By Ng E-Jay
The Public Transport Council (PTC) said on Wednesday that it has decided on an overall fare increase of 2.8 per cent. However, it could not explain adequately why the fare increase has to take place despite a 60% plunge in the price of oil from its peak. Its reasons for the fare increase are dubious and illogical.
The PTC said that this year’s fare review exercise was based on 2013 figures, using changes in consumer price index, average wage and energy index from that year. Also, part of 2014’s fare increase was held back to prevent too big a hike. The line of reasoning therefore is that the part of the fare increase that was held back in 2014 is thus carried over into 2015.
However, this is illogical. Policy decisions must be made on updated data whenever possible. The fare increase that was held back in 2014 should not be carried over into 2015 because the price of oil has fallen drastically. It is senseless to implement the full increase originally meant for 2014 in the light of the new developments.
Even if fare review exercises are primarily conducted using past data rather than forecast data, it is illogical to ignore the latest statistics, because the current year’s profit experienced by the transport companies would be a function of the current price levels, and not previous price levels.
In rubber-stamping fare hikes proposed by transport companies, the PTC also claims that fares need to increase in order to cover operating costs. However, the public transport companies are making record profits every year. The net result is that the fare hikes have ensured that record profits continue, and not merely that costs have been covered.
As can be seen therefore, the PTC is looking after the continued prosperity of the public transport companies at the expense of commuters.
Transport minister Lui Tuck Yew said in a Facebook post on Wednesday evening that he was pleased to note that some 1.1 million commuters will be unaffected by the fare increment. However, he failed to mention that the rest of the 4 million people in Singapore would be affected. Perhaps he would like to elaborate why the rest of the 4 million people have to pay higher fares to ensure that transport companies continue to make higher and higher profits every year.
Our public transport companies are majority-owned by Temasek Holdings and GIC. These are the two entities that benefit from the record profits and millions of dollars of dividend payouts made by the transport companies. However, Temasek Holdings and GIC don’t return the accrued investment returns to Singaporeans.
So essentially, Singaporeans are paying more and more each year to make our sovereign wealth funds rich, whilst in return for their generous contributions to state coffers, the CPF Board only returns to Singaporeans a very meager 2.5% interest rate on their CPF OA account.
Thus, the public is being made to feed state coffers and our sovereign wealth funds, but are given nothing more than random scraps in return.
This article was first published at sgpolitics.net and is an exclusive republication for TOC.