Govt subsidies have been increasing to make up for higher public transport operating costs & lower revenue growth: S Iswaran

Keeping Singapore’s public transport system world-leading is an increasingly expensive undertaking. But the Government will keep providing subsidies to Singapore’s commuters, especially the less well-off.  

Transport Minister S Iswaran said in Parliament on Sep 13 that from 2012 to 2021, operating costs for public transport increased by 7 per cent per year on average.

“This was not matched by revenue growth. Consequently, Government subsidies have been increasing,” he said.

The Government currently subsidises public transport services by more than S$2 billion annually, or S$1 for every journey, Minister Iswaran said.

He was replying to MP Liang Eng Hua (Bukit Panjang), who asked about how the Government determines the current subsidies and whether it will consider reviewing this in light of rising costs.

“There is a cost in providing public transport. There is revenue that comes from the fares that commuters pay. And if the two do not meet, someone has to pick up the slack. And the slack, in general, has been picked up through Government subsidies,” he explained.

He added that the Government has committed over S$60 billion to expand and renew the rail network such as the Cross Island Line over the next decade.

A vital system

Singapore’s public transport system is vital for keeping the nation connected. Commuters took about 8 million trips every day on it pre-Covid — for work, for school, for social purposes — and this number is returning as the nation goes forwards.

The Government’s efforts have resulted in a system which promotes economic activity, reduces road congestion and emissions as well as contributes to sustainability and the liveability of our city.

“Over the last decade, we have steadily enhanced the public transport system, with attendant increases in cost. Commuters have benefited from a 40 per cent expansion of the rail network, 80 new bus services, reduced peak hour waiting times for basic bus services from 30 to 15 minutes, as well as significant improvements in rail reliability from 67,000 to over 1 million mean kilometres between failures,” he said.

To keep this excellent system going for future generations of commuters, the Government will continue to fully fund the expansion of public transport infrastructure.

Addressing needs of the vulnerable

“As with other subsidised services, the Government has to consider how best to share the cost between users, and current and future generations of taxpayers. There are three key aspects,” said Minister Iswaran.

First, the Government continues to fully fund the expansion of public transport infrastructure as these are large lumpy expenditures; second, finding ways to economise and get value-for-money; third, a fare formula to ensure that commuters pay a fair share of the costs.

A fare formula, recalculated regularly against for wages, energy and inflation, is in place.

However, he added that the Government will continue to support Singaporeans with greater needs and fewer means.

“We keep fares lower for concession groups such as seniors and students and provide public transport vouchers to low-income families.”

Public transport vouchers, too, are an issue that the Government takes “very seriously”, said the Minister. He referenced the 600, 000 such vouchers distributed during the 2021 fare increase, especially for low- and no-income earners.  

“Up to 40 per cent of Singapore’s households will be able to benefit from those public transport vouchers. And we will make sure that we continue to address the needs of these vulnerable segments through an appropriate provision of such public transport vouchers,” he concluded.