grandma. Or leave the seat empty.
Vote:March 2nd, 2012 at 12:14 pm
The cost of another populist, ill-conceived, senseless, blanket policy; on par with interest-free student loans and Working For Families (aka communism by stealth in the infamous words of Smile & Wave).
Woe betide the courageous government that does away with these aberrations. No, not the Labour lite one.
Vote:March 2nd, 2012 at 12:27 pm
Time for you all to stop whinging. After all as a rare person known as a rate payer I pay 80% of the cost of any ride on any bus in the BOP area courtesy of Ebop and the local councils.
Apparently that’s all ok with most of you and the plebes out there.
Of course its not, but being a ratepayer with only one vote on how our rates are spent versus many others who don’t pay rates and still get to vote only I care.
[DPF: Yes the bus operator gets to bill the Govt for the rides. It is a make cash scheme for transport operators]
Vote:Well we could at least be comforted by the fact that mostly the money goes to a private enterprise and not some suck hole Govt. Dept or their hangers on like free student loans or DPB.
And if the Nats had any nuts they could change the lot but haven’t.
So why blame the operators for taking advantage of the Law the Parliament made and supports.
March 2nd, 2012 at 12:48 pm
Not all old f..ts use their gold card concession.
Vote:None of our friends do, and have never done so either.
Happy to see it extinguished, same way as we did Winston.
March 2nd, 2012 at 12:53 pm
Masterton train rort. Masterton train leaves Wellington a bit before 6pm, so oldies pay fare to Petone, catch local train and catch Masterton train there.
Vote:March 2nd, 2012 at 1:01 pm
I cannot think of any grounds of efficiency or fairness in which subsidising public transport for seniors is a good idea. Yes, it helps them, but if you really think they deserve more help, surely a further increase in superannuation would do them more good for the same cost. I can understand the political motivation though – a lolly scramble of lots of small things looks “better” than a simple large transfer payment.
In fact, seniors are probably just about the worst group to subsidise on efficiency grounds. Younger people who need to go to school or work who use the bus are probably substituting from driving a car, whereas older, retired people are probably making a lot of trips they otherwise wouldn’t have made at all. Also, old people are more likely to slow down buses when getting on and off (as un-PC as it is to say it), imposing costs on other riders.
Vote:March 2nd, 2012 at 1:33 pm
How is the cost defined, is it the cost of additional services or some illusionary opportunity cost, I mean if the services are underutilised and the seniors are fulling up existing services what is the real cost, if they are additional services then yes DPF has a valid point in terms of a 80/90% subsidy.
Personally I think it’s a great idea, the cost savings to have healthier elderly people is very real, not to mention the economic benefits of elderly people moving around and spending money on services.
Vote:March 2nd, 2012 at 2:06 pm
It beggars belief why the Waiheke Island ferries are considered to be part of the Auckland suburban transport network and hence are eligible for subsidies. Great Barrier Island is in the Auckland Council area and yet its ferry services are neither subsidised nor available on the Gold Card.
Similar argument with the Masterton – Wellington train – Ashburton people cannot use Gold Card to get to Christchurch, so why Masterton?
Vote:March 2nd, 2012 at 2:37 pm
Nichlemn, I agree, it doesn’t make much sense nor does it seem fair – including to pensioners who can’t benefit from it.
Vote:March 2nd, 2012 at 3:10 pm
Only place in Hastings I have found where I can use mine is at the Mad Butchers. Apparently Spotlight accepts it which is a bit ridiculous unless it is a Spotlight initiative
Vote:March 2nd, 2012 at 6:16 pm
As a Supergold Card holder I think concessional travel to fill surplus capacity is sensible, but free travel is an absolute nonsense.
Lets kill it – but on condition that we simultaneously kill the similarly nonsensical travel subsidies for former politicians.
Vote:March 2nd, 2012 at 6:32 pm
Overall it is a shocking misuse of our resources. The oldies in New Zealand already have a gold-plated pension (free of means testing) and access to excellent health facilities. We tend to hear grumbling from Grey Power, NZ First etc, but I’ve not seen anything to suggest that pensioners in New Zealand are suffering in any material way.
Vote:March 2nd, 2012 at 7:05 pm
@ marcw (31)
I have been told that fare paying passengers on the Airport Flyer in Wellington are sometimes left behind as the service is full with mainly SGC concession patrons.
It runs every 15 minutes: are there really that many oldies using it?!
$4million shortfall means it clearly needs a re-think, But my older relatives love the idea of free transport, on the basis that: “We paid taxes all our working lives, now it’s time to get to get something back for it.”
Vote:March 2nd, 2012 at 7:09 pm
“We paid taxes all our working lives, now it’s time to get to get something back for it.”
Vote:I’ve never actually hear anyone make that absurd claim, but I guess it’s possible that such a deluded belief might be espoused.
March 2nd, 2012 at 7:52 pm
I think if you’ve worked hard for 40+ years while others live off benefits without having ever contributed anything, it’s fairly natural to think you are due something back in later life.
Vote:Someone offers you free travel, you really going to say: “Oh no, I couldn’t possibly. Please let me pay for it”?
March 2nd, 2012 at 8:32 pm
It was a stupid election bribe.
On the contrary it was a very astute move by Peters when he introduced it as proven for example by the fact it got him re-elected this last election.
Every single time a pensioner uses it they’re reminded of Peters. Every single time. More than a few pensioners pay attention to that and you know why?
Because by the time most people get to the end of their working lives and have paid taxes all their lives, which most of them have, they strangely think they’re entitled to some of those taxes back and that feeling is reinforced by the fact that most of them are financially helpless in that, most of them don’t have much room to maneuver because they can’t, they simply can’t, work anymore and every little bit therefore counts toward THEIR HUMAN DIGNITY.
This will be exacerbated as the baby boomers come on, as a political force and it’s exceedingly powerful because just like Hulun’s interest free loans, which got the parents and grandparents as well as the children, this also gets the children, as well as the parents.
This is what one is up against, in terms of political forces re: this.
Edit: Mary Rose: snap.
Vote:March 2nd, 2012 at 9:17 pm
Theres a lazy prick who lives near me who catches it with his card 1 stop – about 100-200m to save him walking to the dairy, otherwise he seems to move pretty well – i presume he buys his paper and returns home – I have seen him do it a number of times, no idea the cost of it but thats the sort of piss taking that ruins it for others.
Vote:March 2nd, 2012 at 9:58 pm
Gen X are paying for this, not the baby boomers and prewar generation. And it’s nothing new. When the baby boomers and pre war kids paid $2 in taxes they got $3 in spending – like for things like free uni education and universal student allowances, subsidised employment in the government sector, and universal national super. If you are born in the 60s and 70s you have had to repay $100b of govt debt the previous generation ran up so for every $5 you’ve paid in taxes you’ve got $4 of spending by the Government. Feeling a little ripped off by the oldies?
My understanding is that the two biggest costs in terms of services are the Waiheke Ferry and Wairarapa Train – pensioners on day trips to the wineries. However, I think the solution is simple – cap the free fares at $10. Any fare over that has to be full price. But exempt people with their permanent residential address on Waiheke and in the Wairarapa (and maybe a couple of other places where specialist medical services aren’t available locally and there is a public transport option to the nearest city).
Vote:March 5th, 2013 at 6:50 pm
Why not think of it as a government subsidy on public transport. Perhaps many services would be cut without the senior citizens travelling free, for the transport companies do receive those fares from the government – fares they probably would not otherwise receive.
Vote:March 5th, 2013 at 10:21 pm
One thing is sure, each of you will eventually turn 65 (or whatever the retirement age will be for you), or you will die first. You will have a completely different outlook on life and you will hate the fact that young people have a the false idea that their quality of life is less desirable because your generation robbed them of happiness and opportunity. You will hate the fact that young people think your generation had it easy and that any benefit you may receive from the government makes you a free-loader. You will hate the fact that there is only a small window of time left in which you can enjoy your new found freedom from work, before age related health issues stop you in your tracks. It will happen, unless you die first.
Vote:March 5th, 2013 at 10:51 pm
Amelia Romanos should remember we are talking about a subsidy in millions rather than the billions it costs the taxpayer to support those who think of ‘the benefit’ as a career choice. Of course, it’s always easier to choose a vulnerable target than to challenge something you may not have the courage to follow through on.
Vote:http://www.treasury.govt.nz/government/expenditure
March 5th, 2013 at 11:26 pm
….and what a pathetic bunch of nit pickers you are, wanting to deny elderly people the means of travelling by bus, boat or train. And to the super gold card holders here who say it is not necessary and none of their sgc holding friends use this benefit – well bully for you, have you any idea how hard it is for some folk to live on the pension? No, because you live in the rarified air of those for whom money is no object. I do have a super gold card sincle last year and I have not needed to use it because I can still drive. I know many elderly people who cannot drive and cannot afford to travel to places like Waiheke Island. Now they go in groups, have a wonderful (short) day out and return home before 3pm (yes Toad, that rule does apply in Auckland) feeling uplifted and dare I say it, young again! These people (and quit calling them “oldies”) are valuable members of society. Some of you should be reported to the human rights commission for victimisation of the elderly. Try making the best of life, it will be over soon enough for you all.
Vote:March 5th, 2013 at 11:37 pm
Finally, this excerpt from The Human Rights Commission on age discrimination:
“Age discrimination is widespread in our community. It mainly affects older people and it permeates many aspects of life. Like other forms of illegal discrimination, it damages individuals, it demeans our society, and it violates human rights. How does it occur? A lot of age discrimination comes from negative stereotypes of ageing. Our society tolerates a range of negative stereotypes about older people, for example all older people are mentally and physically weak, stubborn, out of date, unable to learn, seriously unhealthy, in all, a burden to society. When a society accepts these images, it is not surprising that older people are treated worse just because of their age, in employment, in financial and other important services, in having their views and choices respected. In other words they are subjected to age discrimination. Not only are they denied fair treatment, but this negative stereotyping actually damages their health.”
Now stop being cowards and ‘pick on someone your own size’
Vote: