2023-07-27 07:14:28
The announcement by Finance Minister Bezalel Smotrich and Transport Minister Miri Regev yesterday (Wednesday) about curbing the increase in public transport prices and reductions from September is good news for a considerable part of the public, but not without costs. Occasional passengers may pay more, due to the lack of access to discounts and due to the more expensive travel on light trains. In addition to this, as a precedent, development funds will be allocated for the benefit of travel subsidies in ultra-Orthodox communities.
The prices of public transportation are the bottom line of a formula that weighs a variety of considerations: what is the cost of operating the service, how much money is allocated by the state for subsidies and to what amount of trips this budget is divided. In addition to this, there are social and political considerations regarding giving discounts.
It was very important for Sarah Miri Regev (Likud) to register an achievement at the expense of amending the “Derech Shaveh” reform of her predecessor in the position of Merav Michaeli (Labor). At the time, Michaeli was also faced with a similar crossroads – the input basket of public transportation had to rise significantly, and had to be more expensive, while the Ministry of Finance, then headed by Avigdor Lieberman (Israel Beitenu) did not agree to absorb this. The result was a delay of a few months in the increase in price, then a small reduction of it, while hiding it in the framework of another reform of reducing the amount of tariffs. Unique arrangements of discounted tickets in many peripheral cities have been eliminated, as well as the “accumulated value” discount, which was significant for occasional travelers. The CBS found that the weighting of the changes in rates caused the price to rise.
This is the foundation upon which Minister Regev’s “Transportation Justice” reform was born, which costs approximately NIS 360 million per year, and is intended to provide large discounts on ticket prices according to social distinction – peripheral settlements, settlements with a weak economic rating (1-5), free trips for all the elderly, trips Free for one year for veterans, discounts for young people up to the age of 26 and others.
The very day after its presentation, the Treasury clarified that this plan has no budgetary source. Finance Minister Smotrich addressed it at a press conference regarding the state budget and admitted that he does not support it professionally, but recognizes the right of Regev and the Ministry of Transportation to determine internal priorities in their budget. In other words – the treasury will not add money, but will allow internal deviations. Regev didn’t like the Treasury’s approach, but giving discounts is more public, than providing service additions on new lines and frequency improvements. The result – the money was swallowed up to provide the discounts until the end of 2024 almost no service additions will be applied in public transport.
The Treasury’s argument in favor of service additions and against giving discounts also has a dogmatic dimension. In any case, it is impossible to add lines without a dramatic addition of drivers in the industry, the shortage of which is estimated at 3,000 to 6,000 drivers. Even a sectoral wage increase to around NIS 50 per hour is not enough to fill the shortage. Driver salary increases are a significant part of the increase in the price of the input basket “objectively”, so to speak, and is a convenient way for the treasury to absorb budget increases and make it difficult for transport ministers to set budgetary priorities in their office.
Like Michaeli before her, Regev was faced with this very obstacle – the basket of inputs continued to rise, which required a significant additional increase, at a cost of another NIS 300 million, which she wanted to prevent. The Ministry of Finance initially suggested that Sarah give up “transportation justice” discounts, just to prevent the fares from becoming more expensive.
Minister Regev decided to go for the entire pot, amounting to approximately NIS 750 million, and to carry out a ‘combination deal’ of various budgetary sources. The difficulty of forging an agreement with the Treasury meant that yesterday more expensive prices went into effect in the travel apps, in accordance with the Price Committee’s order, and only yesterday Regev and Smotrich announced the cancellation of the price increase, after all disputes had been resolved. The discounts will come into effect in September.
As part of the negotiations, the Treasury also insisted on allocating the discounts only to buyers of a “monthly free” periodical contract and not to occasional passengers, which could encourage increased use of public transportation, but also prevents the granting of discounts to a significant portion of passengers.
Most transportation experts tend to support the position of the Treasury, according to which the main goal should be to shift passengers from private vehicles to public transportation, and the way to achieve it is with the help of service additions and improving its reliability, when ticket prices have a marginal effect, if any, on the choice between a private vehicle and public transportation.
Regev decided to ignore this, and to place a different order of priority, using the transportation policy to achieve social goals and register a double political achievement on her behalf, in front of the public in giving the discounts, and in front of the Treasury, which agreed to a larger investment of NIS 750 million. Their distribution is interesting in itself, and although it is not fully visible to the public, some of its details make it possible to see who will gain and who will lose.
According to Deputy Minister Makleb, the ultra-orthodox sector development authority, which is intended for development investments that have a future return, will allocate tens of millions of shekels to a sectoral subsidy fund. The move will allow residents of cities such as Jerusalem, Bnei Brak, Modi’in Elit, Elad and others to purchase for NIS 110 a “monthly pass” for traveling on buses all over the country (not including the train). Both Makleb and Regev emphasized in their remarks the issue of easing the cost of living.
The tickets on the light trains will become more expensive for the general public, from a price similar to a bus ride, to a price that has not yet been announced, and is expected to be NIS 8 for a single ride. The first line of the light rail in Gush Dan is expected to open in August, and together with the light rail in Jerusalem, it is a significant increase in price for casual passengers. In doing so, Regev adopts an approach according to which the price of the ticket reflects the differences in the cost of the service – expensive on the Israel Railways, medium on the light rail and cheap on the bus.
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