# Transportation Planning Casebook/IPART Fare Setting in New South Wales

The Independent Pricing and Regulatory Tribunal or IPART is an independent decision-making body established in 1992 tasked with regulating certain markets as well as government services to ensure effective social, environmental and economic outcomes. Despite being a government agency, the tribunal operates independently in making decisions and recommendations to protect consumers from unreasonable price hikes and unfair competition. It also improves the quality and efficiency of service providers, encourages competition, protects the environment and ensures service providers stay financially viable.
IPART regulates prices and reviews pricing policies of the New South Wales (NSW) government supplied services. IPART also provide assistance to other entities within the NSW government such as in conducting special reviews in pricing, industry, or competition. It also serves as an arbiter in access disputes and protects registers of the subsequent access agreements. Apart from transport, IPART also provides advisory services and regulation compliance monitoring of regulated entities according to their license or authorization conditions in the water, gas, electricity, and transport industries.

## Summary

The public transportation fare in New South Wales is highly dependent on the maximum fare price determination undertaken by the IPART. Although a government entity in itself, it functions independently to calculate the maximum fare price that serve primarily as the basis of Transport for New South Wales (TfNSW) for the issuance of fare orders in the state. IPART is composed of three members appointed by the Premier of NSW. These members are expected to have substantial experience in business, economics, finance, engineering, or any relevant field to equip them in undertaking the regulatory tasks of IPART.
Since 2014, when it was mandated to undertake maximum fare price determination under the Passenger Transport Act 2014 No 46 (Part 2, Division 2), IPART has become an integral part in the development of the fare system of NSW public transportation. The fare increase proposals of TfNSW have consistently complied with the IPART maximum fare prices as both government entities ensure the sustainability of the business case of NSW's public transportation. IPART has witnessed the gradual shift from paper tickets to its phase out when the Opal cards were in the early stage of their roll out. The Opal card payment methods complemented by contactless credit card payments simplified further the payment structures of fares with the continuous decline in the demand for single journey tickets.
IPART uses several parameters in determining the maximum fare prices. These include indexation to inflation, cost recovery, demand management, social and policy objectives, intermodality, and incentive systems. Among the recent policy issues include the proposal of a fare-free pubic transportation and the upcoming maximum fare price determination that will set maximum fare prices from 2024 until 2028.

## Annotated List of Actors

The IPART’s organizational structure is outlined in the state legislation of New South Wales entitled the Independent Pricing and Regulatory Tribunal Act 1992 No. 39. The tribunal is composed of three members appointed by the premier of as permanent members. Temporary members may be added as appointed also by the premier. The tribunal is led by a chairperson to be appointed from among the permanent members. It is the responsibility of the premier to ensure that members of the tribunal have a knowledge and understanding of economics, consumer interests, and supplier interests.

### Actors

In the specific concern of fare setting, IPART is tasked to conduct reviews and reporting to the premier as mandated under the Passenger Transport Act 2014. Among the key actors on the IPART, specifically on fare setting are as follows:
Actors in IPART's Fare Setting in New South Wales :
| Sector | Actor | Description / Function / Role | Legal Basis |
| Government | Premier of NSW | Appoints IPART's Permanent and Temporary Members of the Tribunal | IPART Act 1992 No 39 |
| Government | Minister of Transport | The ministers refer services provided by public passenger services to IPART for the determination and recommendation on appropriate maximum fares for services and appropriate maximum fares for specified fares or classes of fares for the services. | Passenger Transport Act 2014 No 46 |
| Government | Minister of Roads | The ministers refer services provided by public passenger services to IPART for the determination and recommendation on appropriate maximum fares for services and appropriate maximum fares for specified fares or classes of fares for the services. | Passenger Transport Act 2014 No 46 |
| Government | Minister of Regional Transport and Roads | The ministers refer services provided by public passenger services to IPART for the determination and recommendation on appropriate maximum fares for services and appropriate maximum fares for specified fares or classes of fares for the services. | Passenger Transport Act 2014 No 46 |
| Government | Transport for New South Wales (TfNSW) | It is the road and transport agency of New South Wales. The agency reports to the Minister of Transport, Minister of Roads, and Minister of Regional Transport and Roads. They determine the maximum fares for the services and issues subsequent fares order. The maximum fare determined must not exceed the value recommended by IPART. | Passenger Transport Act 2014 No 46 (Part 7, Division 2) |
| Independent Government Entity | IPART Permanent and Temporary Members | Perform functions conferred and imposed under the IPART Act of 1992 particularly on price determinations on maximum fares | IPART Act 1992 No 39 |
| Independent Government Entity | IPART Permanent and Temporary Members | Request the minister concerned to refer matters relating to public passenger services | Passenger Transport Act 2014 No 46 (Part 7, Division 2) |
| Independent Government Entity | IPART Secretariat | Consists of economists, financial analysts, lawyers, engineers, and other professionals which advise the tribunal | |
| Independent Government Entity | IPART Executive Team | Enable the tribunal to perform its functions by providing administrative and management support services | Passenger Transport Act 2014 No 46 (Part 7, Division 2) |
| Private | Frontier Economics$^1$ | Engaged by IPART to provide quality assurance check specifically on the TfNSW 2016-2017, 2017-2018, 2018-2019, and 2019-2020 pricing proposals | |
| Private | Operators | Operate a public passenger service with proper accreditation and comply with the fare rates regulated by TfNSW through their fares order. | Passenger Transport Act 2014 No 46 (Part 2, Division 2) |
| Private | Commuters | Benefits from the public transportation fares issued by TfNSW in its fares order. | |
| Interest Groups | Sector Organizations | Participate in the public hearing as resource persons or representatives of specific groups to provide inputs on fare price determination. In 2020, the following groups were actively involved in the public hearing for the 2020-2024 Fare Price: National Council of Social Service Launchpad Youth Community Community Resource Network Youth Justice Action for Public Transport (NSW) | |
| Interest Groups | Political Parties | Influence the direction of fare prices in a political standpoint, i.e. the election promise of reducing the weekly cap in 2019 | |
$^1$ Not a permanent actor and is dependent on the engagement with IPART.

### Current Members of the Tribunal

The tribunal is currently being led by Carmel Donnelly PSM, whose term started on 1 July 2023 and will end on 30 June 2026.
Members of the Tribunal (as of April 2024) :
| Designation | Name | Experience |
| Chairperson | Carmel Donnelly PSM | 35 years of public sector experience and once held Chief Executive of the State Insurance Regulatory Agency (SIRA) |
| Deputy | Mike Smart | Chief Economist of IPART since 2015 and prior consulting economist in the private practice for 15 years |
| Member | Jonathan Coppel | 30 years of applied economics experience including 10 years being Commissioner at the Australian Productivity Commission and international roles at the Organization for Economic Cooperation and Development (OECD) and International Energy Agency (IEA) |

## Timeline of Events
### Establishment of IPART and its Fare Setting Role

| Year | Milestone / Event |
| 1992 | Government Pricing Tribunal Act 1992 The predecessor version state law of the present-day Independent Pricing and Regulatory Tribunal Act 1992 was signed. |
| 1995 | Amendment of the Government Pricing Tribunal Act 1995 The Government Pricing Tribunal was officially renamed as the Independent Pricing and Regulatory Tribunal (IPART). The state law is renamed as the Independent Pricing and Regulatory Tribunal Act 1992. |
| 2014 | Passenger Transport Act 2014 Through the Part 7, Division 2 of this Act, the minister concerned may refer to the IPART for the determination and recommendation on appropriate maximum fares for services and appropriate maximum fares for specified fares or classes of fares for the services. |

### Fare Price Change and Other Significant Events Chronology

| Year | Fare Type | Event / Price Change Details | Impact |
| 2012 | Opal Fares | Opal rolled out for ferry services | Opal smartcard's first trial will start on the Neutral Bay loop |
| 2013 | Opal Fares | Opal rolled out for train services | Opal expansion into train services beginning with City Circle and at stations out to Bondi Junction as part of a customer trial |
| 2013 | Opal Fares | Opal rolled out for bus services | In the same year of the rollout for train services, the bus services began accepting Opal payments with the 594/594H route operated by Transdev NSW, between Hornsby, North Turramurra and Town Hall. |
| 2014 | Opal Fares | 14 paper-based tickets were retired and subsequent replacement with Opal cards | It was reported that over 440,000 Opal cards are now in circulation. |
| 2014 | Opal Fares | Opal rolled out for light rail services | Towards the end of 2014, light rail services entered the Opal network available on the line, which runs from Central to Dulwich Hill. The deployment was earlier as it was expected to commence in the first quarter of 2015. |
| 2014 | Sydney Trains | 3.3 percent average increase | Within maximum allowed determination and is permitted to increase in 2015 by 0.3 percent on top of the annual increase of 1.3 percent above inflation |
| 2014 | NSW TrainLink Intercity | 3.3 percent average increase | Within maximum allowed determination and is permitted to increase in 2015 by 0.3 percent on top of the annual increase of 1.3 percent above inflation |
| 2014 | Sydney Ferries | 2.9 percent average increase | Within maximum allowed determination and is permitted to increase in 2015 by 3.1 percent on top of the annual increase of 2.4 percent above inflation |
| 2014 | Metropolitan Buses | 2.4 percent average increase | Within maximum allowed determination and is permitted to increase in 2015 by 0.1 percent on top of the annual increase of 0.5 percent above inflation |
| 2014 | Newcastle Buses | 1.6 percent average increase | Within maximum allowed determination and is permitted to increase in 2015 by 1.0 percent on top of the annual increase of 0.5 percent above inflation |
| 2015 | Sydney Trains | 3.6 percent average increase (Opal fare by 2.5% and single tickets by AUD 0.20) | Rail fare determination is due to be replaced in 2016. No catch-up factor for 2015 was established. The catch-up factor is the difference between allowed fare revenue and the proposed fare revenue. The TfNSW is allowed to increase fares in future determination years to recover these amounts. |
| 2015 | NSW TrainLink Intercity | 3.6 percent average increase (Opal fare by 2.5% and single tickets by AUD 0.20) | Rail fare determination is due to be replaced in 2016. No catch-up factor for 2015 was established. The catch-up factor is the difference between allowed fare revenue and the proposed fare revenue. The TfNSW is allowed to increase fares in future determination years to recover these amounts. |
| 2015 | Sydney Ferries | 3.4 percent average increase (Opal fare by 2.5% and single tickets by AUD 0.20) | Within maximum allowed determination and is permitted to increase in 2016 by 4.8 percent on top of the annual increase of 2.4 percent above inflation |
| 2015 | Metropolitan Buses | 2.2 percent average increase (No changes in Opal fare but single tickets and TravelTen tickets increase by AUD 0.10 and AUD 0.80, respectively) | Within maximum allowed determination and is permitted to increase in 2016 by 0.3 percent on top of the annual increase of 0.5 percent above inflation |
| 2015 | Newcastle Buses | 1.5 percent average increase (No changes in Opal fare but 1 hour fares will increase by AUD 0.10) | Within maximum allowed determination and is permitted to increase in 2016 by 0.9 percent on top of the annual increase of 0.5 percent above inflation |
| 2016 | Paper Tickets | No changes in price but paper tickets were to be withdrawn from sale. Effective 1 January 2016, MyBus TravelTen, MyMulti Weekly, MyFerry TravelTen, and Pensioner Excursion Tickets were no longer available. | All affected journeys will be undertaken on Opal fares. People who previously travelled using paper tickets 8 times a week will be paying more while those who traveled more than 8 times a week will pay less on the average. |
| 2016 | Opal Fares | 3.0 percent average increase (from 2015 rates) | Frontier Economics was engaged by IPART and concluded that the pricing proposal of the TfNSW complied with the determinations. Specifically, average adult fare was AUD 2.49 for 2015-2016, and AUD 2.56 for 2016-2017 |
| 2017 | Opal Fares | 2.4 percent average increase and 10 percent average increase for single use ticket fare (from 2015 rates) | Engaged with Frontier Economics, IPART approved the request of TfNSW of increasing the Opal adult fares on the average to AUD 2.55 for 2017-2018. Actual 2016-2017 average adult fare was found to be only AUD 2.49. |
| 2017 | Contactless Card Payments | Contactless credit card payments were rolled out charging the adult fare price | Credit card payments were trialed in July 2017 on the Sydney Ferries F1 Manly Ferry Service with Mastercard. |
| 2018 | Opal Fares | 4.8 percent average increase (from 2015 rates) | Engaged with Frontier Economics, IPART approved the request of TfNSW of increasing the Opal adult fares on the average to AUD 2.61 for 2018-2019. |
| 2018 | Opal Day Pass | To be sold exclusively to companies such as tour operators at (AUD 19.00 without airport station access or AUD 33.30 with airport station access) | The one-day pass is an Opal ticket that is valid for unlimited travel for one day activated from its first tap on and expires at 4am the next day. |
| 2018 | Contactless Card Payments | Expansion of accepted contacless credit cards | Mastercard joins the contactless credit card payments scheme. TfNSW notes that additional payment options have continued to the continued decrease of purchase of single journey tickets. |
| 2019 | Opal Fares | 4.8 percent average increase (from 2015 rates, no proposed changes if 2018 proposed rates are considered) | Engaged with Frontier Economics, IPART approved the request of TfNSW of increasing the Opal adult fares on the average to AUD 2.61 for 2019-2020. Actual 2018-2019 average adult fare was found to be only AUD 2.58. |
| 2019 | Opal Fares | Adult weekly cap reduction to AUD 50.00 from AUD 63.20 | As part of the government's election commitment, the caps were reduced. No changes were made in other Opal benefits such as travel reward and transfer discount. |
| 2020 | Opal Fares | Public Hearing on Opal Fares for 2020-2024 was held | Recommendations of IPART include: Higher single fares such that fare of occasional users would increase at 5.0 percent per year New passes may be introduced such as having 3-4 days a week are discounted compared to a single fare discount Off-peak fares for bus and light rail services (only trains had off-peak rates previously Integrated fare structure to consider origin and destination points regardless of transport modes Lower fare options for healthcare cardholders to reduce barriers to participation in the community |
| 2020 | Opal Fares | Introduction of off-peak fares on bus and light rail services | Fare adjustments generally in response to the COVID-19 pandemic and to encourage social distancing in public transport Peak travel times are as follows: 6:30am - 10:00am on Sydney Trains, Sydney Metro, light rail and bus 6:00am - 10:00am on NSW TrainLink intercity services 3:00pm - 7:00pm on Sydney Trains, NSW TrainLink intercity services, Sydney Metro, light rail and bus |
| 2020 | Opal Fares | Increase in off-peak discount from 30 percent to 50 percent until September 2020 | Fare adjustments generally in response to the COVID-19 pandemic and to encourage social distancing in public transport Peak travel times are as follows: 6:30am - 10:00am on Sydney Trains, Sydney Metro, light rail and bus 6:00am - 10:00am on NSW TrainLink intercity services 3:00pm - 7:00pm on Sydney Trains, NSW TrainLink intercity services, Sydney Metro, light rail and bus |
| 2020 | Opal Fares | Increase fare for peak travel on bus and light rail services from AUD 2.24 to AUD 3.20 (for 0- to 3-km distance) with off-peak discounted fare from AUD 2.24 to AUD 1.60 valid until September 2020 | Fare adjustments generally in response to the COVID-19 pandemic and to encourage social distancing in public transport Peak travel times are as follows: 6:30am - 10:00am on Sydney Trains, Sydney Metro, light rail and bus 6:00am - 10:00am on NSW TrainLink intercity services 3:00pm - 7:00pm on Sydney Trains, NSW TrainLink intercity services, Sydney Metro, light rail and bus |
| 2020 | Opal Fares | Extension of AM and PM peak periods | Fare adjustments generally in response to the COVID-19 pandemic and to encourage social distancing in public transport Peak travel times are as follows: 6:30am - 10:00am on Sydney Trains, Sydney Metro, light rail and bus 6:00am - 10:00am on NSW TrainLink intercity services 3:00pm - 7:00pm on Sydney Trains, NSW TrainLink intercity services, Sydney Metro, light rail and bus |
| 2020 | Opal Fares | Setting of daily cap at AUD 8.05 (half of the previous weekday cap) | Fare adjustments generally in response to the COVID-19 pandemic and to encourage social distancing in public transport Peak travel times are as follows: 6:30am - 10:00am on Sydney Trains, Sydney Metro, light rail and bus 6:00am - 10:00am on NSW TrainLink intercity services 3:00pm - 7:00pm on Sydney Trains, NSW TrainLink intercity services, Sydney Metro, light rail and bus |
| 2021 | Opal Fares | 1.5 percent increase in average fare | No changes on peak travel, daily cap, weekly cap, travel rewards, and transfer discounts. |
| 2021 | Opal Fares | Off-peak discount reverted from 50 percent to 30 percent | No changes on peak travel, daily cap, weekly cap, travel rewards, and transfer discounts. |
| 2022 | Opal Fares | 3.6 percent increase in average fare | No changes on peak travel, daily cap, weekly cap, travel rewards, and transfer discounts. |
| 2023 | Opal Fares | 3.5 percent increase in average fare | Although usually taking effect at the beginning of the financial year, the implementation of the new fare schedules were moved to October 2023 due to inflation experienced in Australia and increased concerns on cost of living. |
| 2023 | Opal Fares | 5.5 percent increase in single journey adult fare | Although usually taking effect at the beginning of the financial year, the implementation of the new fare schedules were moved to October 2023 due to inflation experienced in Australia and increased concerns on cost of living. |
| 2023 | Opal Fares | Removal of weekly travel rewards program | Although usually taking effect at the beginning of the financial year, the implementation of the new fare schedules were moved to October 2023 due to inflation experienced in Australia and increased concerns on cost of living. |
| 2023 | Opal Fares | Reduced daily travel cap on Fridays to AUD 8.90 | Although usually taking effect at the beginning of the financial year, the implementation of the new fare schedules were moved to October 2023 due to inflation experienced in Australia and increased concerns on cost of living. |
| 2024 | Opal Fares | Launch of the review of the maximum Opal fares until 2028 | In 5 September 2023, the Minister of Transport requested officially the IPART to review the maximum Opal fares until 2028. Subsequently, an issues paper was published for public comment and feedback on 18 January 2024. Public hearing is scheduled on June 2024. |

## Maps of Locations

IPART's role in fare setting expands to a wide range of public transport types in New South Wales including buses, trains, light rail, and ferries.
* Selected Maps of NSW Passenger Transport
* Sydney Rail Network
* NSW TrainLink Intercity Network
* Sydney Bus Contract Map
* Outer Sydney Bus Contract Map

## Policy Issues
### Fare-Free Public Transportation

Affordable public transport has been an ongoing debate in NSW to incentivise economic mobility, to reduce car dependence and ease the financial burden on households. In December of 2019, IPART conducted an independent investigation of a free-fare public transportation service in New South Wales as part of the 2020-2024 Maximum Opal Fares plan. The review concludes that implementing free public transport in NSW, by subsidising a 100% of operational costs from taxpayers, will marginally improve the travel costs for families individuals. A loss of $1.6 billion in yearly revenue will not be fed into the economy through other ways.
It also makes its point by comparing free-fare public transportation programs in other parts of the world, mainly Europe. One of the examples is in the Estonia's capital of Tallinn, that launched a free public transportation program. The real goal in its design, found by scholars, is that it was supposed to bring more subsidies by only allowing registered residents of Tallinn to use the system for free. However, it did little to tackle mobility, accessibility or reduction in car traffic. IPART that 2-5% reduction in car ridership does not explain a proposed 40% increase in public transport patronage.
IPART takes these real examples to make an argument that the cost and operational burden outweighs the social impact of free travel. It advises that the cost of travel was already below the inflation adjusted cost for most patrons so a 5.0% annual increase at a 4 year span is proposed. IPART does not force Transport NSW to increase Opal fares, which can be seen by the effects of Covid-19 reducing patronage for all public transportation services in 2020-2021. The rising fares were limited to about 3% a year to make it more affordable.

### Maximum Opal Fares until July 2028
#### Overview of Fare Setting Process

Under the current public transportation system fare structure in NSW, the entire pricing is divided into two sectors: Maximum fare and fare below maximum. Fares below maximum are determined by the NSW Transport Department. The advice on the maximum fare is offered by the IPART to the government. The maximum fare would be discussed and set every four years, with the current fare lasting until June 2024, and the next fare would be applied until July 2028.
In this regard, several key steps are included in the fare setting process of IPART (Independent Pricing and Regulatory Tribunal) for public transportation in New South Wales:
* IPART considers the amount that transportation services incur and compares this figure with economic considerations and public necessities.
* They proceed with holding public consultations to get the views of stakeholders and the public.
* The proposed fare adjustments take account of this information, and it will be further reviewed and refined through additional detailed analysis and feedback.
* Finally, maximum fares are established so as to reach an equilibrium between affordability for users and the sustainability of the transport services.
IPART considers the following attributes during the setting of fare, among other requirements provided by the law:
* the cost of providing the services
* further efficiency is what is called for in the provision of services, hence, reducing cost for consumers and taxpayers.
* the protection of consumers from abuses of monopoly power in terms of prices, pricing policies, and standards of service.
* The social impact of the decision or recommendation the impact of the determination or recommendation on the use of the public passenger transport network and the need to increase the proportion of travel undertaken by sustainable modes such as public transport
* quality, reliability, and safety of services (whether the quality, reliability, or safety has been prescribed by law, agreement, or otherwise)
* The effect on the level of Government funding
* any matter referred in the referral to IPART
* any other thing IPART thinks is important.
IPART undertakes robust public consultation during each review process to be able to understand the full extent of stakeholder views and consider them alongside the findings of our economic modeling and analysis. This ensures that, in any fare changes taking place, there is due information and consequent fairness to the parties involved, supporting efficiency and effectiveness of the public transport system.

#### Public Reception of Current OPAL Fare Structure

The new introduced cheaper fares on Friday, applying at a 30% discount for services on metro, train, bus, and light rail, have won positive feedback, meant to boost city visit and, on traditionally quieter days, business. However, there was a mixed reaction among the common people in general, as at the said juncture, the living cost had already shot up very high. Business leaders and government officials emphasize that cheaper travel would entice more people to the city, both for work and leisure, which would actually revitalize the city center, especially given the situation that many people work-from-home on Fridays. This is viewed as a strategic response to the challenge of reduced commuter traffic due to increased remote work practices.

##### Petition of travel concessions for international students in NSW

New South Wales (NSW) is currently the only state which does not provide discount for international students in Australia. In Victoria, international undergraduate students can buy a Travel Pass that can save $1,034 a year. Full-time International students studying in Queensland can access a 50% concession fare.
For over 20 years, campaigns—such as those by the Sydney University Postgraduate Representative Association (SUPRA) and the University of Sydney's Students' Representative Council (SRC)—have highlighted this inequity. Despite all the petitions and advocacy, we still have poor progress, and many students face financial hardships due to high transportation costs, which goes into their overall living costs.
Petition Advocates
In 2024, SUPRA initiated the second round of the petition. With over 20,000 signs, the petition went through the Parliament of NSW and discussed on it. This petition denotes the Legislative Assembly of New South Wales for extending travel concessions to all students, including international and part-time students, referring to the existing unfair policy. It also shows that New South Wales is the only Australian state that does not give any concessions to be given to international students, who significantly contribute to the economy of the same state. When lacking the concessions, it has a bearing not only on their potential to be involved in state-wide economic activities but also places undue financial burdens on the part-time students, many of whom face challenges like caregiving responsibilities or disabilities.
Response from Government
The NSW government realizes that since full fee-paying overseas students in New South Wales are supposed to show sufficiency of funds under visa conditions, they will also not be eligible to avail themselves of travel concessions. However, through this study fare, it will allow these students to benefit by getting a 15% discount on regional rail. These students are also exposed to the adult Opal ticket, which has a weekly cap of fares. Part-time students with disabilities are also permitted travel concessions, but other part-time and correspondence students are not eligible since their study format allows potential full-time employment.

#### Fare Change Options

Options that are usually available when considering changes to the public transport fare structure in NSW generally include:
* Indexation to Inflation: Fares may be indexed in accordance with the inflation so that its real value does not diminish over time. In most instances, this will mean raising the fares by a percentage of the annual rise in the Consumer Price Index (CPI).
* Cost Recovery - The adjustments are made to recover costs of providing services in transport more effectively. This may mean increased fares to cover higher operation costs or investments in infrastructure.
* Demand Management: Fare changes can be used as a tool to manage demand on the transport network. This can be through, for example, offering off-peak times lower prices of fares so as to encourage users to travel at times outside the busy period, hence distributing the demand more evenly over the day.
* Social and Policy Objectives: Fare adjustments may also be premised on broader social and government policy objectives, such as improved accessibility to low-income passengers or increased public transport use that assists in easing traffic congestion and decreasing environmental impact.
* Depending on the mode or distance, adjustments might be made in modality or distance. This could include simplification of the fare structure or the introduction of new fare products that are relevant to a particular user group or travel pattern.
* Introducing or adjusting caps on daily, weekly, or monthly travel expenses, offering discounts, for instance, off-peak travel, weekends, special passenger categories such as students, seniors, and others.

#### Social Optimization of Fares

Social fare optimization is the pricing and modification of public transportation prices in order to attain broader social objectives associated with an increase in accessibility, decrease of congestion, and improvement of environmental sustainability. The following are key approaches and considerations in social optimization of fares:
* Equity and accessibility: Affordability of transport services to all sections of the society including low-income groups, disabled persons, and senior citizens. This can include things such as tiered fare structures, subsidies, or capped fares so that cost isn't a barrier to mobility.
* Demand Management: Using fare structuring to manage peak and off-peak usage. Cheaper fares during off-peak times can encourage passengers to travel outside of busy periods, helping to distribute demand more evenly and reduce congestion.
* Integration Across Services: This entails coordination of fares across different modes of transportation (buses, trains, ferries) so that the payment system is simplified, which may encourage the use of public transport against private vehicles. Key in this approach are integrated ticketing systems.
* Environmental Consideration: Encouraging the use of public transport rather than private transport to reduce traffic, as traffic causes congestion of emissions. This can involve reducing the rate of electric or zero-emission buses and trains.
* Public consultations: Engage with the community through Public Consultations to understand the people's differing needs and preferences of the various user groups. This can be critical for feedback from the community in designing socially beneficial and widely accepted fare systems.

## Narrative
#### IPART Role in Fare Setting

The fare setting process for public transportation in New South Wales (NSW) is managed by the Independent Pricing and Regulatory Tribunal (IPART). It involves evaluating transportation costs, aligning them with economic and public needs, and incorporating feedback from public consultations. The NSW Transport Department sets fares below the maximum, while IPART advises on the maximum fare, reviewed every four years. Key considerations include cost-efficiency, consumer protection, social impact, service quality, government funding, and any relevant legal requirements. This thorough process ensures that fare adjustments are fair, informed, and support an efficient public transport system.

#### Leadership

The main three members of the tribunal are appointed by the premier of as permanent members. Temporary members may be added as appointed also by the premier. The tribunal is led by a chairperson to be appointed from among the permanent members. It is the responsibility of the premier to ensure that members of the tribunal have a knowledge and understanding of economics, consumer interests, and supplier interests.

#### 2020-2024 Maximum Opal Fares

* Scrapped 5.0% increase fares due to the pandemic.
* 3-4 day passes, yet to be implemented.
* Off-peak fares for bus and light rail services (only trains had off-peak rates previously).
* Integrated fare structure to consider origin and destination points regardless of transport modes.
* Lower fare options for healthcare cardholders to reduce barriers to participation in the community.

#### Free-fare travel

IPART considered the viability of a purely taxpayer subsidised public transport. After an extensive review of public transport networks four major cities in Europe (Paris and Dunkirk in France, Tallinn in Estonia, and Hasselt in Belgium, it determined that:
* Traffic would decrease at most 2-5%.
* Ridership would increase up 40% immediately.
* Peak time travel would reach capacity sooner
* Future operational costs would increase with newly built
* $1.6 billion lost annual revenue
* Scheme mostly benefits current non-car users, pedestrians and cyclists.
* Social activity could increase but with not quantifiable measurement.
* Higher taxes which neutralises the part of paying for travel.

#### Public Reception of Current OPAL Fare Structure

Newly introduced 30% discounted fares on Friday for public transport aim to boost city visits and business, receiving mixed reactions due to high living costs. Officials believe the cheaper fares will attract more people to the city, countering decreased commuter traffic from increased remote work.

#### Petition of travel concessions for international students in NSW

New South Wales (NSW) remains the only Australian state that doesn't offer transportation discounts to international students, unlike Victoria and Queensland where significant savings are available. Despite over 20 years of advocacy by organizations like the Sydney University Postgraduate Representative Association (SUPRA) and the University of Sydney's Students' Representative Council (SRC), little progress has been made. This lack of concession contributes to the financial burden of high transportation costs for many international students, affecting their overall living expenses.

#### Fare Change Options

In NSW, changes to public transport fares are typically considered to address several goals. Fares might be indexed to inflation to maintain value, adjusted for cost recovery to offset higher service or infrastructure costs, or used to manage demand by encouraging off-peak travel. They can also reflect broader objectives like increasing accessibility for low-income passengers or promoting public transport to alleviate traffic and environmental issues. Additionally, fare structure may be simplified or new products introduced for specific groups, and fare caps or discounts could be applied to support various passenger categories.

#### Social Optimization of Fares

Social fare optimisation adjusts public transportation prices to achieve goals such as improved accessibility, reduced congestion, and enhanced environmental sustainability. This approach includes making fares affordable for all societal segments, including low-income groups, disabled persons, and seniors, through mechanisms like tiered fares or fare caps. It also involves using fare structuring to manage peak and off-peak usage, encouraging travel outside busy periods to evenly distribute demand. Integration of fares across different transportation modes, like buses, trains, and ferries, simplifies the payment system and may encourage shifts from private to public transport. Additionally, promoting the use of environmentally friendly transport options, such as electric or zero-emission vehicles, helps reduce traffic and emissions. Engaging the community through public consultations is crucial to understanding diverse needs and crafting widely accepted fare systems.

## Discussion Questions

* Should IPART's increase in travel fares for 2024-2028 period be implemented?
* There are several considerations in the costs of each public transport mode. Can it be possible to have an origin to destination pricing model and if so, how will the fare price be determined?
* Do you agree with IPART's assertion that free public transport in NSW is not feasible?
* Opal currently prioritises giving travel discounts to 10 different groups of people from the elderly, to full-time Australian/New Zealand students and people with disabilities. Should IPART prioritise implementing discounts to international students as well? Should any other group receive discounts?
* Could the impartial nature of this tribunal be improved? Do they truly have the general public's interests in mind?

## References

* 1 2 "About IPART". IPART. Retrieved 2024-04-30.
* ↑ "Our Role". IPART. Retrieved 2024-04-30.
* 1 2 3 4 5 6 "Independent Pricing and Regulatory Tribunal Act 1992 No 39". NSW Government. New South Wales Government. Retrieved 2024-04-30.
* 1 2 3 4 5 6 7 8 "Passenger Transport Act 2014 No 46". NSW Government. New South Wales Government. Retrieved 2024-04-30.
* 1 2 "Compliance Statement: Fares for Sydney Trains and NSW TrainLink intercity services, Sydney Ferries and metropolitan and outer metropolitan bus services from January 2016" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-02.
* 1 2 3 "Transport for NSW Contactless Payments Trial". www.stgeorge.com.au. Retrieved 2024-05-03.
* ↑ "QA of Transport for NSW pricing proposal for compliance with IPART Determination" (PDF). Frontier Economics. July 2016. Retrieved 2024-04-30.
* ↑ "QA of Transport for NSW pricing proposal for compliance with IPART Determination" (PDF). Frontier Economics. July 2017. Retrieved 2024-04-30.
* ↑ "Quality Assurance of Transport for NSW's 2018-2019 Pricing Proposal for Compliance with IPART Determination" (PDF). Frontier Economics. Retrieved 2024-04-30.
* ↑ "Quality Assurance of Transport for NSW's 2019-2020 Pricing Proposal for Compliance with IPART Determination" (PDF). Frontier Economics. Retrieved 2024-04-30.
* 1 2 "Opal Review 2020 Draft Report - Public Hearing" (PDF). IPART. Independent Pricing and Regulatory Tribunal. 2020-02-19. Retrieved 2024-05-03.
* 1 2 3 "2019-20 Fares for Opal Services Pricing Proposal" (PDF). IPART. Transport for New South Wales. 2019-06-24. Retrieved 2024-05-03.
* ↑ "The Tribunal, Executive and Committee team". IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-04-30.
* ↑ "Government Pricing Tribunal Amendment Act 1995 No 97". NSW Legislation. New South Wales Government. Retrieved 2024-05-01.
* ↑ Munro, Peter (2012-11-25). "Test of city's ticket to ride will decide if Opal is Coalition's trump card". The Sydney Morning Herald. Retrieved 2024-05-03.
* ↑ "Opal roll out begins for train customers | Transport for NSW". web.archive.org. 2013-06-09. Retrieved 2024-05-03.
* ↑ "Opal card trial for bus customers begins | Transport for NSW". web.archive.org. 2014-03-31. Retrieved 2024-05-03.
* ↑ "Transmittal Letter for the Pricing Proposal" (PDF). IPART. Transport for New South Wales. 2014-08-04. Retrieved 2024-05-03.
* ↑ Saulwick, Jacob (2014-11-23). "Opal card use on Sydney light rail starts on December 1". The Sydney Morning Herald. Retrieved 2024-05-03.
* ↑ "Compliance Statement: Fares for Sydney Trains and NSW TrainLink Intercity services, Sydney Ferries and Metropolitan and Outer Metropolitan Bus services from 1 September 2014" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-01.
* ↑ "Compliance Statement: Fares for Sydney Trains and NSW TrainLink intercity services, Sydney Ferries and metropolitan and outer metropolitan bus services from January 2015" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-02.
* ↑ "2016-17 Fares for Opal Services" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-02.
* ↑ "2017-18 Fares for Opal Services" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-02.
* ↑ "2017/18 Fares for Opal Services Pricing proposal" (PDF). IPART. Transport for New South Wales. Retrieved 2024-05-03.
* ↑ "Compliance Statement: 2018-19 Fares for Opal Services" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ "2018-19 Fares for Opal Services| Pricing proposal May 2018" (PDF). IPART. Transport for New South Wales. Retrieved 2024-05-02.
* ↑ NSW, Transport for (2018-07-23). "Opal One Day Travel Pass". www.transport.nsw.gov.au. Retrieved 2024-05-03.
* ↑ "Compliance statement: Opal fares for 2019-20" (PDF). IPART. Independent Pricing and Regulatory Tribunal. 2019-06-14. Retrieved 2024-05-03.
* 1 2 "Maximum Opal Fares 2020-2024" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ "Opal fares for 2020-21" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ "Public transport fares to increase for Sydney commuters from next week". 7NEWS. 2020-09-28. Retrieved 2024-05-03.
* ↑ "Opal fares from 5 July 2021" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ "Opal fares from 4 July 2022" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ "Opal fares from 16 October 2023" (PDF). IPART. Independent Pricing and Regulatory Tribunal. 2023-09-29. Retrieved 2024-05-03.
* ↑ O'Sullivan, Matt (2023-06-27). "Commuters get reprieve from Opal fare rises as changes considered". The Sydney Morning Herald. Retrieved 2024-05-03.
* ↑ "Maximum Opal fares until July 2028 | Issues Paper" (PDF). IPART. Independent Pricing and Regulatory Tribunal. Retrieved 2024-05-03.
* ↑ Wade, Matt (2021-04-22). "'Bring people back to town': Government considers free public transport to boost CBD". The Sydney Morning Herald. Retrieved 2024-05-03.
* ↑ Visentin, Lisa (2019-03-07). "NSW Greens propose $1 metro fares to 'revolutionise' public transport system". The Sydney Morning Herald. Retrieved 2024-05-03.
* 1 2 "Investigating fare-free public transport". IPART. Retrieved 2024-05-03.
* ↑ Hess, Daniel Baldwin (2017-12-01). "Decrypting fare-free public transport in Tallinn, Estonia". Case Studies on Transport Policy. 5 (4): 690–698. doi:10.1016/j.cstp.2017.10.002. ISSN 2213-624X.
* ↑ "Maximum Opal Fares 2020-2024". Retrieved 2024-05-03.
* ↑ NSW, Transport for (2023-06-22). "Historical Trips by Financial Year - All Modes". www.transport.nsw.gov.au. Retrieved 2024-05-03.
* ↑ Rabe, Tom (2021-07-19). "Sydney's public transport patronage at lowest levels since 1800s". The Sydney Morning Herald. Retrieved 2024-05-03.
* ↑ "Opal Fares". IPART. Retrieved 2024-05-03.
* ↑ IPART, Transportation Fares. "Transport Fares".
* ↑ "View - NSW legislation". legislation.nsw.gov.au. Retrieved 2024-04-28.
* ↑ Transport for NSW, Customer Experience Division (2023-09-17). "Opal fare changes from 16 October". transportnsw.info. Retrieved 2024-04-28.
* ↑ AGLAECA9 (2023-10-08). "Opal fare changes from 16 October". r/sydney. Retrieved 2024-04-29.
* ↑ "Friday fares slashed in bid to revitalise Sydney CBD". www.9news.com.au. 2023-10-20. Retrieved 2024-04-28.
* ↑ Victoria, Public Transport. "International students". Public Transport Victoria. Retrieved 2024-04-29.
* ↑ "Concessions | Translink". translink.com.au. Retrieved 2024-04-29.
* ↑ "Travel concessions for all students: Demands for equality ignored for 20 years - Honi Soit". 2024-02-13. Retrieved 2024-04-29.
* ↑ "Ms Jenny Leong—Make transport concessions available to all students in NSW". www.parliament.nsw.gov.au. Retrieved 2024-04-29.
* ↑ "Response by the Hon Jo Haylen - received 16 April 2024 - to petition lodged 12 March 2024 - Make transport concessions available to all students in NSW (Jenny Leong)". www.parliament.nsw.gov.au. Retrieved 2024-04-29.
* ↑ Transport for NSW, Customer Experience Division. "Fares and payments". transportnsw.info. Retrieved 2024-05-03.