Media release

ORC lifts bus drivers’ wages for third time to $30 per hour

Tuesday 28 March 2023

The Otago Regional Council is for the third time in seven months lifting the pay rates of bus drivers for its two bus contractors in Dunedin and Queenstown.

In a public excluded section of last week’s full Council meeting, it approved drivers’ wages should rise from $27.76 to $30 per hour, a more than 8% increase, backdated to 1 March.

The move is just one tool in the box to attract and retain bus drivers to Otago, says ORC’s Interim Chief Executive Dr Pim Borren.

“The ORC is being proactive in relation to this labour shortage issue and once again we’ll be one of the first councils in the country to go to $30 per hour,” says Dr Borren.

Dr Borren acknowledges the Dunedin service is still facing challenges to get back to full timetabling and apologises again to people whose buses are not turning up.

“We are working with a new provider to assist us with improving the Transit App for real time information on buses and hope to have this running in the next few weeks”.

“The crucial issue remains that our bus operators just cannot get drivers on-board quickly enough,” he says.

He notes the move to $30 p/h is above the median rate of truck drivers, which the public transport  sector is in competition with.

The public transport sector remains short of several hundred drivers across the country, which has impacted on timetables and service deliveries for almost a year now.

“Drivers wages and conditions have historically been identified as the main reason for the lack of new drivers coming into the sector, and also in retaining them,” he says.

He also notes Immigration NZ requires the minimum to be paid to migrant drivers is $29.66, before they can acquire a visa.

“For Otago, we really want to see a boost to driver numbers coming from the immigration system,” he says.

Dr Borren says ORC has now delivered a more than 30% increase in drivers’ rates from last August, from $22.75 up to $30.

ORC is now negotiating with contractors Ritchies and GoBus to implement the pay rise.

In August last year ORC opted to pay extra funding to its bus operators, so drivers wages rose from the then current Living Wage rate of $22.75 per hour, rising by 90c, or 3.95%, to $23.65. The following month in September, ORC decided to raise drivers wages again to the median wage level, to $27.76 per hour.

The overall cost of moving from $27.76 to $30 per hour is $1.16m, of which Waka Kotahi NZ Transport Agency will pay 51%; or $595,133.

“This [pay rise] is a key decision especially for Queenstown which remains on a reduced timetable because of the time it is taking to recruit migrant bus drivers,” he says.

“It’s just as important for Dunedin, because if more drivers were available, we could hire 20 tomorrow,” he says.

Dr Borren says while timetabling in Queenstown is steadily improving, bus cancellations around Dunedin are often in the 10% per day range; because of the lack of drivers which has been further compounded by illness.

In the Government’s 2022 Budget, $61m was committed over four years to fund a nationwide multi-sector agreement for better bus driver conditions; largely to raise their hourly rates.