Workers' Party (WP) Member of Parliament (MP) Jamus Lim put forth a proposal to afford seniors and people with disabilities (PWDs) the "dignity to move around our beautiful city free of charge".
Speaking in the evening of Mar. 8 at the Committee of Supply debates, Lim estimated that such a move would add about S$300 to S$400 million a year, "or an increase of three to four per cent of the ministry's current budget."
The suggestion sparked a back and forth between Lim, Minister for Transport S Iswaran, and Leader of the Opposition Pritam Singh, with Iswaran asserting that such a policy would see large price increases for other commuters.
Benefits of free ridership for seniors and PWDs
Laying out the reasons for his proposal Lim said that free public transport:
- Would allow seniors who wish to continue working to do so without losing a significant portion of their pay cheque to transport costs
- Would encourage the elderly to be more active, benefiting their physical and mental wellbeing
- Aid Singapore's environmental sustainability efforts as the riders are "least likely" to use other "green" transportation options like bicycles
The economics professor also cited examples of free ridership that existed within Singapore already, such as the shuttle buses that connect students from MRT stations to tertiary campuses, and overseas.
"[...] around two years ago, Luxembourg became the first nation in the world to make all public transportation modes free within the country," he listed as one of the examples.
Noting that seniors and PWDs already enjoyed concessions, as well as the small fraction of ridership that they make up, Lim argued that the government would still be able to recoup its initial investment into public transport infrastructure.
"The financial impact will therefore correspondingly be more much more limited," he added.
Free ridership during off-peak hours
"Now, even if we are uncomfortable with completely unrestricted free usage, one reasonable accommodation would be to allow such free transport during off-peak hours," argued the Sengkang GRC MP.
During such periods, when buses and trains often run with spare capacity, Lim said the opportunity costs of not running a free-to-ride scheme would exceed the costs of doing so.
Iswaran: Financial burden by no means insignificant
Iswaran responded to Lim's proposal on Mar. 9, saying that the government understood where Lim was coming from.
"Yet [we] don't necessarily agree with where he suggests we go," said the minister.
Iswaran stated that the government already spends more than S$2 billion dollars annually in subsidies for public transport communities, and concession cards are held by almost a million seniors and persons with disabilities in Singapore.
Based on Lim's S$300 to S$400 million estimate, the proposal would mean a 15 to 20 per cent increase to the S$2 billion in subsidies, he noted.
If borne by commuters, adult fares will have to be increased by around 20 to 25 per cent today, or 30 to 40 cents on average, which is up to 11 times the fare increase last year.
Iswaran added that this financial burden would be "by no means insignificant," further noting that the number of persons with disabilities and seniors aged 60 and above is expected to increase by about 20 per cent by 2030.
However, the Public Transport Council (PTC) is "cognisant" of the need to ensure affordable fares for vulnerable commuter groups, and adopts a different approach to this.
When fares are increased, PTC has apportioned less of the increase to concessionary, commuter groups, and more to other adult commuters. But everyone pays a share, and those who can pay more, do so."
Lim: Only a three to four per cent increase in MOT's budget
Lim spoke again to clarify that his proposal explicitly states that the subsidy should be borne by Ministry of Transport's (MOT) expenditures, not by other riders.
"So he [Iswaran] spent quite a bit of time, I felt, attacking a little bit of a straw man," Lim averred.
While it is fair to say that S$300 to S$400 million is not "chump change", Lim said that "we should be clear that this is about three to four per cent increase in the ministry's budget, when you set it within context."
As the suggestion was not addressed, Lim again raised the possibility of free ridership during off-peak hours, as "the marginal cost in these cases are likely to be minimal in the form of foregone revenue."
Iswaran: 20 to 25 per cent increase in subsidies
Iswaran countered Lim, insisting that it is "not exactly a straw man argument at all," as "there is a need to explain where the money is going to come from."
He said that two-thirds of MOT's S$11 billion budget consists of development expenditure, and Lim's proposal is a recurrent operational subsidy of S$300 to $400 million.
Additionally, MOT's budget has been increased in recent years due to Covid-19 specific measures.
By discounting these factors, Iswaran said that Lim's proposal would instead be an increase in subsidies of about 20 to 25 per cent.
As for Lim's suggestion for off-peak measures, Iswaran said that he "would never rule any option out", and it would have to be looked at more carefully.
Iswaran also commented that the Leader of the Opposition Pritam Singh has previously spoken about how fare increases have contributed to the cost of living.
"In other words, Workers' Party looks askance at increases in fares, and yet, we are also arguing for spending more. And where do we cut them from? Well, from the government revenue," Iswaran said.
Iswaran: Leader of the Opposition is imputing words
Despite not intending to speak, Singh addressed a term used by Iswaran.
In debating how such an increase should be incurred, Iswaran had said that "we should be intellectually rigorous".
"I think he was going to say 'intellectually honest' but he stopped himself and said 'intellectually rigorous alternative proposals'," said Singh.
He further clarified that WP has put up four levers of revenue to consider where additional revenues can come from.
Iswaran rebutted Singh: "The Leader appears to be imputing words, but whatever it is, I think you can't have rigour without honesty."
He added that arguments about the different sources of revenue have been well discussed in the main budget debate.
The minister also noted that the balance between quality service, affordability, and financial sustainability should be struck within the ministry's budget, and not taken care of at some macro level.
Follow and listen to our podcast here
Top image by Singapore Stock Photos via Unsplash.