Public transport fares are about to rise by nearly 50% within two months, and the Ministry of Transport has obtained an extraordinary budget to advertise the changes. At the end of this month, the automatic update of public transport fares, which are linked to the index of public transport inputs, will come into force. The index is made up of various costs, such as fuel, drivers’ wages, and insurance. According to government sources, the rise in urban fares will be about NIS 0.50. This is after fares jumped from NIS to NIS 8 in April. Before Miri Regev became minister of transport, the fare was NIS 5.50.
The dramatic rise in fares since April is the result of a deal between the Ministry of Finance and the Ministry of Transport, arrived at in the 2025 budget discussions, whereby, although the budget was a contractionary one requiring across the board cuts in government programs, there would be no cuts in infrastructure projects of the Ministry of Transport, and there would even be additional budgets for various initiatives, such as the planning of a Metronit (bus rapid transit system) for central Israel, and the light rail red line to Rishon LeZion.
In addition, Regev would be allowed to fulfil her promise of the second stage of the reform she devised when she took up her post (a reform severely criticized by the Ministry of Finance), under which fare discounts would be given to people living in neighborhoods classed as socio-economic groups 1-5, mainly haredi and Arab neighborhoods, and free travel would be granted to pensioners.
In return, Regev was required to agree to a substantial rise in public transport fares, by about 30%, in addition to the previous rise, as mentioned, and to the rise expected at the end of this month, making it a rise of about 50% altogether.
In order to convey to the public the benefits of the reform, the Ministry of Transport obtained an extraordinary budget of NIS 40 million for 2025-2026 to market its activity. The furor that has arisen in the past few days over payment to influencers on social networks is just the tip of the iceberg. In a time of war, when government budgets are being cut on every side, the two ministries agreed on an exceptionally high budget to publicize and sell the transport reform.
It’s true that the budget should provide important information to the public, and the use of social network influencers is part of a general trend in the advertising world, and if the campaign is carried out trough the government advertising bureau and in accordance with the rules, there isn’t necessarily anything wrong with it. But for the sake of comparison, a fares reform took place under the previous government as well, and that reform brought in NIS 300 million to the state, but the advertising budget was limited to up to 5% of the revenue, that is, a maximum of NIS 15 million.
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NIS 40 million for advertising and marketing as agreed in the budget negotiations between the Ministry of Transport and the Ministry of Finance is unusual, according to government sources. Such a budget would be sufficient to pave eight kilometers of cycle paths, enough for a medium-size city in Israel such as Bat Yam or Ofakim.
The government explained the rise in public transport fares in Israel in part by the fact that fares in other OECD countries are much higher. But it should be recalled that in those countries the state provides infrastructure for reliable and fast travel. Israel is still behind in that respect. Surveys around the world show that price does not make people switch from private cars to public transport. What does work is convenience, reliability, frequency, and speed.
Published by Globes, Israel business news – en.globes.co.il – on June 10, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
