Committee of Supply debate: Ministry of Transport

Tax burden for transport 'can't be too excessive'

FARE HIKE NEEDED AT TIMES: The PTC cannot always bring good news. Sometimes, they have to adjust fares upwards. If they do, I hope commuters will be understanding. - TRANSPORT MINISTER KHAW BOON WAN
FARE HIKE NEEDED AT TIMES: The PTC cannot always bring good news. Sometimes, they have to adjust fares upwards. If they do, I hope commuters will be understanding. - TRANSPORT MINISTER KHAW BOON WAN

It is not sustainable for taxpayers to increasingly subsidise the cost of operating Singapore's public transport systems.

Transport Minister Khaw Boon Wan said this and raised the possibility of commuters paying higher fares in his speech in Parliament yesterday, during the debate on his ministry's budget.

Mr Khaw said that over the next five years, the Government expects to subsidise public bus services by almost $4 billion.

Under the new bus contracting model, fare revenue goes to the Government, but this is still insufficient to cover operating costs, he explained.

The Government, he said, also expects to spend another $4 billion or so on replacing ageing rail assets in the same timeframe.

"And all this is on top of about $20 billion we will be spending to build new public transport infrastructure," he added. "We must ensure that the fiscal burden does not become too excessive for taxpayers."

He said that in the earlier years, taxpayers funded the construction of transport infrastructure while commuters bore the operating costs through fares.

"But over the years, as fares have not kept up with rising costs, taxpayers have to subsidise more and more of the operating costs, especially as we have been raising service standards significantly," he said.

Mr Khaw said the Public Transport Council (PTC) will review the fare formula when it expires following this year's fare adjustment exercise.

"They will consult widely. I am confident that they will decide wisely," he said, emphasising that "many commuters have benefited" from the council's recent harmonisation of fares between above-ground and underground MRT lines.

"They have seen their fares reduced," he said. "But remember, the PTC cannot always bring good news. Sometimes, they have to adjust fares upwards. If they do, I hope commuters will be understanding."

A version of this article appeared in the print edition of The Straits Times on March 09, 2017, with the headline 'Tax burden for transport 'can't be too excessive''. Print Edition | Subscribe