A new public transport review by the Productivity Commission has shown Canberra ranks near the bottom in terms of ticket sales covering a proportion of total operating costs.

According to ACT transport ticket sales covered 7.7 per cent of total operations for the 2021 financial year, dropping from 9.8 per cent in the prior year.

The report also details increased concessions to incentivise public transport use beyond the pandemic could hinder the cost efficiency of transport networks and rely more heavily on government investment to prop up commuting systems.

Productivity Commission chair Michael Brennan said pricing has been "ad hoc" and fares are not keeping up with the increasing costs of public transport.

"Fares have not been particularly equitable or efficient, and have not kept pace even with the recurrent costs of running our public transport systems," Mr Brennan said.

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"That has put service quality and frequency at risk, and these are the things that matter most to the users of the system."

Usage of public transport has dramatically fallen since the start of the pandemic with the Productivity Commission claiming costs were already outpacing real-time growth in ticket prices.

Mr Brennan flagged increased subsidies are inevitable but are not effective in reducing road congestion, suggesting lower fares for buses compared to trams and trains need to be installed to better reflect the cost of operation.

"Government subsidies for public transport are inevitable, and justified up to a point," he said.

"But more thought could be given to higher peak fares, shorter peak periods and differential pricing by transport mode."

The report showed pricing in real terms has not grown in the last 25 years.

It also suggested free public transport would not improve the productivity of transport systems and passenger not returning to pre-pandemic levels would impede future road congestion levels.

"It would have only a small impact on public transport use, and even less impact on road congestion; it would not necessarily benefit those most in need but would come at a huge cost to state budgets," Commissioner Paul Lindwall said.

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