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Can concessions be extended in future transport fare hikes?

Published on Jan 16, 2014 10:30 PM
 

The announcement by the Public Transport Council that fares would rise this year and next did not come as a surprise to many.

It has been almost three years since the two public transport operators had been allowed to institute a fare increase. In 2011, adults had to pay about two cents more per journey.

This time round, full-paying adult commuters will see their fares rise 3.2 per cent - or four to six cents per journey. This is the most substantial hike in years. (There is no confirmation on next year’s hike but it is likely to be in the region of 3.1 per cent.)

There were two reasons the fare hike was not a surprise.

The announcement by the Public Transport Council that fares would rise this year and next did not come as a surprise to many. -- ST PHOTO: SEAH KWANG PENG

The first being that as with most other businesses, the two public transport operators - SBS Transit and SMRT - are facing increasing operational costs. This includes upping their maintenance schedules, paying higher fuel prices and dealing with increased staff costs of hiring more workers.

And public transport ridership numbers while still growing, are moving at a slower pace.

The second reason why a fare hike was imminent is the Government’s obvious push towards a more inclusive society.

This year’s slew of concessions and subsidies are testament to that.

A 14-member committee, known as the Fare Review Mechanism Committee, was tasked to look at fare affordability and concession. It submitted a lengthy 85-page report with numerous recommendations.

The Government accepted all its recommendations. This means that a total of 1.7 million commuters from primary school pupils to low-wage workers, high public transport users to the disabled and National Servicemen will benefit from some sort of a concession. This is up from the 1.2 million already enjoying concessions.

This is undoubtedly a big leap in the right direction towards a more inclusive society.

It ensures that vulnerable pockets of the population do not feel hindered or hesitant to set out of their homes to pursue their goals or go about their daily pursuits, just because they cannot afford it.

After all, in other countries like Scotland, public transport is free for people with disabilities while in the United States, all senior citizens pay half of the adult fare during off-peak hours.

But with all good things there is a price to pay. The funds to help these vulnerable groups must come from somewhere. And whether directly or indirectly most of it will come from full-paying adult commuters.

The bill of $50 million for concessions for low wage workers and disabled individuals will be borne by the Government - or indirectly from taxpayers.

And while the two operators must set aside a proportion of the gains from the fare increase to contribute to the Public Transport Fund, these monies are from full-paying adult fares.

Meanwhile, all the other concessions and subsidies including cheaper monthly bus-train concessions for students, unlimited monthly concessions for senior citizens and free travel for children under seven, will have to be paid for by cross-subsidising from full-paying adult fares.

And as we move forward as a country, these subsidies will keep increasing.

For now, low-wage workers and disabled individuals are receiving modest discounts of 15 per cent and 25 per cent respectively.

Experts say it will take more than that to get disabled people out and about.

And as our society ages, the proportion of society that is frail and disabled will increase with more needing help to pay for their bus or train rides.

Singapore’s population is greying at a rate that is among the world’s fastest - with those above age 65 set to make up one in five of the population by 2030.

With it being (almost) everyone’s goal to make public transport accessible to all, some full-paying commuters will find this year’s fare hikes fairly negligible.

This is the group of commuters who will barely notice an additional four to six cents being deducted from their transit cards - most are unlikely to know how much their daily commute cost.

On the flipside, there will be a group that will notice that additional deduction, feel the pinch and need to tally it up in their monthly travel expenses.

If we are to move to a truly inclusive society, then should the new subsidies address this group of commuters - the low-income and middle-income who are strapped, but not eligible for Workfare or other assistance schemes?

Instead of having just one ceiling and restricting the qualifying of public transport concessions to gross monthly income of not more than $1,900 currently, should different income tiers be taken into account?

Those slightly above the $1,900 cut-off could get some sort of benefits as well, though not as much as the low-income group.

Healthcare subsidies are similarly structured, and this is worth pondering before the next public transport fare increase in 2015.