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[h=2]Public transport is significantly subsidized? My foot!![/h]
September 13th, 2012 |
Author: Contributions
The Transport Minister claimed in parliament that public
transport in Singapore had been significantly subsidized and this helped to
ensure fares remained affordable. In summary, he said the government borne the
cost of infrastructural development such as MRT tunnels and bus interchanges.
Transport operators, on the other hand, borne the operational costs of running
the transport systems and such costs were recovered from fares.
He was either an idiot or a liar! Let me tell you, Transport Minister, how a
tall hierarchy of transport costs had been built up for Singaporeans to
bear.
How were the building of tunnels and bus interchanges costed out? To begin
with, was there any component of land cost? Land belonged to the citizens, did
you cost it at market value and then got the Land Authority to transfer it to
the Land Transport Authority? The land’s market value and the cost of building
those tunnels and bus interchanges were then termed “subsidies”. This total
amount was $X (this already had been paid by us to State’s coffer).
To balance the nation’s budget (we all know PAP hates budget deficit or
withdrawal on past reserves), the “outflow” of $X would have to be “top-up” by
either revenue from tax-payers or government fees. Singaporeans as a whole paid
$X.
Next, no one in his sound mind will believe that a PAP Government would let
the transport operators used the tunnels and bus interchanges for free! There
must be a certain annual charges, in whatever name and in whatever form, for
using those public infrastructure. This annual charge amounted to $Y – and it
will be added to the transport operator’s operational cost, $Z. Hence, total
cost of transport operators is $Y + $Z.
Now, the profit component! The fares paid by each rider have to cover both
the operational costs and profits of the transport companies – because both are
listed companies and need profits. If both were nationalized, Singaporeans would
not have to pay for this profit component (and their fares need not include each
operator’s income tax on profit too!!). SMRT made a total profit before tax of
$892 million over its last five financial years (2008 to 2012); i.e. each year
it made an average profit before tax of $178 million. SBS Transit’s operating
profit (before income tax) for its past five financial years (2007 to 2011)
amounted to $273 million; i.e. $55 million per year. Thus, public transport
operators’ profits (before income tax) amounted to about 178 + 55 = $233 million
each year.
So, Transport Minister, what was the tall hierarchy of transport costs that
weighed on our shoulders? All in all, and in whatever form it took, we were made
to bear $X (paid to government to prevent budget deficit), plus annual costs of
$Y + $Z + $233 million (paid to transport companies).
If public transport were nationalized, we need not have to top-up $X
(government need not recover every cent it spent from reserves or revenue), we
need not pay the annual costs of $Y and $233 million. We only need to pay $Z
(which includes cost provisions for future replacement and maintenance).
.
Celia Lim
transport in Singapore had been significantly subsidized and this helped to
ensure fares remained affordable. In summary, he said the government borne the
cost of infrastructural development such as MRT tunnels and bus interchanges.
Transport operators, on the other hand, borne the operational costs of running
the transport systems and such costs were recovered from fares.
He was either an idiot or a liar! Let me tell you, Transport Minister, how a
tall hierarchy of transport costs had been built up for Singaporeans to
bear.
How were the building of tunnels and bus interchanges costed out? To begin
with, was there any component of land cost? Land belonged to the citizens, did
you cost it at market value and then got the Land Authority to transfer it to
the Land Transport Authority? The land’s market value and the cost of building
those tunnels and bus interchanges were then termed “subsidies”. This total
amount was $X (this already had been paid by us to State’s coffer).
To balance the nation’s budget (we all know PAP hates budget deficit or
withdrawal on past reserves), the “outflow” of $X would have to be “top-up” by
either revenue from tax-payers or government fees. Singaporeans as a whole paid
$X.
Next, no one in his sound mind will believe that a PAP Government would let
the transport operators used the tunnels and bus interchanges for free! There
must be a certain annual charges, in whatever name and in whatever form, for
using those public infrastructure. This annual charge amounted to $Y – and it
will be added to the transport operator’s operational cost, $Z. Hence, total
cost of transport operators is $Y + $Z.
Now, the profit component! The fares paid by each rider have to cover both
the operational costs and profits of the transport companies – because both are
listed companies and need profits. If both were nationalized, Singaporeans would
not have to pay for this profit component (and their fares need not include each
operator’s income tax on profit too!!). SMRT made a total profit before tax of
$892 million over its last five financial years (2008 to 2012); i.e. each year
it made an average profit before tax of $178 million. SBS Transit’s operating
profit (before income tax) for its past five financial years (2007 to 2011)
amounted to $273 million; i.e. $55 million per year. Thus, public transport
operators’ profits (before income tax) amounted to about 178 + 55 = $233 million
each year.
So, Transport Minister, what was the tall hierarchy of transport costs that
weighed on our shoulders? All in all, and in whatever form it took, we were made
to bear $X (paid to government to prevent budget deficit), plus annual costs of
$Y + $Z + $233 million (paid to transport companies).
If public transport were nationalized, we need not have to top-up $X
(government need not recover every cent it spent from reserves or revenue), we
need not pay the annual costs of $Y and $233 million. We only need to pay $Z
(which includes cost provisions for future replacement and maintenance).
.
Celia Lim
