The government rejected a recommendation to return privately-owned bus lines in Sydney and Newcastle to public hands, saying putting routes out to tender allowed them to invest in other services.
It comes after a parliamentary upper house inquiry into the privatisation of bus services handed down its recommendations in September, urging the government to consider returning bus routes to public hands.
In the scathing report, the transport committee said privatisation of the state's bus services had been an "absolute disaster" that had let down the community and workers.
But the government said operators in Sydney and Newcastle were offering services beyond the "one-size-fits-all model of service delivery", including high-capacity routes in some areas and on-demand travel in others.
"Sydney metropolitan customers have been able to benefit from improvements in bus services using leading technologies and service offerings seen in other major global cities, such as Singapore," the government said in its response, tabled last week.
In Newcastle the network continued to deliver "harmonised timetables and additional services that provide better connectivity".
While customer satisfaction had not improved for Newcastle bus services, the government noted feedback was taken while the network was being overhauled during the COVID-19 pandemic.
A call for the implementation of an industry-wide enterprise agreement for all bus businesses, developed with the unions, was rejected by the government, along with mandated minimum pay and working conditions.
The government said it did not think it was necessary to introducing a multi-industry employment agreement to ensure good employment outcomes.
The government supported in principle the report's other recommendations, which were mainly concerned with fair accessibility to buses.
Labor's transport spokeswoman Jo Haylen said privatisation had been a policy failure.
"They've ignored the countless submissions from councils, workers and community members and don't have a plan to fix the underlying issues that have caused routes to be cut and stops to be closed," Ms Haylen told AAP on Tuesday.
Committee chair and Greens MP Abigail Boyd wrote in September there had been "a continual degradation of services following privatisation and workers and the community are furious".
The harms of privatisation were most obvious for public transport transport, because its value extended beyond profit-making.
The committee found selling off the routes had led to fewer services, longer travel times and worse experiences for workers.
The government's committee members dismissed the report as a "political document" in a dissenting statement.
