Impact of Increase in Public Transport Fares on Amount of Vouchers Given Out and on Financial Sustainability of Public Transport Operators
Ministry of TransportSpeakers
Summary
This question concerns Miss Cheng Li Hui's inquiry regarding the 2019 public transport voucher quantum and how the Land Transport Authority ensures financial sustainability without degrading service standards. Minister for Transport Khaw Boon Wan explained that the fare formula aligns with macroeconomic factors, but delayed adjustments have previously caused operator losses and increased taxpayer subsidies. He emphasized that fares must be set at sustainable levels to protect service quality and workers' livelihoods, while preventing the diversion of funds from other national priorities. To maintain affordability, the Government provides concessions for half the population and distributes public transport vouchers to cushion the impact of fare increases on lower-income households. The Minister noted that 300,000 vouchers worth $30 each were provided in the 2018 exercise to support vulnerable commuters following that year's fare review.
Transcript
34 Miss Cheng Li Hui asked the Minister for Transport in light of the Public Transport Council's announcement of a fare increase of up to 7% in the 2019 fare review exercise (a) whether the Ministry intends to increase the quantum to be disbursed in the 2019 public transport voucher exercise; and (b) how does LTA ensure the financial sustainability of our public transport without degrading service standards when fare adjustments are not in tandem with the cost of operation.
Mr Khaw Boon Wan: The Public Transport Council (PTC)'s fare formula was designed to keep fares in line with macroeconomic cost factors, such as inflation, wages, fuel, and network capacity increases, together with a productivity extraction. However, as I had explained in July this year, the fare adjustments were not fully implemented for many years, contributing to substantial losses by the public transport operators, and resulting in increased Government subsidies.
We cannot keep adding to taxpayers' burden, since every dollar spent on public transport subsidies is a dollar less for other national priorities like education and healthcare. The operators cannot sustain losses without performance degradation. As responsible employers, they also need to ensure that their workers' livelihoods are not affected. For all these reasons, we must keep our costs in check and set fares at the right level.
The PTC will ensure fares remain affordable for all. Our public transport fares are among the most affordable in the world, especially for concession groups such as students and seniors. One in two Singaporeans enjoys concessionary fares with a discount as high as 70% of adult fares.
In addition, the Government will step in to cushion the impact of the fare adjustment on lower income households. For example, for the 2018 Fare Review Exercise, the Government made available 300,000 Public Transport Vouchers (PTVs) worth $30 each. This is the largest PTV Exercise to date.