PUB makes profits thanks to govt grants: Illogical?

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By: Leong Sze Hian

PUB makes a profit thanks only to govt grants

I refer to the article “PUB makes a profit thanks only to govt grants: Maliki” (Straits Times, Feb 27).

$160m profit, $200m govt grants last year

It states that “National water agency PUB made a profit of more than $160 million last year only because it received about $200 million in grants.

Without the government grants, PUB would have been operating at a deficit, said Senior Minister of State for Defence and Foreign Affairs Maliki Osman yesterday.

The East Coast GRC MP was responding to a participant who asked about PUB’s profitability at a post-Budget dialogue with about 100 Malay residents.

On Friday, socio-political site States Times Review published an article stating that PUB is going ahead with a 30 per cent increase in water prices despite posting a profit of $166 million last year.”

Without grants – Budget surplus will be very large?

If the Government did not give grants and subsidies for all kinds of things – the Budget surplus would be much higher.

$5.2b surplus, $10.6b grants, subventions & capital injections?

For example, the Budget surplus for FY2016 is $5.2 billion. The “Grants, Subventions & Capital Injections to Organisations” is $10.6 billion.

If not for grants – surplus more than $10b?

If the amount that is for grants and subsidies is just say about half the sum ($5.3 billion) – the Budget surplus may be more than $10 billion ($5.2 + $5.3 billion), without grants and subsidies.

Helps to make already very high surpluses appear lower?

The Government may already be having some difficulty to explain amidst criticism as to why it continues to have such large surpluses in about nine out of very 10 years or so?

So, the grants and subsidies may help to arguably, make the surpluses look lower.

Despite so many grants, subsidies – most expensive city?

Why is it that despite so many grants and subsidies for so many things, the prices of so many things keep going up – and Singapore is the most expensive city in the world, according to The Economist?

Increase PUB grant so that no need to increase water price?

Why not increase the grant to PUB such that there is no need to increase the price of water?

Profits exceed grants?

By the way, by how much did the total profits exceed the total grants in the last 53 years, since the founding of the PUB?

Public services’ gross price more than private sector?

As to “But Dr Maliki told residents the profit must be seen in the context of the subsidy that PUB received from the Government” – the gross price (before subsidies subject to eligibility) of many public services (such as dental) may arguably, already cost more than the private sector.

Subsidies: Really?

So, is the subsidy reflected in the bill – really a subsidy?

The logic of 1,000 litres of water to make 5,000 cups of coffee?

With regard to “Dr Maliki yesterday explained to residents that 1,000 litres of water are now sold at $2.15. With the hike, the price will go up to $2.74.

Water is not just used to make coffee?

Assuming that amount of water can make 5,000 cups of coffee, the increase in price for one cup of coffee would work out to be a fraction of a cent” – this may be a flawed argument because water is not just used to make coffee – it has to be used by businesses in many areas – such as the washing of the cups, saucers and spoons, etc for coffee, washing the premises, flushing the toilets, making everything else that is being sold, etc.

“If the establishments can justify the (price) increase … “?

As to “He told residents that the authorities cannot stop coffee shops and hawker centres from raising prices, if the establishments can justify the increase … But the price increase should not be solely due to the hike in water prices, he said” – since the Government has not disclosed historical and projected costs, revenues and profits’ figures to justify the subject water price increase – how does it expect ordinary Singaporeans to figure out “if the establishments can justify the increase”?

Report businesses that can’t justify price increase?

With regard to “He also urged residents to inform the authorities if they find cases of unjustified price increases” – what will the Government do when residents report unjustified price increases, and what has the Government done in this regard in the past?