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Fare hikes 'help bus workers and operators'
FORMER labour chief and minister in the Prime Minister's Office Lim Boon Heng waded into the public transport debate yesterday, explaining why fare increases, while unpopular, are necessary.
If bus fares were never allowed to go up, transport operators might not have enough 'to invest in new buses, and quality of service must drop'.
Speaking at a delegates' conference of the Singapore Shell Employees' Union, he noted that fare increases also went towards funding pay rises for workers.
'You know raising bus fares is unpopular. But if we cannot raise bus fares, how will that impact your fellow workers? I am sure you will understand that it is not fair if they cannot get wage increases,' he said.
'But their wage increase will be funded by fare increases, which adversely impact the public.'
Mr Lim, who left the Cabinet after the May General Election, said that in the absence of productivity improvements, a 3 per cent wage increase for workers meant that fares had to go up by 1.5 per cent because labour costs make up half the total operating costs for buses.
In the past, operators did their best to stave off fare hikes through productivity improvements, he said.
Examples included doing away with conductors so buses became one-man operations, and introducing double-decker and bendy buses so each driver served more passengers.
'So productivity went up, fares were kept down, but bus drivers could get wage increases as wages of conductors no longer featured in the cost of operations,' he said.
But going forward, it will be harder to make similar high gains in productivity.
To add to the conundrum, fuel costs make up 30 per cent of operating costs. So a further hike in oil prices, which is beyond the control of bus firms, will also impact on operating margins, he said.
'But from the workers' perspective, when there are millions in profits, they want the employer to pay them better wages. To them, millions of dollars in profits is a lot of money. And the commuting public feels fare increases are not justified,' he said.
SMRT posted net earnings of $161.1 million for the year ended this March, while SBS Transit had a net profit of $54.3 million for the year up to last December.
Both companies applied for fare increases earlier this month.
But Mr Lim said companies also need to invest in new buses that are of higher quality as well as handicapped- and elderly-friendly.
ELGIN TOH
FORMER labour chief and minister in the Prime Minister's Office Lim Boon Heng waded into the public transport debate yesterday, explaining why fare increases, while unpopular, are necessary.
If bus fares were never allowed to go up, transport operators might not have enough 'to invest in new buses, and quality of service must drop'.
Speaking at a delegates' conference of the Singapore Shell Employees' Union, he noted that fare increases also went towards funding pay rises for workers.
'You know raising bus fares is unpopular. But if we cannot raise bus fares, how will that impact your fellow workers? I am sure you will understand that it is not fair if they cannot get wage increases,' he said.
'But their wage increase will be funded by fare increases, which adversely impact the public.'
Mr Lim, who left the Cabinet after the May General Election, said that in the absence of productivity improvements, a 3 per cent wage increase for workers meant that fares had to go up by 1.5 per cent because labour costs make up half the total operating costs for buses.
In the past, operators did their best to stave off fare hikes through productivity improvements, he said.
Examples included doing away with conductors so buses became one-man operations, and introducing double-decker and bendy buses so each driver served more passengers.
'So productivity went up, fares were kept down, but bus drivers could get wage increases as wages of conductors no longer featured in the cost of operations,' he said.
But going forward, it will be harder to make similar high gains in productivity.
To add to the conundrum, fuel costs make up 30 per cent of operating costs. So a further hike in oil prices, which is beyond the control of bus firms, will also impact on operating margins, he said.
'But from the workers' perspective, when there are millions in profits, they want the employer to pay them better wages. To them, millions of dollars in profits is a lot of money. And the commuting public feels fare increases are not justified,' he said.
SMRT posted net earnings of $161.1 million for the year ended this March, while SBS Transit had a net profit of $54.3 million for the year up to last December.
Both companies applied for fare increases earlier this month.
But Mr Lim said companies also need to invest in new buses that are of higher quality as well as handicapped- and elderly-friendly.
ELGIN TOH
