We believe in public financing
Financing public transport means investing in the environment, our communities and future generations. It has to be given much higher political priority. However, financing of public transport as well as other essential public services face enormous deficits. This happens in a world awash with so-called idle capital. It is therefore not a lack of resources we face, but a lack of public resources.
The situation is created by politics, a neo-liberal policy based on tax cuts for the rich, and austerity policies and privatisation in the public sector. The concentration of wealth in private hands, we were told, would make it possible to mobilise private sector investments into public services through privatisation and PPPs – even more efficient than what could be done by the public sector itself. This model has failed. What we have seen, is that private investors are ‘risk averse’ and concerned about revenue streams and returns on investment. The needs of the public, and the environment, have little effect on investment decisions that see profit as the primary objective.
Public financing in transport is better allocated and more sustainable. Well-planned investment today can avert unsustainable and unplanned costs in the future. To make private financing profitable, networks must be fragmented, costs must be cut, and spending must be reduced. Decent work, fair fares and safety are the first victims of underinvestment.
The challenges we face in public transport can only be met through a planned and coordinated approach. The model of financing must be seen in a wider context – of democratic control, mobility equality, public good, progressive and redistributive tax policies and decent work. There must therefore be public investments, and not private finance or PPPs.
Policy proposal 4: Prioritise investment in public transport
Public transport is dependent upon government funding and therefore reflects general budgetary decisions and fiscal policies. As such progressive and redistributive taxation and measures to combat tax evasion are central to raising funds for public transport.
The upfront costs for public transport systems can be considerable, but the social, economic and environmental benefits of public transport far outweigh the costs. Improvements in public health, shortened commuter times, and reduced emissions will raise productivity and improve the quality of life for millions of people. Given the climate emergency, the costs of not investing more in public transport are too high not to take action.
Policy proposal 5: Promote public finance models
One opportunity to fund public transport lies in Public-Public Partnerships (PuPs), that are based on solidarity rather than profit seeking. They have offered a vital funding opportunity in other public services. Another way to mobilise finances for public transport is to cross-subsidise across public services. Climate finance is another emerging funding stream for the financing of public transport. These funds should not reinforce political and economic models that caused climate change, and instead must promote transport and energy democracy.
Employers benefit from public transport and should contribute to it either through a special tax or by making them responsible for subsidising their employees’ transport routes.
PuPs are the collaboration between two or more public partners to improve the capacity and effectiveness of one partner in providing public services. A common way to initiate PuPs are city to city¸ or country to country partnerships. PuPs are peer relationships forged around common values and objectives, which exclude profit-seeking.
Participatory budgeting can also lead to the improvement of basic services, increased tax revenues and reduced tax evasion. The aim is to enable local people to increase democratic influence over municipal budgets ensuring public spending is in line with community interests.
Policy proposal 6: Consider fare-free public transport
Fare-free public transport increases usage and reduces private car journeys. With the removal of fares, social exclusion, inequality and transport poverty can be tackled. Making public transport free would increase access to mobility and reduce congestion and CO2 emissions. Passengers become ‘climate protectors’. With no fares, public transport is no longer seen as a commodity, but as a common good similar to many other public services, such as parks, cycling paths, streetlights, libraries, health and education. There are an increasing number of cities making transport fare-free either permanently, on certain days (for example when air pollution is high) or for certain groups of users, such as children or the elderly.