From Dec 23, public transport fares for adults who pay by card will climb by up to 11 cents, the highest on record in Singapore. The 2023 adjustment was spurred largely by a 62.3% rise in energy prices in 2022, as well as growth in core inflation and wages, said the Public Transport Council.
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00:00 Most of us will have to spend more on our bus and train travel from December 23.
00:09 Half of the 4 million people here who use public transport will fork out up to 11 cents more per trip,
00:16 the biggest fare increase on record.
00:18 And the other half, comprising the ones who qualify for concessions such as students, seniors,
00:23 low-wage workers and persons with disabilities, will see lower fare hikes of 4 to 5 cents.
00:29 So let's get to the point with Christopher Tan, starting with Chris,
00:34 why is the fare increase so sharp this time around?
00:38 Well, I think we have to look at the formula, which takes into account inflation, core inflation,
00:43 that is inflation excluding the cost of private transport and housing, and then wages, changes in wages,
00:49 and then the last main component is energy factor, the cost of energy, like oil and electricity.
00:57 Now, last year, after all the major economies opened, we saw that inflation ran away, right?
01:05 The cost of everything just went up, food, fuel, and even in Singapore, you see that rents have gone up,
01:12 shots through the roof, so to speak, and then go to hawker centres, you find that a bowl of noodles is going to cost more.
01:19 So this had an influence on the fare formula.
01:22 Each year's revision is based on the previous year's changes in the three components.
01:28 These three factors caused a huge spike in this year's fare revision, and also we have two new-age components in there.
01:36 One is to account for the growth in public transport network, which is fixed at 1.1% for the next five years,
01:44 and then also there is a productivity extraction.
01:47 I think these two new-age components, in my opinion, kind of muddies the waters a bit.
01:55 It's like a drop of ink in a glass of milk, you know.
01:58 You can't see that it turns black, but you know that it's not so pure, you know,
02:03 because the three main components I spoke about have been in place primarily because we wanted to track the change of cost
02:13 of running a business, in this case, public transport, and we wanted to have macro components in there
02:20 so that we don't see public transport operators passing costs directly onto commuters.
02:27 And when we have those three components that are already in place,
02:30 I think the necessity of putting these two other components in there really is debatable.
02:35 I see. Well, Chris, the 7% hike granted is only a portion of the maximum allowable 22.6% increase,
02:43 and the remaining 15.6% will be deferred to future review exercises.
02:48 So does it mean that fares will again rise more sharply, similar to what we saw this year?
02:54 So we have to look at the main components again.
02:59 Inflation has kind of eased off this year, and energy costs in the first half also eased off,
03:05 but there are signs that energy prices, oil prices are creeping up again.
03:11 So it really depends on how it pans out for the rest of the year from energy.
03:16 As for wages, I think, I mean, if wages go up, I think everybody should be happy about that.
03:21 So really, it's the wild card here is energy, whether energy costs,
03:26 it's going to be running away the last quarter.
03:30 So if that kind of shoots up sharply like it did last year,
03:35 then there is a very good chance the next year's fare increase is going to be either on par
03:41 or slightly more than what we saw this year.
03:45 If that happens, I think the PTC will once again use its discretionary powers to mitigate
03:54 and to kind of put a reality check on things.
03:57 We are already paying more for things, as you pointed out earlier, now, our public transport.
04:03 So is there a bright side to all of this, Chris?
04:06 I'm afraid not. I think, you know, even though 10 cents, 11 cents, in absolute terms, is not a lot.
04:14 And if you travel like four times a day or three times a day, it's still not going to add up to a lot.
04:23 But because we are paying so much more for all the other things, I think our monthly expenses, you know, will add up.
04:31 The average distance that we travel a day for each journey is about 10 km.
04:36 So cycling is an option. Walking, probably not.
04:41 I mean, to be realistic, I think 99% of us will still rely on public transport.
04:48 We find that there is mounting cost pressure. There are other things we can cut back on.
04:54 For instance, private hire rides, right?
04:56 If we cut back on each, say, taxi or private hire ride, that amount that we save will be used for several, several bus and train trips.
05:06 tips.