The former PAP Chairman points out that fare hikes will also ‘'help bus workers and operators.' (Yahoo! photo)
Public transport fare increases, while unpopular, are essential to finance pay increases for workers, said former Labour Ministry chief and Minister in the Prime Minister's Office Lim Boon Heng on Wednesday.
Speaking at a delegates' conference of the Singapore Shell Employees' Union, the former PAP chairman noted that no increase would be unjust for the transport operators' workers.
"You know raising bus fares is unpopular," he said. "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."
"But their wage increase will be funded by fare increases, which adversely impact the public."
Lim, who left the Cabinet after the General Election in May, also pointed out that if bus fares were never allowed to rise, transport operators might not have enough "to invest in new buses, and quality of service must drop," reported The Straits Times.
By "new buses", Lim referred to buses of higher quality as well as those cateriing to the handicapped and elderly.
He said that in the absence of productivity improvements, a 3 percent wage increase for workers meant that fares had to go up by 1.5 percent because labour costs make up half the total operating costs for buses.
Previously, operators tried to hold off fare hikes through productivity improvements, he said. These 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 it will get harder to make similar high gains in productivity. For one, fuel costs make up 30 percent of operating costs. A further jump in oil prices, which is beyond the control of bus firms, will affect operating margins, he said.
"But from the worker's perspective, when there are millions in profits, they want the employer to pay them better wages," Lim added.
"To them, millions of dollars in profits is a lot of money, and the commuting public feels fare increases are not justified."
SMRT posted net earnings of S$161.1 million for the financial year that ended this March, while SBS Transit had a net profit ofS$54.3 million for last year.
Both companies had applied for fare increases earlier this month, sparking off a public transport debate.
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