SINGAPORE: Speaking at the National Trades Union Congress’ national delegates’ conference on Wednesday (Nov 22), Prime Minister Lee Hsien Loong said that the government cannot completely avoid raising the prices of some essential public services.

He attributed the unavoidable price hikes to slow growth and high inflation and said that the government still strives to keep overall costs low. However, PM Lee added: “If they are not essential, we can delay them for a while longer, or at least moderate the immediate increase”.

In September this year, the Singapore regulator for public transport fares, the PTC, announced an overall fare increase of 7 per cent following the annual fare review exercise. The fare hikes will take effect on Dec 23. The latest increases are more than double last year’s hike, which saw a 4 to 5-cent increase per journey. The government will absorb two-thirds of what the increase should be, a move that will cost S$300 million this year alone, he said. “But some price increases will not be avoidable. Pushing them off to the future doesn’t solve the problem,” said PM Lee.

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PM Lee added that the government has also avoided putting the whole burden of public services on taxpayers, only requiring users to pay “reasonable charges” to use these services. He said that at the same time, it requires the operations to break even, to put pressure on operators to run efficiently and keep costs down. “This translates to cost savings for Singaporeans,” said PM Lee. He also addressed the view that public service operators should not aim to earn a profit at all. This would be the wrong approach, he said, as it does not incentivise operators to run these services efficiently. “It is better to let them earn a reasonable profit so that they have the resources to reinvest to improve services and the incentive to do so,” PM Lee added.

“Overall, this approach has worked well,” said PM Lee, and this strategy has moderated the cost of living for all households. But for those who still need extra help, the government has provided targeted and direct assistance in the form of cash or vouchers. “This is much better than subsidising water or electricity across the board, as some countries do,” he said.

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The latest bus and train fare increases will see adult commuters paying 10 to 11 cents more per journey, the Public Transport Council (PTC) said on Sept 18. In a press conference on Monday, PTC chair Janet Ang said that the council had decided not to grant the full allowable fare adjustment of 22.6 per cent to keep public transport fares affordable in the higher cost environment, fueled by core inflation, strong wage growth, and a hike in energy prices.

She said that the 7 per cent increase means that the remaining 15.6 per cent will be deferred to future fare review exercises. This was also confirmed by PTC chief executive Tan Kim Hong, who said “Yes” when asked if the rolled-over numbers indicated more fare hikes in the next few years. “If we had done the full maximum allowable fare increase of 22.6 per cent, it will translate to about 30 cents per journey for all commuters”, Mr Tan said. /TISG

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