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SINGAPORE : It would take a further 1.5 percentage point hike in GST if bus and train rides were to be made completely free.
Transport Minister Raymond Lim revealed this at a dialogue session with MacPherson residents on Sunday.
One resident at the session said: "(During) this tough and uncertain period, I hope there will be no increase in transport fares."
With leaner times ahead and recovery not yet in sight, public transport fares - always a hot issue - dominated the discussion.
And while Mr Lim is making no promises, he said he understands ground concerns and pointed out that the Public Transport Council will look carefully at economic conditions before considering any increase.
But if things became really bad, will the government consider subsidising public transport fares?
Mr Lim pointed out that even with subsidies, it will still be the public which ends up paying.
Mr Lim elaborated: "There are only two persons who pay when it comes to public transport fares. One, I use - I pay. Or two, I use - you help me subsidise my ride. What happens when you subsidise my rides? That means the taxpayers are now paying."
Going to the other end of the spectrum, if rides were to be made completely free, that would impose a heavy tax burden on the people, as it takes S$1.2 billion just to run the bus and train systems annually.
Mr Lim said: "The money still must come from somewhere, right? It is about a 1.5 percentage point increase of your GST. So, now it is 7%. You want it to be free, do you want the GST to go up to 8.5% to run a completely free bus and train system?"
But with oil prices - which operators traditionally cite as one of their high cost factors - dropping significantly in recent months, why have bus fares not come down in tandem?
Mr Lim explained: "This is because the public transport fare is not directly linked to the oil prices. We link it to national factors, like the inflation level in Singapore, and the wage level in the whole of Singapore."
Moving to a cheaper form of transport, one resident asked: "I would like to know... whether we are having, in the near future, a pro-bicycle government policy, where it can provide shady bicycle tracks all over the island."
For now, Mr Lim said using two-wheelers as a form of transport is good for just intra-town travel. And it cannot be applied uniformly across the island but has to be adapted for different communities.
Apart from Tampines, authorities are also looking at Yishun and Sembawang for pilot cycling projects.
MacPherson is a constituency which has a high number of compact high-rise HDB flats, and a population that has a higher proportion of the elderly above the age of 50 who are more likely to be from the lower household income group.
It is not surprising then that not just public transport fares but also other cost of living issues that dominated the dialogue session. These included questions on whether costs of goods and services are expected to come down during this recession.
Another topic touched on was that of foreigners working in Singapore. One issue raised was whether the policy of letting foreign workers go first should also apply at the management level.
Mr Lim pointed out that this differs from company to company, and depends on how badly the particular company needed the special skill sets of those management staff. - CNA/ms
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