I refer to the Budget speech that was delivered in Parliament on 20 February on the increase of price for water in Singapore.
Increase by 30% in 2 phases
Finance Minister Heng Swee Keat said on Monday (20 Feb 20) that water prices will increase for the first time in 17 years since 2000.
Including taxes, the prices will go up by 30 per cent in two phases. The first hike will be from 1 July this year, and the second from 1July next year.
He stated that lower and middle income households will receive help to manage the increase in water pricing.
I watched the entire Budget speech live on Channel NewsAsia.
No projected increase in revenue?
Mr Heng said in the 2017 Budget 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 price increase will go towards maintaining Singapore’s water infrastructure, and more expensive sources of water such as desalination.
Although Mr Heng highlighted that the cost of processing the water is increasing, there was no mention of what is the projected increase in revenue from the 30 per cent increase in water prices.
No increased costs’ figure to justify the increase?
He said that Singapore has invested in desalination and Newater plants which are “costly but necessary” investments, but there was also no mention of what the increased costs’ figure is – to justify the price increase.
Mr Heng pointed out that the increase will be less than $25 per month for three-quarters of businesses, and less than $18 for three quarters of households.
After subsidies, 75 per cent of HDB households should see an increase of less than $12 a month in their water bills.
He said that households in one-room and two-room flats will not see any increase in their bills as they will be receiving U-Save rebates of up to $380 for the year, an increase of $120 from $260. Three-room flat households will get a $100 U-Save rebate increase, four-room flats $80 and five-room flats $60.
$71m rebates to help you pay for the increase?
It was also said that the executive and multi-generational flat households will get $40 more. These increases are permanent and will cost an additional $71 million a year. About 880,000 HDB households will benefit.
So we know for sure that the permanent U-Save rebate increase will cost the Government “$71 million a year.
No revenue, no costs, but got rebates’ figure?
So, there was no revenue figure, no costs figure (to justify the increase), but there was a figure as to how much more it would cost the Government to give the rebate increase (to help offset the price increase).
As an analogy, it may be akin to telling you that I need to charge you more because it cost me more, but I will help you by giving you a rebate – but I never tell you how much more I will receive from the price increase or how much more it is costing me – but I can tell you how much more it will cost me to give you the rebate.
A strange way to deliver a Budget?
Don’t you find that this may be a rather strange way to deliver a Budget? What do you think?
S’pore cost 14 times more than Hong Kong?
So, does it mean that the cost of 15 cubic m of water a month in Singapore after the 30 per cent price increase announced today – may have increased even further to about 14 times Hong Kong’s and nine times Taiwan’s? (“Water: S’pore cost 10 times more than Hong Kong?“, 8 Feb)
Businesses pass on the price increase?
In the final analysis, will the increase in water prices be passed on to consumers by businesses?