Rural and regional students are missing classes in areas where buses have been neglected, despite the services serving millions of passengers each year.
A report from the NSW government's Bus Industry Taskforce released on Thursday recommends identifying fresh options to improve contract arrangements outside major cities.
It notes funding for bus infrastructure and service improvements is a fraction of the expected expenditure on heavy rail and metro services.
Buses are a forgotten mode of transport, attracting only two per cent of funding while carrying more than 40 per cent of passengers, Transport Minister Jo Haylen said on Thursday.
"They are the heavy lifters of public transport that have been neglected," she said.
Ms Haylen said the government accepted the task-force recommendations and she had asked Transport for NSW to develop a long-term plan, which had been lacking for more than a decade.
But opposition transport spokeswoman Natalie Ward called the report a “204-page press release” and criticised the government for not announcing funding to support recommendations for billions of dollars in spending.
The task force called for a statewide plan, including preliminary service upgrades at a cost of $645 million a year, on top of more than $3 billion in capital costs for infrastructure to give buses priority and provide depots and electric services.
The report recommends $194 million of recurrent operational funding for Sydney services over the next three years and $60 million for regional and outer metropolitan areas among other sought injections.
“I want to see the commitment to the funding that's recommended by their own experts,” Ms Ward said.
The funding should be provided in the short-term for “high-priority service improvements to repair the neglect in funding over the past decade", the report said.
Asked if a lack of funding was a legacy of the former coalition government, Ms Ward criticised the "absolute fortune" paid to task force chair John Lee and added that Labor needed to "step up and actually take some action".
Ms Haylen said there will be funding in the budget in June.
"We're working through making sure that we do make these investments," she said.
The outsourcing of services meant the government was not in a good position to hold operators accountable for buses' maintenance and operation, the report said, recommending a team to manage buses and related assets over their life cycle.
Association of Independent Schools NSW chief executive Margery Evans said services in many areas remained inadequate despite increases in private-school students in regional areas since 2012.
Outdated timetables meant some children were arriving late and leaving early, missing up to five hours of in-class learning per week.
“Aligning bus timetables to school start and finish times, together with shorter travel times, would help reduce the educational inequity," she said.
The report noted the education department and non-government school leaders agreed the problems with school bus services were more acute in regional areas.
A final report from the task force is due in May.
