Service and Conservancy charges: More rebates + Increase = Pay $71m more?

By: Leong Sze Hian

$120m S&CC rebates

I refer to the article “$120 million Service and Conservancy Charges rebates for 880,000 HDB households in 2017”.

It states that “The Ministry of Finance announced on Thursday (30 Mar) around 880,000 Singaporean HDB households can expect to receive $120 million worth of Service & Conservancy Charges (S&CC) rebates in 2017. Residents can expect to get their debates from 1 April 2017.

The S&CC rebate was announced during Budget 2017 to provide additional support to households.”

$30m more rebates?

As to “In 2016, $86 million worth of S&CC rebates was given to around 840,000 HDB flats” – does it mean that the increase this year after accounting for the increase of 40,000 households (880,000 – 840,000) may be about $30 million ($120 million – $86 million x 880,000 divided by 840,000), instead of apparently $34 million ($120 – $86 million)?

Total S&CC collections in a year?

With regard to “Depending on the HDB flat type, each eligible Singaporean household will receive between 1.5 to 3.5 months of S&CC rebate” – What is the total S&CC collected in a year?

Let’s try to make an estimate.

If the average S&CC rebates in quantum terms is about two months, then the estimated total S&CC is about $720 million ($120 million divided by 2 months x 12 months).

S&CC increase by $101m?

Since the PAP town councils announced an increase of between about five per cent (1-room) to about 20 per cent (executive flats) – and the minimum increase in the S&CC transfer to the “lifts” sinking fund is 14 per cent – we can estimate that the total S&CC may increase by at least $101 million ($720 million x 14%).

Net result – pay $71m more?

So, the bottom line may be that Singaporeans may effectively have a decrease in their S&CC cashflows by about $71 million ($101 – $30 million).

In other words, the two announcements last month on the Budget S&CC increase and the “lifts” S&CC increase may actually result in Singaporeans paying about $71 million more.

• Always give rebate, then increase?

This may be akin to a sleight of hand which seems to be prevalent in so many things in Singapore – whereby we get a rebate or subsidy coupled or followed by price increases which at the end of the day – we always pay more and more.