Workers’ Party call for fare hike to be delayed, minister Josephine Teo hits back on Facebook

[UPDATE on Saturday, 18 January, 11am: Adding WP and Josephine Teo’s responses]

Senior Minister of State for Transport Josephine Teo has issued a sharp response to a call by the opposition Workers’ Party (WP) for a recently-announced fare hike to be delayed. The WP wants the fare hikes to begin only when two new concession schemes for lower-wage workers and persons with disabilities are implemented.

The Public Transport Council (PTC) announced an overall adjustment of 3.2 per cent to public transport fares on Thursday. This will take effect from 6 April this year.

It also estimated that an adjustment of 3.1 per cent would take place next year.

Along with the hikes, the council announced a slew of concessions for special groups such as polytechnic students and full-time national servicemen which will also take effect from 6 April as well as concessions for lower-wage workers and persons with disabilities which will take effect from 6 July.

In a statement, WP said it is “disappointed” that the fare hike will take place three months before the concession schemes for lower-wage workers and people with disabilities are to be implemented.

It also raised concerns over the majority of the commuters experiencing a "very large" overall fare increase of up to 6.6 per cent in the next two years, “despite train breakdowns having become a regular affair”.

The party said it believes service quality, reliability and fare affordability should come before the need to ensure the profitability of public transport operators (PTOs).

In a Facebook post, Teo criticised WP for not reading reports carefully, adding that “transport vouchers of between $30 and $80 are going to both groups [lower-wage workers and persons with disabilities] from April to tide them over”.

She also said that everyone else who needs extra can get additional vouchers year-round.

Teo also took issue with WP opposing operators getting more fares through the adjustment while wanting better services.

"It conveniently avoids the question of how better services are to be paid for,” said Teo, adding “In WP’s world, these things can all be achieved without more effort and resources.”

The minister of state also said that most reasonable commentators agree that the current package of fare increase coupled with significant concessions is to be lauded.

The government will contribute as much as commuters are contributing, while fares are kept affordable, added Teo.

Teo ended her post by saying PTC chairman Gerard Ee and his team deserve thanks for taking on the "incredibly difficult job”, adding that the opposition should just give its unqualified endorsement of PTC’s “great work done”.

Bus, train card fares to go up by as much as 6 cents by April

PTC announced in a press briefing on Thursday that bus and train commuters in Singapore not eligible for certain concessions will pay between four and six cents more per journey on card transactions starting from 6 April.

The council also said that senior citizen concessionary fares will increase by two to three cents per journey, while student concessionary fares will rise by two cents per journey.

The PTC estimates that the average increases in fare expenditure to be S$21 for adults, S$10 for senior citizens and S$7 for students.

Ee pointed out that the council decided to grant an overall fare adjustment of 3.2 per cent rather than the total fare cap of 6.6 per cent for the 2013 fare review exercise.

“Clearly, 6.6 per cent in one go is very high, and so, to minimise the impact on commuters, it was quite obvious to us that we should just do part of the increase this year, and roll-over the rest, as provided for under the new “roll-over mechanism as recommended in the FRMC report,” said Ee.

He estimated that the next adjustment would be an increase of 3.1 per cent instead of the remaining fare cap of 3.4 per cent.

The council will consider what the 2014 fare adjustment formula would be and the new figure for adjustment would likely be finalised this April, he added.

Ee said the 2012 fare review exercise was suspended to allow the Fare Review Mechanism Committee (FRMC) to complete their review, adding that public transport fares were last adjusted in October 2011.

Meanwhile, cash fares for train and adult bus rides will increase by 20 cents per trip, while senior citizens and student concessionary cash fares for bus rides will increase by 10 cents per trip.

Only an estimated 3 to 5 per cent of public transport commuters pay in cash, as most commuters pay using ezlink contactless cards.

Ee said that in the council’s deliberations, it took guidance from the FRMC’s recommendations which were accepted by the government in November 2013, including the new fare formula, fare review mechanism and public transport affordability.

Affordability

During the press briefing, Ee also said that the adjustment of 3.2 per cent is significantly lower than the expected averaged national wage increase for 2013.

He explained that while the council don’t have the full-year’s data, there was a 4.1 per cent year-on-year increase based on January to September 2013 data, and the average national wage increase is likely to be close to 5 per cent for the full-year because of generally better year-end bonuses for 2013 compared with 2012.

“So from the affordability perspective, for the average commuter, I think a 3.2 per cent fare increase is acceptable, although clearly, specific groups may require some help to cope with fare increases,” said Ee.

The PTC chairman also touched on various enhancements to concession schemes that will be introduced along with the fare hike to ensure fares remain affordable.

These include lowering the monthly concession pass prices for polytechnic students by almost 50 per cent as well as two new concession schemes for low-wage workers and persons with disability that would be separately implemented by the government in July. 

Where is the money going?

With the fare hike, there will be an increase of about S$53.5 million a year in fare revenue for the two PTOs, SBS Transit and SMRT.

Ee said while the fare increase will boost the companies’ financials – helping them have the money to improve service standards, raise wages for staff and increase bus fleets – the two PTOs are required to set aside a part of the additional revenue to the public transport (PT) fund to fulfill their public service roles.

In total, the two PTOs will contribute a one-off total sum of S$11.58 million to the PT fund, compared with previous years when they typically contribute under a million dollars.

The money will help needy families cope with the fare adjustment.