Transport fare hike offset by slew of concessions
Targeted help means many will pay less under adjustments starting April 6
By Christopher Tan, The Straits Times, 17 Jan 2014
Targeted help means many will pay less under adjustments starting April 6
By Christopher Tan, The Straits Times, 17 Jan 2014
AROUND a million commuters will pay less for travel, even as bus and train fares increase by two to six cents when the biggest price adjustment in 15 years kicks in on April 6.
This is because there will be a slate of new and enhanced concessions to go with the overall fare rise of 3.2 per cent, the Public Transport Council (PTC) said yesterday.
Releasing details of the first fare revision since 2011, the PTC also announced that although the two public transport operators here will make an additional $53.5 million in revenue, part of this will be contributed back to a fund meant to shield the poorest households from fare hikes.
SBS Transit and SMRT will have to contribute $7.2 million and $4.38 million respectively.
The fare adjustment means that ez-link card fares will go up by four to six cents for adults, two to three cents for senior citizens, and two cents for students.
Those paying by cash - who make up 3 to 5 per cent of commuters - will see costs shoot up by 10 to 20 cents every journey.
PTC chairman Gerard Ee pointed out that the 3.2 per cent rise is below last year's national average wage increase, which is "likely to be close to 5 per cent".
PTC chairman Gerard Ee pointed out that the 3.2 per cent rise is below last year's national average wage increase, which is "likely to be close to 5 per cent".
About 400,000 low-wage workers and 50,000 people with disabilities will be informed by mail in April how to apply for concession cards that will entitle them to discounts of 15 per cent and 25 per cent respectively.
Several new concessions were also announced, including a $120 monthly pass which will allow adult fares unlimited travel.
After years of lobbying, polytechnic students will now get the same monthly pass that their peers in junior colleges enjoy.
All other students - including those in university and Institute of Technical Education - will get cheaper hybrid passes which give them unlimited rides on buses and trains. National servicemen will pay $85 for such a pass - the same as university students.
Another enhancement gives senior citizens unlimited travel for $60 a month.
In all, some 500,000 people will enjoy bigger concessions.
With an estimated three million public transport commuters here, around one in three will benefit from yesterday's package.Transport Minister Lui Tuck Yew said on Facebook yesterday that the PTC had "struck a good balance by keeping the fare increase a few notches below the average wage increase in 2013 while enhancing concessions for a significant segment of commuters".
He added that concessions for low-wage workers "will bring their... fares to price levels comparable to what they were paying 10 to 15 years ago".
Lee Kuan Yew School of Public Policy associate dean Donald Low said the package was economically sound.
"You don't artificially suppress prices... and you don't subsidise across the board. Instead, you give targeted help," he said.
He also noted that the government-funded concessions to help the two needy groups were "significant". "But I wonder, how come they took so long to do this?"
Government Parliamentary Committee for Transport chairman Cedric Foo said keeping fares affordable was just one part of the equation. The other is to put more buses on the road, expand the rail network, and improve service and reliability.
Adult pass caps transport costs at $4 a day
It will offer unlimited train and bus rides for $120 a month
By Royston Sim, The Straits Times, 17 Jan 2014
It will offer unlimited train and bus rides for $120 a month
By Royston Sim, The Straits Times, 17 Jan 2014
EACH day, office manager Pamela Lee not only takes the train and bus from her Tiong Bahru home to her Boon Lay office, but she also often makes other journeys to run errands.
That takes her transport spending to more than $100 a month.
But from April 6, a new monthly pass will give her unlimited rides on buses and trains for $120. The 49-year-old said she intends to apply for it. "It's worth it for me," she said.
A similar pass for senior citizens is priced at $60.
The adult pass, which targets heavy users of public transport such as Ms Lee, caps transport spending to $4 a day.
The Transport Ministry believes that about 40,000 to 60,000 commuters will purchase the new pass. There are currently about 1.2 million beneficiaries of existing concession schemes.
This is the first time the Government is stepping in to set the price of an adult monthly pass. At $120, the new pass is nearly 40 per cent cheaper than the $190 that commuters now have to pay for an ez-link season pass for unlimited train and bus rides.
EZ-Link, a Land Transport Authority subsidiary, also offers a pass which permits four train rides and unlimited bus rides each day for $170.
In its report last year, the Fare Review Mechanism Committee pointed out the need for an unlimited pass to keep fares affordable for those who use public transport heavily, since they would bear the biggest brunt of any fare increase.
In its report last year, the Fare Review Mechanism Committee pointed out the need for an unlimited pass to keep fares affordable for those who use public transport heavily, since they would bear the biggest brunt of any fare increase.
The committee noted that the price of the ez-link pass was "unattractive". Its chairman Richard Magnus also suggested that average-income earners who spend $120 or more on public transport each month needed help.
When asked whether $120 was the right price point for heavy users, Dr Park Byung Joon, head of the Urban Transport Management Programme at SIM University, said there is no "ideal amount".
He noted that the monthly pass is effectively a concession scheme subsidised by regular commuters who pay the full fare. "There must be a social consensus first on how much these commuters should subsidise the heavy users."
Software manager Raja Sekhar, 37, said he will not be applying for the pass. He takes the train daily between Tampines and Raffles Place on weekdays, spending an average of $3 a day and $100 each month.
"The pass is not worth it for me, but for people who spend $150 to $200 a month, it's definitely beneficial," he added.
"The pass is not worth it for me, but for people who spend $150 to $200 a month, it's definitely beneficial," he added.
All Singaporeans and permanent residents can apply online or in person at TransitLink at Maxwell Road for the pass from March 6, which takes effect from April 6 when fares go up.
Help for low-wage workers, disabled signals major shift
By Christopher Tan, The Straits Times, 17 Jan 2014
By Christopher Tan, The Straits Times, 17 Jan 2014
THIS fare revision is unique primarily because of two government- funded concessions.
The $50 million worth of assistance for low-wage workers and people with disabilities signals a major policy shift.
For as long as Singapore has been independent, the Government had steered clear of subsidising consumption directly.
But of course, transport is a derived demand, which means no one commutes purely for the sake of commuting.
The policy shift is also another step towards a more inclusive society - an important and noble aspiration in a country with one of the widest gaps between the rich and the poor.
The government-funded concessions have also made it easier for the Public Transport Council (PTC) to meet its ever-challenging objective: to keep fares affordable and yet ensure the commercial viability of the two transport operators.
To be sure, relying on a mathematical fare formula is far from perfect. The previous formulas fell short because the inflationary component included car and property prices. First, they are extraordinarily expensive items in Singapore, and second, they have little bearing on public transport.
The latest formula addresses that by using core inflation, which excludes the two aforementioned items.
But it is not perfect either. The formula includes an energy index, which takes into account changes in diesel and electricity costs.
Thus, it is in some way a duplication of what the core inflation component represents.
PTC chairman Gerard Ee admits as much. Not only that, but the index allows operators' cost increases to be translated more directly into higher fares.
The previous formulas prevented operators from passing costs directly to the commuter. As such, they were forced to be more financially disciplined.
It is good too that the PTC has decided not to allow the formula to play itself out fully this year.
The calculations included an adjustment forgone in 2012, and would have resulted in a 6.6 per cent fare hike. But the council decided to approve 3.2 per cent and roll over the remaining 3.4 per cent to next year.
Mr Ee estimates that the formula will result in a minus 0.3 per cent adjustment next year. If so, 2015's fare adjustment would work out to be 3.1 per cent.
This rollover function, which was a key recommendation of the Fare Review Mechanism Committee, paves the way for flatter and more manageable changes.
Another crucial recommendation was for transport operators to give part of the fare rise to a fund helping the poorest families.
It is heartening that Transport Minister Lui Tuck Yew has increased the size of the fund and improved the way it will be disbursed. The latter is important.
Lee Kuan Yew School of Public Policy associate dean Donald Low says financial aid should not be "stigmatising, intrusive or burdensome" to the recipient. Make it as "automatic" as possible, he adds.
The fund's vouchers should be better distributed too. Obviously, poor families are not spread out evenly in Singapore. Hence, some MPs tell The Straits Times their vouchers run out quickly, while others usually have leftovers.
We shall see next year just how effective the improved fund is.
Meanwhile, it is quite clear the Government is now more willing to help needy families. And should the $7.5 million worth of vouchers be snapped up, there is a good chance it will draw more from the fund, which has a balance of $16.5 million after the latest withdrawal.
As for the slew of other concessions, the "burden sharing" principle still applies. In short, the full adult fares and cash-paying fares cross-subsidise the elderly and the young.
As such, many households will actually experience a dip in travel expenses - especially if they have family members in polytechnic, above 60, or who do not earn more than $1,900 a month.
Concessions may draw a flood of applications
By Royston Sim And Priscilla Goy, The Straits Times, 17 Jan 2014
By Royston Sim And Priscilla Goy, The Straits Times, 17 Jan 2014
WITH 500,000 Singaporeans expected to sign up for new concession cards to take advantage of transport subsidies for low-wage workers and the disabled, Transport Minister Lui Tuck Yew has asked for understanding.
"I expect we will encounter some hiccups along the way..." he wrote in a Facebook post last night. "...Close to half a million Singaporeans may apply, and hence half a million personalised concession cards will have to be printed and mailed out."
"I expect we will encounter some hiccups along the way..." he wrote in a Facebook post last night. "...Close to half a million Singaporeans may apply, and hence half a million personalised concession cards will have to be printed and mailed out."
The new and improved concession schemes announced yesterday have been targeted at varied segments of society, with low-wage workers, the disabled and polytechnic students some of the biggest beneficiaries.
Those with a monthly salary of no more than $1,900 and who are under the Workfare Income Supplement scheme will get a 15 per cent discount.
Cleaner Sim Ai Song, a 54-year-old father of two young children and the sole breadwinner, earns about $500 a month. But he spends a fifth of that on transport, which includes travelling from Commonwealth MRT, near his children's school, to Raffles Place MRT, where he works.
Cleaner Sim Ai Song, a 54-year-old father of two young children and the sole breadwinner, earns about $500 a month. But he spends a fifth of that on transport, which includes travelling from Commonwealth MRT, near his children's school, to Raffles Place MRT, where he works.
"Of course I welcome the cheaper fares. It's hard to get by and every cent counts," he said.
Disabled commuters will get fare discounts ranging from 25 per cent to more than 50 per cent, depending on distance travelled. They can also opt for a $60 monthly pass which gives them unlimited travel on buses and trains.
Disabled People's Association vice-president Judy Wee said any form of subsidy would help this group, which includes hotel reservations assistant Thomas Teo.
The 24-year-old, who uses a wheelchair, spends about $50 a month on transport. He lives near Tiong Bahru and works near City Hall. "With the concessions, I'd be willing to take jobs farther from home," he told The Straits Times. "But probably only if the office is near the MRT station."
These two schemes, expected to cost the Government $50 million, will benefit around 400,000 low-wage workers and 50,000 disabled people, and will kick in only on July 6 because of the time needed to process applications.
Government Parliamentary Committee for Transport chairman Cedric Foo said this move for polytechnic students "should have been done a long time ago".
Republic Polytechnic student and Sembawang resident Jody Phang, 21, will get to save $20 on the train concession pass, which he buys monthly.
Other concessions announced yesterday include giving free rides to all children below seven who have yet to enter primary school, and cutting the prices of all hybrid concession passes, including those for national servicemen and university students.
$30 vouchers to help needy cope with fares
By Priscilla Goy, The Straits Times, 17 Jan 2014
By Priscilla Goy, The Straits Times, 17 Jan 2014
MORE public transport vouchers in bigger amounts will be given out to needy families, who will also have greater flexibility in applying for them.
Some $7.5 million from the Public Transport Fund has been set aside for 250,000 vouchers of $30 each, to help the poor cope with the public transport fare changes announced yesterday.
Eligible families can also apply for vouchers multiple times, as they can be distributed throughout the year while they last.
Previously, vouchers were restricted to one per household, and the application window was limited to a short period around the fare increase.
The Public Transport Fund, set up by the Government in 2007, currently stands at $12.2 million.
The Public Transport Fund, set up by the Government in 2007, currently stands at $12.2 million.
It will get an $11.5 million boost this year, with one-time contributions from operators SMRT and SBS Transit.
It is hoped the greater flexibility will help lift the take-up rate of the vouchers. Just over half of the 200,000 available in the previous exercise in 2011 were taken up, even after the Government made two public announcements for applications.
MPs and help agencies said the lukewarm response could have been due to the small amount offered of $20 for each voucher, and the hassle in applying for them. Families have to go to community centres or clubs to apply.
Vouchers were worth $30 to $40 each in previous exercises in 2007 and 2008.
MP for Sembawang GRC Ellen Lee welcomed the relaxed rules, saying: "With multiple vouchers available, more people will be willing to go through the administrative process in applying.
"The open application window also gives more time for people to learn about the vouchers and apply."
Vouchers can be used to buy or top up ez-link cards or monthly concession passes. Eligible families can apply from March 3 at community centres and clubs, or ask grassroots leaders for help.
The People's Association will work with the Citizens' Consultative Committees to help distribute the vouchers from early April.