Research | Social mobility and wellbeing | 2011-09-27

Study on Travel Cost Reduction Schemes for the Elderly and Regular Long Distance Travellers

The Bauhinia Foundation Research Centre (BFRC) has recently commissioned a study to examine public transport fares of the regular long distance travellers and the elderly. The findings of the study will form a major part of its Policy Address submission, which will be made to the Chief Executive shortly.

With a view to recommending policy options to relieve the burdens of these travellers, the study involved literature reviews, interviews with socials service groups as well as a telephone-based poll conducted between 7 and 13 June. The telephone poll reveals that about 73% of the 1,007 respondents said long distance transport fares were too high. 71% of those who used public transport (excluding taxis) agreed that monthly passes should be introduced to reduce travel costs. The respondents spent on average about $740 each month on public transport, while they felt $620 was an acceptable amount for their monthly travel expenses.

Currently, there are about 1.78 million people living in Tuen Mun, Yuen Long, North District, Tai Po and the outlying islands, representing close to a quarter of the local population. According to the study, those who reside in these districts (e.g. Tuen Mun) and work in Central have to spend as much as $1,100 on public transport, which is clearly above the ‘acceptable level’ of the respondents.

The BFRC Chairman Anthony Wu said, “The current fares basically reflect the cost of providing such services; transport costs are higher for longer trips. But the reality is the high transport cost has become a burden on regular long distance commuters, many of whom are people at the grassroots level.”

The study points out that a revision of fare scales could be a lengthy process. In the short term, it will be difficult to reach a consensus if short to medium distance fares have to be increased more than average to cover the revenue losses resulting from fare reductions of long distance trips.

Another option is to require public transport operators to issue new monthly passes to regular long distance travellers outside the West Rail and East Rail routes of the MTR.

“We can envisage that it will be difficult to implement the monthly pass scheme in view of the number of operators involved. This will also entail government subsidies to cover the anticipated revenue losses, otherwise the operators may not be able to afford substantial discounts to make the passes attractive,” Mr Wu said. Instead, the study recommends setting a multi-mode monthly expenditure cap, applicable across various public transport modes, on qualifying trips made by regular long distance travellers. As the intention is to benefit regular long distance travellers, it is proposed that only trips (which may include feeder trips on different modes made within a certain time period) costing $14 or above should be counted under the scheme.

The monthly cap, according to the study, will be triggered once the transport expenditure exceeds $700 (which more or less covers the expenses of 52 long distance trips, with each costing $14, on 26 working days each month). Further transport expenditure would be paid by Government through the Octopus Card until it reaches $1,000, while any subsequent travel cost would be the responsibility of the passengers. The study further proposes that the scheme should be nonmeans tested as its targets are not just low income groups. This will also obviate the administrative burden on the targeted travellers.

Having regard to the working population and their estimated need to make long distance travel in the above-mentioned districts, the scheme is expected to cost the Government about $1.1 billion to $1.3 billion each year.

“As a result of our continuous population growth, we need to consider the long-term implication of our population shift to the outer areas given that our urban areas are already densely populated.

“For the sake of sustainable developments, it is worth considering policy options that can make long distance travel more affordable in the form of Government subsidies, so that people will become more willing to move to the outer areas. This is the kind of social benefit we should not overlook,” said Mr Wu.

The study also looks at the travel costs of the elderly aged 65 or above, who currently enjoy different levels of fare concessions (approximately 50% or $2 flat fare on all routes on specific dates) when travelling on MTR, ferries, trams and franchised buses. There is only one ferry operator that offers free trips to elderly passengers.

In comparison, elderly passengers (aged 60 or 70 years old) in London, Paris, Tokyo and Guangzhou normally enjoy 50% fare concessions or free travel on public transport. In the case of Guangzhou, those who reach 60 years of age are entitled to 50% fare concessions, while free travel on public transport is offered to those who are 65 or above.

In Hong Kong, many low-income elderly people tend to be confined to their homes, not least because of the unaffordable public transport fares. Considering the pros and cons of various options, the study recommends the Government providing elderly passengers aged 65 or above with a maximum monthly transport allowance of $100 or $200 through the Octopus card.

Depending on the actual subsidy level and taking into account the size of the age group and their trip rate, it is estimated that the subsidy will cost the Government about $0.8 or $1.2 billion each year.

Mr Wu said, “In line with our ageing population, we support the idea of providing the elderly with more transport fare concessions to encourage them to lead an active social life after retirement. Together with the existing elderly fare concessions, our proposal would in effect result in free travel for a large proportion of elderly passengers.”


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