Tuesday, 17 February 2015

Best "Ang Pow" for Singaporeans for The Year of The Goat

Best 2015 Ang Pow for Singaporeans – Revoke 2015 Transport Fares Increases
And It Does NOT Cost Anyone A Single Cent!
In the Year of the Goat, the best “ang pow” for Singaporeans, especially for the millions who commute daily by public transport, is the revocation of the 2015 public transport fare increase announced to take effect from April 2015.  And the most innovative element of this “ang pow” is that not only would it not cost the government a single cent, it puts money back into the commuters’ pockets AND also saves public transport operators (PTO) the S$7.5 million needed to subsidise the needy in order to make the “affordable” new fares truly “affordable”.  This is nothing less than a win-win situation for the government, the commuting public and the PTOs.

The Case for no public transport fare increase is the strongest yet for 2015, the Year of The Benevolent and Compassionate Goat. 

Public Transport Companies are Highly Profitable and Economically Viable
Both PTOs, SMRT and ComfortDelgro, are expecting bumper windfall profits in their current closing financial year 2014-2015, and into the next financial year 2015-2016, according to DBS Bank and OCBC Bank analysts. 
Global oil prices have dropped by more than 50% in the last 6 months and would fall further in 2015 and not expected to recover much over the next few years. Gas prices have begun to follow the decline and the costs of grid electricity generation by our gas-fed power stations would reduce even further. Public transports especially buses and taxis would have their fuel bills greatly reduced. The fuel costs of MRT trains, mostly using grid electricity, should also fall according.

In end-January 2015, SMRT in fact announces its financial results for 3Q15 (Oct-Dec 2014), showing a 6.8% revenue increase to $313.2 million, and that all its business segments performed better than the previous year. Accordingly, SMRT net profit also increased by 58.4% $22.5 million, as staff costs, the largest expense component, remained flat and electricity and diesel costs decreased.

The April 2015 transport fare increase would have added another $27 million to SMRT revenue without any quid pro quo benefits to commuters by way of significant improvements in train punctuality, over-crowdedness, lesser breakdowns and customer service.  Of critical importance is the fact that even WITHOUT the fare increase, SMRT would still enjoy unprecedented economic viability and profitability.     

The other PTO, ComfortDelgro, also enjoys similar increases in ridership and oil price reductions, among other variables, to make it one of the most profitable public transport company on the Singapore Stock Exchange, never mind that two-third of its revenue come from its overseas units.

2015 Inflation Good News
According to a report by DBS, inflation forecast for 2015 has been cut sharply to 0.4% from a previous expectation of 1.7%.   Public transportation is weighted at 3.66% among the “basket of goods and services” considered by the inflation computation formula.   It means that without the April 2015 public transport fare hike of 2.8%, the already low expected inflation rate of 0.4% could be driven even lower to 0.38%!  This is a further bonus to Singaporeans across the board throughout the economy.

Would the Year of the Goat usher Singaporeans into a new epoch of bliss and prosperity with a win-win “ang pow” by revoking the 2015 public transport fare hike?  

It would take the wisdom and courage in the great Servant Leadership personality of the Goat (or Sheep) to give the people the enhanced economic satisfaction in this revocation act without having to spent a single cent of public fund while doing it.    

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