The Workers’ Party is concerned about the Transport Minister’s suggestion on 6 December 2012 that bus fares may increase so as to improve the pay of bus drivers in Singapore. It is unfortunate that the Minister has made this statement so soon after the SMRT bus drivers’ strike over pay issues. Any decisions on fare increases should be made only after a period of review and adequate debate, which take into consideration the public interest and the fact that public transport is an essential public good.
We recognise that bus drivers need to be paid more and we need to attract more Singaporeans to take up this profession. However, the Government should not assume nor suggest that this cost increase must automatically be borne by commuters. The two public transport operators (PTOs) remain very profitable. SMRT and SBS Transit turned a profit of $119.9 million and $36.7 million respectively in the last financial year, while providing shareholders a return on equity (ROE) of 15.1% and 11.3% respectively over the same period. In contrast, the median ROE for Singapore Exchange-listed companies over the past year was 7.8%.
The Government recently gave the two operators a massive subsidy of $1.1 billion through the Bus Services Enhancement Fund (BSEF). Despite these glowing profits and huge subsidies, bus fares have increased eight times since 2000 and seem likely to increase once again next year. It appears taxpayers and the commuting public have been bearing the brunt of rising costs to help maintain the shareholder return of these listed companies.
Commuters should not be expected to pay higher fares, especially when service standards remain unsatisfactory, as they have been since the last fare hike. The Government and PTOs must put the public interest before shareholders’ interests. If PTOs are unable to do so because of their obligations to shareholders, public transport should be taken out of private hands and run by a not-for-profit corporation which focuses on providing efficient and quality public transport, instead of generating shareholder returns.
With Singapore facing a slowing economy coupled with persistently high inflation, a price hike will only add to the hardship faced by many middle and low income Singaporeans. We repeat our call for the Government to fund more generous public transport concessions for senior citizens and introduce fare concessions for people with disabilities.
THE WORKERS’ PARTY
9 December 2012