In our Australian society we believe that the people who receive the benefit of any measure should be the ones who pay for it. Who receives the benefit from improvements in public transport?

1. Obviously commuters are going to benefit. However, to for fare revenue to yield enough money to pay for major investments to the system would make ticket prices forbiddingly high.
2. Motorists will benefit - the freeway will be less congested because more people will be able to take the public transport. So a small tax on petrol is also fair. This will also act as a deterrent tax, to alert people to the environmental consequences of driving.
3. The environment will benefit the most - public transport causes a lot less pollution than cars, especially if you look at the whole picture which includes transporting the fuel from the refinery to the petrol station. The environment doesn't have money of its own, but all levels of government have programs to help build an environmentally sustainable society. Public transport investment is a valid use of that money.
4. The people of the future will benefit - lack of investment now would lead to gridlocks which would cost Melbourne dearly over the next few decades. Therefore it's right for the governments to borrow money to build infrastructure, because then the next generation, which will be reaping the benefits, will also pay the bills (via their taxes).

Federal funding

Some people have called for the Federal government to contribute to the funding of public transport. Smart Passengers sees this as potentially very beneficial, but also potentially dangerous. Unless strict guidelines are made as to which level of government is responsible for which improvements, they could both end up investing very little and hoping the other would do it instead.

We might (for instance) continue to have the state government responsible for operating costs plus all improvements to existing infrastructure, and bring in Federal money for the construction of new lines (such as to Doncaster and Rowville).

According to the Australian Constitution, the Federal government has the responsibility - up to the point of being able to override state government decisions - over certain specific areas including environmental matters. The provision of a high capacity public transport corridoor into a highly populated area of Melbourne which is currently served only very poorly is a prime candidate for this responsibility to be exercised.