We are all used to this.
Public transport operators are listed companies and need to earn a profit for their operations. At the urging of the public, they have granted concessions to various groups of people. However the more concessions that are granted, it would mean that other commuters would have to pay higher fares to make up the difference. [Yeo Cheow Tong, 2001]
In Singapore’s case, public transport concessions are provided by the public transport operators based on their commercial considerations. Any concession that the PTOs grant, such as for senior citizens, is a form of cross-subsidy from other full-paying adults. [Raymond Lim, 2005]
Concessionary travel on basic bus and train services are determined and granted by the public transport operators (PTOs). The cost of concessions is ultimately cross-subsidised by other full-fare paying commuters and the operators have to take this into consideration before extending travel concessions beyond the present arrangement. [Lui Tuck Yew, 2011]
This is a non-answer. It is a non-answer on two basis.
1. The fallacy of that ‘economic burden’ argument
We are always told that “the cost of concessions is ultimately cross-subsidised by other full-fare paying commuters.” The last I check, the SMRT leases out approximately 28,900 square metres of commercial space within the train network. A total of 33 MRT stations have been refurbished with increased space and rental yields. Average occupancy rate in FY2010 remained high at 99%. SMRT alone achieved rental revenue of $65 million despite economic downturn as reflected in its 2010 financial year report. This was an increase of 13% from the previous year. SMRT expects rental revenue to grow by another $6 million with increased rental space at MRT stations. This is notwithstanding the revenues it made from its taxi business and advertising streams.
SBS on the other hand, made $50.1 million from its outdoor advertising and rental streams. (Bus Advertising, In-Train Advertising, Interchange Advertising, Train Station Advertising, Shop Space, Road Show Space) This was an increase of 32.9% increase in revenue over the past year.
The cost of concessions need not necessarily have to be cross-subsidisied by other full-fare paying commuters. It can be cross subsidised by other revenue streams under the charge of both SMRT and SBS. Besides, it must be noted that even without the increasing the concessions for tertiary students, the fares of adult commuters have increased over the years.
Besides, the junior college students are enjoying a higher rate of subsidies as compared to the tertiary students. Who is paying for their subsidies? That “full-fare paying commuter”?
So the government’s argument is fallacious to say the least and falls completely flat when considered further. It is a non-answer.
2. The Government has much greater influence over the Public Transport Council (PTC) and the public transport operators (PTOs) than it has acknowledged in its public statements.
Transport fares don’t just go down during economic downturns with a simple announcement made by the PTC. The government has a big role in it. Given that the public transport operators are commercial entitles, public transport fares would only go up and not down. The demand for public transport in Singapore is essentially inelastic. The existing model essentially perpetuates the influence of two monopolies operating in different areas and often times, they do not overlap. The incentive factor to improve its productivity and the competitive advantage is non-existent in this context. There is no need to lower fares. In fact, it is a fallacy to think that SBS Transit and SMRT represent genuine competition which will ensures efficiency and good performance, within the context of rigorous market discipline. In fact, upon each request, the Public Transport Council kindly offers the PTOs with a blank cheque to run roughshod over the hard-earned income and savings of ordinary Singaporeans, registering record profits year after year while the real income of ordinary Singaporeans continue to fall.
The same bottom line argument can still be used for refusing to lower fares during economic recessions. However, the government will not allow that. The government’s role on the PTC and the PTOs is and can be significant. The government has to make a political judgement and ultimately it has to be responsible for the judgment made. At the core of it, the government needs to have the will but as seen repeatedly, this government lacks the will to do the right thing on the tertiary concession fares issue. It is disappointing to say the least.
Nonetheless, a non-response is better than a no-answer but that is just not enough. The government can certainly do better than that. The government was elected by the parents of junior college and tertiary students to ensure an affordable standard of living for all. Right now, the government is leaving the elderly, the disabled and tertiary students behind. Action, moral clarity and the will to govern fairly is sorely lacking.
At the end of the day, it is not stating too much to highlight that this inherent unfairness within the concession fare structure is becoming a source of disappointment and disillusionment amongst the student community and their parents. A decisive gesture on the part of the government in tandem with the PTC and PTOs to resolve this inherent conflict in the same spirit of responsible, rational and constructive engagement would be much appreciated.
The government needs to be more responsible to its electorate and lead. This is at the end of it, a leadership problem. Don’t push the responsibility around with a single narrative. Start leading.
The recent Speakers’ Corner event organised by the Young PAP and past petitions and outreaches over the years have at the very least shown our government the meaning of humility and more importantly, the need for leadership, sorely lacking in this issue.
Leadership cannot be demanded. It has to be earned.
Where’s the leadership, Mr. Lee?
Filed under: PAP, Singapore, Junior Colleges, Polytechnics, Student Transportation, Tertiary Concession Fares
Poly students would be taken more seriously on this subsidy issue if they at least acknowledged how much more they are already subsidized at their level relative to a JC student.
And the fact that, after the higher subsidy, they would still earn more with a diploma than an A level certificate
Or if they were willing to wear school uniform and sing the national anthem everyday on campus at 7:30am even if their first class is at 1pm.