Friday, September 12, 2008 9:44
Fare increase not fair to lower income
In Main Stories, Top Story, Uncle Leong, Uniquely Spore • 1,587 views • 24 Comments
Leong Sze Hian / Columnist
PTC should use median wage and not average wage in fare formula
In its press release of 10th July 2008, the Public Transport Council (PTC) said that, based on its new fare pricing formula, the increase in the cap on fares will be three per cent this year.? A few days after that, on 14th July 2008, PTC Chairman Gerard Ee told the press that fare hikes were likely to be under 1.8 per cent or even under 1 per cent.
If the PTC knew that the fare hike was likely to be under 1.8 or even under 1 per cent, why did it not say so, in its original press release?
How did it now derive a fare increase of under 1.8 or 1 per cent that was different from its original cap of 3 per cent? Did the new formula change in just four days?
Moreover, since the transport operators had not even submitted their fare increase applications by 14th July 2008, how did the PTC know in advance that the increase will be under 1.8 or 1 per cent?
Lower-income groups hardest hit
It is the lower-income groups who are likely to use feeder bus services, as they may just want the cheapest way to get to the nearest supermarket, polyclinic, etc.
Charging more for direct bus services may also hurt lower-income groups more as they generally prefer direct services because they are more concerned with cost rather than time (i.e., cheaper costs of using direct bus services rather than potentially quicker travel time by transferring to the MRT).
Furthermore, if the ‘cost burden’ of the transport operators’ loss in revenue due to the PTC’s proposed increase in the transfer rebate has to be shared, perhaps the Government should shoulder part of it.
The Government has ample resources to do so.? The revenue from motor vehicle taxes and excise duties (such as those on petroleum products and motor vehicles) increased from $2.3 billion in FY 2005 to $3 billion in FY 2007.? This is an increase of 30 per cent, or about 14 per cent per annum.
Record wage growth?
But have wages kept pace with fare hikes? I refer to the article Wage rise hits 7-year high in 2007(New Paper, 1st July 2008).
It says that wages rose last year by 5.9 per cent – a seven-year high, but after adjusting for inflation, the increase was 3.8 per cent.
If we consider that smaller companies generally pay less than bigger companies, or that the private sector pay is generally higher than in the public sector, then the average and median wage increase may be even lower.
Furthermore, since the number of part-time workers has more than doubled in the last decade or so and, according to the latest available statistics, their average wages have stagnated at about $500 a month, the wage growth for a significant portion of the working population may in fact be far lower.
Relentless growth in prices of necessities
Perhaps what is even more important is how much the prices of basic necessities like food, utilities, public transport, healthcare, and new HDB flats have increased, relative to median wage growth.
I estimate that about 30 per cent of all Singaporean workers have had no real increase in wages for the last 10 years or so, even with inflation now at 7.7 per cent over the last 13 months.
In comparison, a minister/senior permanent secretary?s remuneration was $968,000 in 2000. By 2007, it had grown to $1.9 million, an increase of about 96 per cent in 7 years, or an annual compounded increase of about 10 per cent per annum.
Fare hikes unfair to lower-income groups
Therefore the PTC’s fare increase formula may not be very fair to lower-income groups, as it is based on the average wage increase. Those who take public transport tend to have a lower wage increase than those who don’t, generally.
I suggest that the median wage, rather than the average wage, be used in the PTC’s pricing formula with a downward adjustment to reflect the lower-than-median wages of lower income groups.
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24 Comments
Yah Lor
Fact Check
1. Fare Increases & Median vs Average Wage
Any fare increase – even one brought about by rising energy prices worldwide – will hit poor people harder.
Mr Leong Sze Hian suggests using the median rather than average wage as yardstick — but on its own, his plan won’t help the lowest 10% to 20% enough.
The answer is targeted assistance — a lot like what the present Government is doing.
2. “3 percent” versus “likely to be under 1.8 or under 1 percent”
Estimates change — just as oil prices change.
I am sure that a financial services professional like Mr Leong is aware that estimates can change.
The Singapore Daily » Blog Archive » Daily SG: 12 Sep 2008
[...] ERPains, Trains & Automobiles – TOC: Fare increase not fair to lower income [...]
Sam
whenever the citizens voice their concern and unhappiness over all the price increase since the last GE, when has the authorities EVER relented and retract the increase in prices.?? NEVER… NEVER….. You wait till the cow come home, also NEVER….
We can tok and discuss and go to Hong Lim Park, still NEVER will PAP listen to you…. i will not be the 66.6% if i get the chance to VOTE.!
loop
The authorities has already collected quite alot from ERP & road charges. why can’t these be used to subsidise public transport fares? Why is there even a need to have GST for necessities? e.g rice, salt, sugar & cooking oil.
latecomer
Look now. Raising fares when basic service standards are not improving is already not fair. Rising inflation and unprecedented profits for operators mean double not fair. Having a govt-controlled non-independent regulator like PTC to approve fare hikes is triple not fair.
What more is there to say? All they are doing is just coming up with many patterns to confuse people.
PROPOSE MIN WAGE
I propose a law for the minimum wage.
How to do it?
Reference the many many min wage systems in the world and just amend to suit the local environment.
as long as there is no min wage, and influx comes in willing to work for less due to currency conversion power, there is basically no limit as to what is the min wage. I suspect when economy crash again, many will want to work for almost free due to intense foreign competition even for jobs like washing the urinals and pouring faeces or wash plates and stand at mc donalds.
All said and done, Sze Hian, the whole committee does not even have a common man who takes the transport day in day out in it!
How to have an accurate recommendation when your NTUC, PTC, SMRT, SBS, etc all are run by PAP MPs, ministers and their people?
It will never be fair because it’s profit driven, not a public service.
Kaffein
tiredsingaporean
4) Sam on September 12th, 2008 11.41 am whenever the citizens voice their concern and unhappiness over all the price increase since the last GE, when has the authorities EVER relented and retract the increase in prices.?? NEVER… NEVER….. You wait till the cow come home, also NEVER….
We can tok and discuss and go to Hong
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You are damn right about all these man. Since WHEN??? did they EVER consider the welfare of the citizens??? not that I know of anything ever since the last GE.
alky
Since when did the elites ever bother to treat the poor people fairly?
To them they are merely pawns to be sacrificed and exploited.
V S RAAJ
It is a pity though when there is price hike(service, commodity, taxes etc) which is the process of global economics, it hits and hurts the common man. Not to acknowledge these hikes, although hard to swallow, least digest, will be like hiding me behind an ‘iron’ curtain locking away from reality, an act of cowardice.
I am confident the government will address the woes of the common man, they always did and they will this time. The government has not let the poors down at any time, they are not going to do that now!!! Lets not play the fiddle now…wait ttill the ’show’ starts….it will end well!!!
Mr Tan
To Mr V S RAAJ, your comments are super hilarious! WHEN did the garmen EVER address the woes of the common men? Any examples?
They don even care 2 hood about the poor, what common men are we talking about here?
I really hope, like what you said, it WILL end well, and for the common men! I tot Jurong GRC will be the beginning, but it never happen. I am waiting for 2011 to come, and I hope your prophesy will come true.
why_1st_worlds_get_1st_world_pay_here_average_not_so?
1st of all, would you think I am not lying when I say you are earning 1st world salary like the European or American workers of comparable jobs?
If think you are not getting 1st world pay, living in 1st world ,
have you asked, why 1st worlds like Europe and USA and Japan can pay their people 1st world pay?
How long have you been avoiding this question ?
why_1st_worlds_get_1st_world_pay_here_average_not_so?
8) Kaffein on September 12th, 2008 2.49 pm
Maybe you are right. I had a look at their management team and ….
Which large company does not have a … in their team eg. Directors ….senirle management….?
What is the implication ?
I think absolutely ZERO conflict of interesting. But you have to believe me in order to make sense.
This is one subject I tired of talking about. Rather spend time writing and marketing my e-books to funny people in the USA who are willing to pay US47 for it. Helps me pay for the increased transport fares in Singapore.
Was excited with the earlier pronouncements by the Minister about a National Transport Plan. Unfortunately nothing is happening. II guess he is too young to fight with the directors of our transport companies who have entrenched politcal allies in the cabinet despite not being Ministers.
Just for records…some things I have said, which is probably supported by the other comments and postings
1. Transport companies must focus on people, not just profits and machines
2. At least SBS has done away with the inefficient double deckers(nice machines London style) after much public descry, despite defending its earlier decision. .Unfortunately did not exactly put out more services. The idea was to have smaller buses running more frequently? What happened????
3. Buses like MRTs are getting more crowded,,in fact stuffed. My 90 year old father is healthy and use to enjoy taking bus rides. These days he is frightened and is reticent to go out because of the crowd. No need to remind peole, more Singaporeans and aging.
Higher charges, less carrying capacity, higher utilization(more crowded)…managers and directors who make moneh onthis formula do not deserve any bonuses. A 6 year old playing Monopoly will know how to do this.
4. But like I say if someone has the power to make money for themselves, I am not complaining as long as they also provide improvement for the general public.
5. PTC must look into the performance formulas for directors and key managers of bus companies to get merit bonuses. How does service standards weigh in here. If every bus or public transport commuter has and additional idle waiting time of 3 minutes. What’s the social costs? or is the thinking…these are low class people…not worth much…let them wait!
6. Have the transport companies taken a survey of who rides buses. A good and increasing percentage are foreigner. I advance a suggestion sometime ago, differentiate bus cards between Singaporeans and non-Singaporeans. Give non-Singaporean a break.
7. Aged who are frail and disabled. I think we have to leave them out of the public transport equation. Quick! Someone start a charity to run some buses for old people. This can be done, these aged as not in hurry. They don’t really have fixed destination. They will go where its convenient!!!
In Conclusion.
1. Like they always say, in Singapore, you must keep making money…cannot become weak frail….Go hospital? better die. With the increase transport fares and coffee shop cost…Even go out will die!
2. If you want charity, join a Tsunami victim group. Unfortunately we have such equable weather here
3. On a serious survival note
a. Does any one have a book they want to market to the USA?
b. Any interest is starting a non-profit organization to run transport services
for the frail and weak…not yet amounting to disabled? Pretty big market?.
You can flame me and send your constructive suggestions at alexhyl@gmail.com.sg .
The Singapore Daily » Blog Archive » Weekly Roundup: Week 37
[...] TOC Transport Week – TOC: TOC’s Public Transport Week – with event at Hong Lim Park – TOC: PTW Week: The private public transport – TOC: PTW: From third world to first – Sgpolitics.net: SDP’s policy paper on Land Transport – TOC: PTW: Union leader and MP and also board member of transport company? – TOC: Fare increase not fair to lower income [...]
V S RAAJv
Hi MR.TAN…at least my comments were super hilarious to you…at least at the moment you are most frustrated, angry or boiling for the cause of the ‘poors’….
Please do not create a ‘bracket’ for the poors and push them out in obvillion…they are part of everything – part of you, me and whole society we live in. Stop tagging them or belittling them. They are do not stake handouts at every opportunity that comes by…though they have financial short-comings, with pride intact, they work hard and hard at it.
It takes few weaklings like you to spite basically at everything the government does….so you take magical lamp that light homes of the poor, rub it and hopefully expecting a ‘genie’ in face of an opposition but be assured the only thing you get from rubbing this magical light is fulfillment of your soaring ego!! Rest be assured that government will come back stronger in 2011…and thats for the betterment of Singapore!!!!
Daniel
V S RAAJv ,
can you send your comment to Lucky Tan too ? I’m sure Lucky Tan will appreciate your writing and even improve on it well enough to be published as a post on his site. Like you, Lucky Tan is a ‘pro’-government and you have a ally in him. He is one formidable folk to be with to promote pro-gov stand
http://singaporemind.blogspot.com/.
Or before sending your comment, send it to Molly Meek for proof read and to spot any potential errors and issues.
http://mollymeek.livejournal.com/
“Rest be assured that government will come back stronger in 2011…and thats for the betterment of Singapore!!!!”
Sure I believe that if it means Money=Economy Growth=Government
“I am confident the government will address the woes of the common man, they always did and they will this time.”
Me too very confident. Remember increase GST to help the poor ? Remember increase ERP gantries and charges to help business ? Just ask ChinaTown how effective and farsighted are our world-class ministers after ERP changes.
Now I get to enjoy ‘premium’ price on the same product after GST’s 40% increment. Thank to our government. Long live PAP !
Mr Tan
Dam, the garmen spies are everywhere! Becareful……..
Rob
Great Article, the government would be foolish to ignore some of the points raised in this article. Like the columnist, I agree that the government should be using the income earned from road taxes/ERP/other taxes to subsidize public transport.
However, I feel that our public transport system has improved alot since 10 years ago, the problem is that improvements are not keeping pace with the increase in population( 1 million foreigners and counting!), and while transport companies like SMRT are raking in RECORD profits, people in buses and trains find themselves squeezing like sardines every morning on the way to work. When the government refuses to regulate a monopoly, everyone suffers!
It’s a work in progress though! I still believe that our government is GREAT! Mr Tan, just because we support PAP doesn’t mean we are government spies! I love Singapore just like you and I want Singapore to become better for me and my children, I just don’t believe that voting for opposition party will change everything for the better.
Pie Kiah 69
> The authorities has already collected quite alot from ERP & road charges. why can’t these be used to subsidise public transport fares?
First, do you think public transportation should be fully subsidised? If not, then what do you think is a fair price?
> Why is there even a need to have GST for necessities? e.g rice, salt, sugar & cooking oil.
I think it’s a matter of choice for tax and social welfare implementation. The first way is to impose GST on everything then distribute necessities vouchers for the needy. The second way is to abolish both GST and subsidies on daily necessities. The latter has the disadvantage that lifting GST on a vaguely defined basket of goods may be have unexpected loopholes. Patching a vague and moving loopholes is seldom effective. For e.g., are instant noodles, curry spices, coconut milk, breakfast cereals, coffee, vegetables, premium rice, fast food, etc. considered necessities?
What we probably need is better communication of the decision-making process to the public. I’m sure the government has studied the alternatives and documented it. Why not put the reports in public?
Amused
“Why not put the reports in public?”
Erm, maybe because it is possible that they have not bothered to do any of the studies you’re so “sure” they had done?
V S RAAJ
Frankly I am no spy! for the matter for anyone! I am a Singaporean and have the right to write my mind and TOC provides that ideal platform…
I was never for the GST in the first place…Can you image we contribute towards growth of our country since independence…part of what it is today and we got to pay GST on almost everyting and visitors don’t! I took the GST implementation as another ‘economic sense’ for the country BUT I am totally against GST for necessity goods like rice, milk, sugar, cooking oil (basic domestic needs) and on public transport like the public buses and MRT! GST could be imposed on luxury goods like buiyng private homes, car above 1600cc or any single goods valued more than $999 etc.
I have some qualms on some of the rules of law here but no qualms about goverment in rule!!! We are in the right hands overall towards betterment in all aspects!!
Pie Kiah 69
> Erm, maybe because it is possible that they have not bothered to do any of the studies you’re so “sure” they had done?
This is problematic: the government thinks people are stupid, and the people think the government is corrupted.
Say 3% first, then reduce to 1.8% so people will think “Wah! PTC doing a good job of keeping fares low. The transport operators better not play-play cos PTC looking after commuters’ interests.” Also, percentage difference is 40% (1.2 / 3), same as GST increase from 5% to 7%, so people will feel compensated for the GST increase. All wayang lah!