by Kok Ming Cheang

The unhappy response from our cabbies to the 100% hike in diesel tax with immediate effect, underlines the sour feelings of the general public to Finance Minister Heng Swee Keat’s Budget 2019 announcement in Parliament on February 18.

The sudden diesel tax hike was like a big bombshell had fallen on the taxi-drivers’ community.

For the taxi drivers, the pain seems to be particularly sharp and unbearable.

In an article by The Straits Times (ST), Cabby Henry Tay said, “his running costs will likely rise by $4 to $5 a day and the rebate taxi firms will pass on to drivers will not be sufficient.”

Tay’s remark was enlightening: “You give me a deep cut, and then pass me some candy for the pain.”

This aptly describes how the Finance Minister (even before Mr Heng) has been practising when comes to introducing higher or new taxes and levies. Bits and pieces of subsidies and rebates for limited duration were dished out to help citizens tie over the initial period of hardship but they are left carrying the unwanted baby for a long time to come.

Ask any man in the street and he will tell you that a tax hike from 10 cents to 20 cents per litre on diesel price will invariably add to business cost for all sectors of the economy and push up cost of living.

The people who finally bear the brunt of the diesel tax increase will be those at the end of the food-chain – the taxi drivers, transport operators of commercial vehicles and consumers.

The chairman of motor group Prime, Mr Neo Nam Heng confirmed the dilemma taxi drivers will face with the diesel tax hike: “The tax hike will be felt most keenly by cabbies, the impact is quite great, and that two-shift drivers will see their daily cost rising by as much as $6 a day, versus around $2 in refund from the company.”

As usual, the government deploys ST to put out a good narrative.

In an article written by Christopher Tan, Senior Transport Correspondent of ST titled ‘Diesel duty hike’s impact on public transport fares expected to be minimal‘ by quoting Associate Prof Walter Theseira from the Singapore University of Social Sciences and an NMP in the present Parliament. His opinion is based on the fact that “the excise duty hike is less than 10% of retail diesel prices and the energy index is only 10% of the fare formula.”

Further, “the energy is split between electricity prices and diesel cost, and this further dilutes the impact of the increase in duty.” Thus there is little risk of pushing up transport fares.

Christopher Tan’s second article avoided the gripes of the cabbies on the diesel tax hike.

A 10-cent hike in duty translates to revenue of $30 million a year base 300 million litres of diesel consumption in 2017, a fall from around 360 million litres in 2013. It is going to be a big extraction of money from the taxi drivers and business operators of diesel-driven vehicles. This cannot be denied.

Let me bring readers back to 2015 when the then Finance Minister and DPM Tharman suddenly introduced a petrol hike of 40% on petrol pump prices, at a time when oil prices were falling globally. This decision denied all motorists the benefit of falling oil prices and petrol pump prices etched up.

The fanciful justification given by Mr Tharman was “to encourage less car usage and reduce carbon emission. That petrol hike yielded $177 million a year in additional revenue in exchange for a one-time road tax rebates for motorists and motorcyclists.

This time in 2019, the rationale for the diesel tax hike is to combat air pollution. Diesel cars on the roads are bad for our health. The senior parliamentary secretary for transport Mr Baey Yam Keng said: “While the tax hike on diesel has affected businesses and cabbies, the move will help discourage usage of fuel and create a better and healthier living environment.”

To curb air pollution, the obvious solution is to control and reduce the growth of the car population.

Since the introduction of COEs in 1990, the car population really didn’t decrease much until recently and hence, severe traffic congestions along CTE and other express ways, is a common sight and a daily experience for all motorists.

If diesel vehicles are unhealthy for our living environment, the Ministry of Transport could have restricted the import of such types of vehicles a long time ago instead of slapping on a 100% diesel tax suddenly. Where is the forward thinking and planning ability of our finance ministers?

In Parliament’s present session when the the diesel tax hike was raised, Mr Ang Hin Kee (MP for AMK GRC) who is the National Taxi Association (NTA) Advisor was reported to say after the sitting “that he hoped more taxi firms would take up Mr Baey’s call to support cabbies.”

He did not ask any questions or raise any objections to the diesel tax hike which cabbies would expect him to do (or at least there was no ST report of him speaking up for the cabbies in Parliament).

What is the purpose of appointing a PAP MP as Advisor to NTA if he does not speak up for the cabbies in Parliament?

In the same vein, a new association, the National Private Hire Vehicles Association has been set up with NTUC’s assistance and also headed by Mr Ang Hin Kee. With Mr Ang in control of both associations, NTUC, has full control of this employment sector.

By now, the citizenry knows too well that often, the rationales put forward by the Finance Minister to justify higher levies or new taxes are not the real reasons. If the country is in real need for more revenue for any meaningful community projects, the citizens would support wholeheartedly like in the early era of PAP rule.

But not now, because there is a total lost of trust and faith in the rationales or justifications put up by the Finance Minister. When the justifications did not meet reality, like the COEs did not improve the traffic situations because car population was not systematically reduced since 1990, no Finance Ministry official has ever given an explanation.

In 2018, a surplus of $9.6 billion is expected. Yet, the citizens are expected to contribute even more to the government coffers.

Carbon taxes are going to kick in this year and all businesses and HDB households are likely to be impacted. The government will rip the citizenry of nearly $1 billion from carbon tax for the first five years.

The hard truth: as the citizens are all fixed with the burden of higher taxes over the long term and a spiraling cost of living in Singapore, the PAP ministers continue to call for their support and trust in their ability and foresight to plan and prepare the country for the future.


This post was first published at Kok Ming Cheang’s Facebook page and reproduced with permission.

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