Andrew Barr said the ACT government could explore expanding transport concessions

The ACT Council of Social Service has urged the government to consider a trial of free transport in its annual cost of living report, which found the territory was facing its worst cost-of-living crisis in 20 years.

Chief Minister Andrew Barr said free public transport would benefit people who have a capacity to pay and the government would prefer a more targeted program.

"I think an obvious question around free public transport that most of the benefit of that would go to people who clearly have the capacity to pay so a more targeted program would be what sort of transport concessions we offer," he said.

"Do we need to extend the eligibility for those concessions or do we need to make those concessions themselves larger."

ACTCOSS chief executive Devin Bowles said he believed a trial of free public transport would expose more Canberrans to its benefits.

"If it's free it will help people ease away from having a car or having two cars in their house," he said.

But Dr Bowles also said it would allow more people to access community services.

"They may not have cars and may not be able to afford public transport very easily right now and free public transport is an injection, a boost to the whole of the community sector by making it more accessible to people who most need it," he said.

The council also recommended the government consider income-based fines and government fees. Mr Barr said the government could explore it but it came with risks and challenges.

"There are a lot of people who earn a little bit of money, middle-income earners, for whom 1 per cent of their income, for example, would be a very large fine and it could have a very significant impact on their capacity," he said.

"You wouldn't want to just stumble into that by way of pursuing what sounds like a good idea but in practice could be really hard for many households."

The government is expected to deliver a cost-of-living package when it hands down the ACT budget on June 27.

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Mr Barr said the government was examining who was eligible for government concessions. He said the government was focused on housing and utility costs.

"From a policy perspective the big challenge is we could have 1000 tiny programs that all add up to delivering a certain amount of extra money to low-income households or we can have a smaller number of programs that deliver a larger amount of money," he said.

"Efficiency probably says go with the latter: a smaller number of programs that deliver more in and of themselves."

The ACTCOSS report made 35 recommendations around a range of issues including housing, community sector funding and health care.

Dr Bowles said housing and community sector funding were key issues.

"If I had to pick just a few I would focus on addressing the housing issue [and] I would also focus on supporting the community sector that is supporting the community as a whole," he said.

"A priority is going to be expanding concessions particularly for people in the first and second income quintile."

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