We have increased investment in services across the region in the past few years, including creating the first fully electric bus network in Australasia when we launched the redesigned Papaioea Palmerston North and Otangaki Ashhurst network in March 2024. This investment has resulted in increased patronage, with Papaioea and Otangaki passenger numbers increasing by about 40% since the new network launched there.

We proposed in our 2024-34 Long-term Plan to continue this investment by improving the Whanganui bus network and creating new services for Horowhenua. Bus use in Whanganui more than doubled after the 2023 introduction of Te Ngaru The Tide - a fast, frequent and direct route connecting Castlecliff and Aramoho via key locations in the city centre. Meanwhile, the population of Horowhenua is growing rapidly, and a better public transport network will help new residents make connections across the district. Furthermore, the Capital Connection train service between Papaioea Palmerston North and Te Whanganui a Tara Wellington is due to go from one return service per weekday to four from 2029, as well as introducing weekend services - providing public transport services in Horowhenua would help people connect to the enhanced rail service.

We set aside funding in Year 2 of our 2024-34 Long-term Plan - our 2025/26 Annual Plan - to make those improvements in Whanganui and create new Horowhenua services. However, when we created our 2024-34 Long-term Plan we were not yet sure if we would have co-investment from NZ Transport Agency Waka Kotahi (NZTA). In the past, we have only provided new public transport services if we received co-investment from NZTA. Central government has revised its funding priorities and not provided the co-investment we sought for the Whanganui Improvements and new Horowhenua services.

We are proposing to improve services in Whanganui and provide new services in Horowhenua without the NZTA co-investment. We would not boost our contribution to cover the current shortfall in funding from NZTA. This means we are not proposing rating above what we agreed on in our 2024-34 Long-term Plan. It also means improvements and new services would not be at the same levels we initially planned. However, we intend to design these networks with the ability to increase services if funding from NZTA is available in the future.

How we rate for our portion of public transport funding will not change no matter how we proceed. Rates for public transport services will remain 100% targeted to properties in specific districts based on equalised capital value. For the improved services in Whanganui and new services in Horowhenua, the rates would be 100% targeted to properties which are predominantly urban in character in those respective districts.