Transport costs higher than most cities, after factoring minimum wage and cost of living

by Leong Sze Hian

The announcement from the Public Transport Council (PTC) regarding the 7% increase in bus and train fares has stirred concerns among Singaporeans.

Effective from December 23, this fare hike is notably higher than last year's adjustment. To truly grasp its implications, we must analyze the figures and their potential ramifications on Singaporean families.

At first glance, an increment of 10 to 11 cents per journey may appear minor. However, for daily commuters, this amounts to an added expenditure over the month.

Furthermore, the looming possibility of even steeper fare hikes in future adds to these financial anxieties.

When we examine Singapore's adult monthly pass priced at S$128 in relation to its counterparts in global cities such as Taipei, Paris, Hong Kong, Seoul, and London, the results are telling.

Although Singapore’s pass offers a more economical option than London's, it remains pricier than other cities mentioned.

However, it's paramount to consider these figures against disposable income, rather than making straightforward comparisons.

The absence of a minimum wage in Singapore, juxtaposed against established minimum wages in cities like Taipei, Paris, Hong Kong, Seoul, and London, provides a contrasting backdrop.

Thus, the ramifications of this hike on Singapore's lower-income households warrant deeper scrutiny.

While PTC's data suggests the proportion of household income allocated to transportation remains consistent for "average" and "lower-income" households, this can be somewhat deceptive. For illustration, consider a household earning $3,999.

Factoring in the new rates, their estimated public transport costs—for two low-wage adults, two university students, and two senior parents—could potentially constitute 17.2% of their take-home pay. This is significantly above the 1.7%-2.4% average for most households.

Here’s the breakdown:

Estimated monthly transport cost for the family: $470 ([$96 x 2 for low-wage adults] + [$81 x 2 for university students] + [$58 x 2 for senior parents]).

Estimated take-home pay for a household with a $3,999 income, after deducting the typical 37% Central Provident Fund contribution: approximately $2,734.

Proportion of income spent on transport: $470 ÷ $2,734 = 17.2%.

While measures like the Public Transport Fund, offering transport vouchers, are commendable, one wonders if a $50 voucher per household truly alleviates the intensified financial pressure resulting from rising fares.

In essence, the PTC's fare revision, while possibly justified by surging operational expenses and other economic determinants, undoubtedly burdens Singaporean families, particularly those earning less.

As Singapore marches forward, it's crucial that fundamental services like public transport remain both accessible and reasonably priced for all.

For numerous families, every penny is crucial, necessitating policy decisions that recognize and address their multifaceted challenges.