Dunedin's biggest commuter bus companies will ask the Government to reconsider cutting travel subsidies to stave off potentially significant financial losses.
Dunedin Passenger Transport and Citibus Newton managers on Friday said they would argue the changes will cost them thousands of dollars and cause them undue hardship.
They said the old SuperGold Card subsidy was an important part of the tenders that won them their contracts and any change would hit their bottom line.
"We tendered for our contracts in one environment, and now that environment is being changed," Dunedin Passenger Transport director Kayne Baas said.
"We will need to apply the hardship clause. Any change to our revenue will be a significant hit."
Transport Minister Steven Joyce on Friday confirmed the Government would cut its SuperGold Card free-travel scheme subsidy from 75% of the full adult fare to 65%.
The $18 million scheme would also get a $9 million top-up over the next two financial years as part of a "balanced" package to ensure its long-term viability, Mr Joyce said.
In March, GreyPower feared entitlements could be lost when Mr Joyce announced the scheme would be reviewed and increasing costs could be cut.
On Friday, Mr Joyce said the Government was committed to retaining the scheme, including the transport concession as it stood.
Instead of tackling entitlements, he sought administrative efficiency from the Government and councils to ensure value for money and provision of the best possible services.
Councils would have to absorb the costs of administering the scheme, and the New Zealand Transport Agency's scheme administration budget would be cut.
Subsidies were to be set at a level that better reflected the benefits to operators of more seniors using free off-peak public transport, he said.
Operators who could prove they could not continue specific services on the new rate could apply for a higher rate up to the original 75%.
"The Government has made it clear we don't expect operators to profit from the scheme, but neither do we expect them to be out of pocket," Mr Joyce said.
Dunedin companies warned last month they would struggle to absorb the cut.
Mr Baas considered a top-up fare or leaving the scheme altogether in the face of a five-figure revenue cut.
At the time, Mr Joyce said the hardship clause would ensure companies would be reimbursed to the point they felt they could continue in the scheme.
Mr Baas accepted the assurance but said the Transport Ministry and the New Zealand Transport Agency were yet to clarify how it would work.
Citibus Newton general manager Tony Collins confirmed his company would use the hardship clause to claw back possible losses, which could run into the many thousands of dollars.
The Otago Regional Council's bus route contracts were so-called "net" contracts, which meant companies could not claim any additional costs.
Losing the subsidy revenue was an additional cost on fixed and very competitive contracts, Mr Collins said.
Council corporate services manager Wayne Scott said it cost about $30,000 a year to administer the scheme.
The council would have to consider its options if it could not claim that back from the Government.
The SuperGold Card scheme worked in conjunction with the GoCard system, and the associated GoCard costs would also have to be assessed, Mr Scott said.
Labour Party acting transport spokeswoman Darien Fenton and Green Party MP Sue Kedgley said ratepayers looked set to pick up the bill for a national transport policy.
