Finance Minister, Heng Swee Keat said in the Budget 2017 speech in Parliament, “Water prices were last revised in 2000, almost 20 years ago. We need to update our water prices to reflect the latest costs of water supply,”
He noted that the water prices including taxes, will go up by 30 per cent in two phases. The first hike will be from 1 July this year, and the second from 1 July next year. Highlighting that the price increase will go towards maintaining Singapore’s water infrastructure, and more expensive sources of water such as desalination.
So just 30% increase?
price increase
But if one were to look at the projection of price increase, one should note that apart from the increase of tariff on water, the Water Conservation Tax also increased by 20% and 15% for usage under and beyond 40 cubic metre.
The Waterborne Fee has been adjusted up 228% increase with the removal of the Sanitary Appliance Fee.
These increases were clearly not mentioned in Mr Heng’s speech, he merely emphasised that the water prices will be increased 30%.
So when TOC wrote to PUB to seek more clarification on the increase earlier this week, it wrote back stating, “Potable Water Tariff, Water Conservation Tax and Waterborne fee will go up in two steps, in Jul 2017 and in Jul 2018.  Do visit our website for more details on the water price revision and find out more on how you can save water.
In PUB’s further clarification to TOC’s query, it stated that for households who use less than 40m3, the Water Conservation Tax (WCT) currently at 30% of water tariff will go up to 50% in July 2018.  The WCT for water usage beyond 40m3, will be raised from the current 45% to 65% in July 2018.
The 30% as mentioned in the Finance Minister’s speech refers to the final price of water (which comprises Water Tariff, WCT and Waterborne Fee), i.e. ($2.74 – $2.10)/$2.10 = 30%.
The disproportionate increase of water prices
So now, what some may not realise is that while Mr Heng said in his speech that the price will be a 30% increase by 2018, the increase may not be that simple as what Mainstream Media and Government have been trying to make it sound.
Why is the projected increase not a flat rate of 30% as what the Finance Minister put it to be?
If one were to look at the costing, one will notice that the Sanitary Appliance Fee is a fixed cost based on how many toilet fittings that a residence has. The new pricing schedule removes this fixed cost and absorbs it into the Waterborne fee. What was previously $0.28 per cubic metre is now $0.92.
edit house increase water
So if we put the water usage of a residence, say a four room flat that has two toilets and project the cost based on the water it uses. We can see that the 30% price increase only applies to those who use between 15,000 to 20,000 cubic metres. Families with a large number of family members will expect to see an increase of 30%-40% increase in general usage.
Commercial food production/ hawkers hit with higher increase
Commercial food producers and hawkers who use a larger volume of water in their work will be hit with a higher increase in water prices. What they are looking at is not a 30% increase in water price but an increase of 40-50% or maybe more.
Note – Non-domestic water users are not charged at two different tiers. Regardless of how much they use, they will be charged at a same rate.
hawker increase chartOf course, the increase experienced by the business in terms of water may vary from industry to industry. A baker might use lesser water than what a soya bean drink producer does.
Hawkers that TOC spoke with, have voiced their displeasure over the increase.

“There is nothing people can do about it. If hawker increase price. People at most boycott, don’t eat. But we cannot boycott water and don’t use.”
“Like everything also increasing..now water is something that all commercial industry uses.” And said that 30% is crazy. Asking that if their product suddenly increase 30% in pricing, what will people think.

But will companies increase the prices of the products to reflect the increase? 
We all know that when the GST increased from 5% to 7%, the increase in goods were not a mere 2% increase.
Senior Minister of State for Finance and Law Indranee Rajah at a post-budget forum organised by REACH on Thursday, addressed the trickle-down effect that the water price increase would have on the cost of other goods such as coffee and tea,  stressing that the cost of such goods “should not and ought not” go up.
She noted that, currently, firms are charged $2.15 per cubic metre for the portable water that they use, and after the full water price hike kicks in next year, this will go up to $2.74 cents, an increase of 59 cents. This, she added, would have very minimal impact on the price of coffee and tea.
But we see from the calculations above, this is far from what Ms Indranee is claiming to be. So how can consumers be assured that prices will not be increased when the policy makers are not aware of the impact that their policies are making?
Interested readers can download the excel sheet to calculate the increase your home will be subjected to.
The calculation takes the current value of the water price and number of toilets in your home to derive the value of what you will be charged now and what you will be charged by July 2018. Take note, it does not take into account the 7% GST that water is subjected to.

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