Budget 2023 touted a $327 million plan for free public transport for children and half-price fares for people under 25 years old as "tackling the cost of living and climate change together".
Bus Users Support Group Otepoti co-president Liz Angelo said it could also end the daily parade of cars into her neighbourhood.
Mrs Angelo said she lived near five central city schools and the traffic was "amazing" in the morning and after school.
There were bus options available, but parents typically drove their children to school.
"The traffic comes to a halt in Arthur St — I overlook it and it comes to a halt, because so many parents drop off their kids.
"And then they drive - about 2.45pm - and they sit there parked, with their smartphones, waiting for the kids.
"For the younger ones, it’s different, but for most of these kids, they’re able to get buses."
It was not only a more affordable option for families but was healthier for the children, she said.
Further, Mrs Angelo said cheaper fares for those under 25 might encourage students to consider housing outside the city centre.
New Zealand Tramways Union Whakakotahitanga Taramu national president Gary Froggat said he supported the initiatives.
The union hoped children would be encouraged to tag on and off buses using registered electronic cards, so their journeys were recorded for their safety and security.
The 13- to 24-year-old passengers who would continue to receive a half-price fare should also be encouraged to use Bee Cards, because cashless travel reduced disputes and violence towards drivers, he said.
The Otago Regional Council reserved comment yesterday.
"ORC is yet to assess and consider the detail of today’s budget for public transport in Dunedin and Queenstown; however we are cautiously optimistic following the Government’s announcements today," chairwoman Gretchen Robertson said.
The Government said the new fares would take effect on July 1.
It also said the half price fares for under 25-year-olds would also be extended to Community Service Card holders and Total Mobility Users, and in total would help over 1.6 million New Zealanders save money when they got to where they needed to go.
Green Party transport spokeswoman Julie Anne Genter said she supported the fare reductions for children, but urged the Government to support free travel for all under 18s, students, and apprentices.
"Affordable bus and train travel for young and low income people has been a core campaign priority for the Green Party for over 10 years.
"We urge the Government to go further and make half price public transport permanent for everyone," she said.
