Economists warn slashing public transport fares to 50¢ is another example of wasteful government spending that will fuel inflation.
Economists say permanently slashing public transport fares to 50¢ in Queensland is yet another example of wasteful government spending that will add to government debt and inflation pressures.
Brisbane-based economist Gene Tunny said: “It doesn’t make a lot of sense in the current budgetary or inflation environment and strikes me as more politically motivated than economically sensible.”While cheaper public transport will have a one-off effect of pushing down transport costs measured in the consumer price index, ultimately it will put more money in the pockets of consumers and likely add to demand pressures for other goods and services.
“Both sides are ignoring that they do have to get the budget back into shape if we want to avoid the debt and interest situation of Victoria and NSW,” Mr Tunny said.After a string of big-spending government budgets in May and June, the Reserve Bank of Australia said last month it expected public demand to grow by 4.3 per cent this year, up from a previous estimate of 1.5 per cent.
In the five weeks since the 50¢ trial began, patronage in South East Queensland was nearly 20 per cent higher than last year and more than 5 per cent higher than 2019, before COVID-19 led to passengers abandoning public transport.“I said it was use it or lose it,” Mr Miles said on Sunday. “Queenslanders across the South East and through the regions have backed it.”
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