Jan 20, 2014

    Don't forget low-middle-income commuters

    THE fare hike announced on Thursday provides for more concessions to children, students and full-time national servicemen (NSFs), but is something the rest of the commuting public will have to bear.

    This cross-subsidy arrangement is business as usual, except that this time round, the Government has chosen to fund two other concessions - for low-wage workers on Workfare and people with disabilities - amounting to $50 million a year.

    "Low-wage workers" refers to those earning a gross monthly income of $1,900 or less - a qualifying criterion for Workfare.

    However, these moves raise questions for the commuting public at large: What is the impact of the additional concessions to be borne by other commuters who belong to the low-income bracket, but do not qualify for Workfare, as well as the "sandwiched" lower-middle class? Should the Government also give them some help?

    The 2010 population census showed that they are a substantial group.

    At the lower end of the income scale, 363,107 resident working people earning a gross monthly income of $1,999 or less take public transport. This corresponds to the 400,000 low-wage workers the Government expects to benefit from its new concession scheme.

    Just above this income bracket are another 200,322 working commuters earning $2,000 to $2,999, and 138,788 earning $3,000 to $3,999, or 339,110 in all.

    There are fewer working commuters in the upper-income tiers - 244,347 earn $4,000 or more.

    Hence, nearly 1.4 times more commuters from the lower-middle- and middle-income group than the higher-income group will bear the burden, assuming similar travel patterns across both groups.

    As for the amount they will bear, no overall cost figure was given in the latest announcement.

    But Transport Minister Lui Tuck Yew said in 2012 that the estimated additional cost to give polytechnic students full student-travel concessions is about $28 million a year, based on 2012 fares.

    Besides the 80,000 polytechnic students who are expected to benefit this time, another 350,000 or so commuters will be granted concessions.

    They include up to 150,000 children below seven years old, who will travel for free, 150,000 students who could benefit from cheaper bus/train monthly passes, unlimited train rides for some passes and the extension of eligibility to Singaporeans studying full-time in private schools, as well as 10,000 NSFs who will have cheaper monthly passes.

    Up to 40,000 senior citizens could also sign up for a monthly concession pass.

    Those lower-middle- and middle-income workers whose dependents belong to the above groups, will get some relief.

    And if they commute frequently, a new adult monthly travel pass costing $120 for unlimited rides, may lighten their expenses.

    But there will be people who do not belong to these groups. To them, the official assurance given so far is that the affordability of fares is tracked even for their income groups. Tracking should continue.

    The perception of being excluded from concessions also needs to be addressed.

    The Government has addressed this point in other policies. Goods and services tax vouchers, for instance, are given not just to those in the lower-income group, but also those in the middle-income group, in lower amounts based on public housing type, including those living in five-room and executive flats.

    I agree with those who say that even if one does not qualify for travel concessions today, some day they will - if they grow old or have dependents, or both.

    But coupled with fare increases, the situation of this group should be closely watched and, when necessary, the Government should step in.