Free public transport

I read about the idea of increasing GST in order to offer free public transport to Singaporeans on phishie’s blog. Not really sure where he read that from since there’s no reference.

While most of his reactions are psychological and behavioral (what beeping of gantries, sound of doors and students taking space on free trains), I’m more concerned with the effects of such a policy. Firstly, how much GST increase will we need to actually cover the costs of transport operators? What if we actually need to change GST to 50% in order to cover the costs? Then this wouldn’t be feasible at all.

So I did a quick search and found the following.

SBSTransit operating costs (2007): $616,686,000
SMRT operating costs (2007): $625,600,000
Total “public transport” operating costs (2007): $1,242,286,000
GST revenue estimate for FY2007 (at 7%): $4,850,000,000
Total Goods and Services taxed: $69,285,714,286
Total GST needed to cover “public transport”: $6,092,286,000
New GST: 8.79%

Of course these are estimates and do not include all costs such as future expansion costs that need to be borne by this scheme. Their dates corresponding to these figures are not properly aligned as well. Also, with the opening of the circle line, it means such operating costs will increase significantly. Therefore it is possible that the GST % can move up another 1-2% in the next 2 years.

But let’s say we also have a corresponding increase in GST revenue due to increased spending over this period, and we manage to keep the GST at 9%. Whether it benefits an individual will depend on two main factors: public transport expenditure vs GST taxable expenditure. A Singaporean might spend $2 per trip to get to work currently, and therefore spends about $100 per month. With the new scheme, he pays $0. For him/her to benefit, his/her increase in GST paid should not exceed $100. Since the increase is 2%, the person’s GST taxable expenditure must be kept below $5,000.

Sounds perfectly reasonable, as most people should be spending below that amount per month (earning below that?). And if another person has a short-trip, direct-bus and costs him/her $50 in transport per month currently, a spending of $2,500 per month will break even with this scheme.

Secondly, the beneficiaries of these schemes are COMMUTERS. So if a person do not take public transport (e.g. walk to work), they will be totally hit by the GST hike. In fact it does not make it better even if they change their job to commuting-based, since commuting will be free. So how many lower income people currently have jobs that just require them to walk from their home? Or they work from home? How can they be assisted?

Maybe our Department of Statistics have the numbers for these (which I might try to find if I have this urge again). Maybe it’s worth for the majority of people (who are commuters) to bear the increase than to transfer them to these non-commuters. Or if the correlation between income and number of people taking public transport is a normal distribution, why not use an increase of 0.5% in income tax to pay for public transport?

This response comes from a person with zero economics knowledge or public policy background. Views expressed are entirely personal. Critiques welcome.

Nasi Lemak

More pictures of the escaped terrorist appeared all around the island.

Pillars, walls, notice boards, even the exit doors of buses.

It looks alot like an election already.

Am I supposed to vote for him?

Or will he sit around and say “Silence! I keel u!”

Too much money for lawsuits

I just read this article, where Apple develops auto-volume control, which I thought was a weird feature. I found out after reading that it was due to some funny guys who file funny suits, including:

  • iPod causes hearing damage due to setting it at high volume
  • iPod scratches too easily
  • iPod battery life too short

A little absurd to have the product enforce such rules, I felt. They were looking for features that were not part of the original product design. And it was not as if the product didn’t allow you to reduce the volume. The material used for the product was likely the product team decision, often a balance between cost and quality. A stronger material might have made the product cost beyond their target audience. You can choose not to buy it if you don’t like the material, I doubt its an life essential product…

Think of what I could have filed:

  • Sue iPod lookalikes for their inferior quality, lack of volume limit also.
  • Sue Macdonalds for not controlling overweights by limiting the amount of food each person can buy.
  • Sue Dell for short battery life that default battery given cannot last 2 days.
  • Sue Toyota for using low quality for car material, resulting in car scratch on every contact with pillar or other vehicles.
  • Sue Nokia for bundling its default calendar/organizer software with the phone OS.

Sue whoever say there’s a red hohoho Santa Claus for fraud. And if Santa’s for real sue him for trespassing chimneys.

Cat A COE falls below $6K

Its all over today’s news: The COE for Cat A (small size cars like Getz) has fallen from $11,489 to a mere $5,200. Cat B also fell about 50% and Cat C remained at $1. But I still can’t afford a monthly loan of $400++. So…. I shall just continue watching and drooling.

Pre-GST hike’s GST hike

It means, raising prices due to GST hike, BEFORE the announcement of the GST hike. The businesses seem to be rather confident the government is going ahead with the hike, and many raised their prices at the start of 2007. Macdonald’s breakfast upped 30 cents from $5 and $5.30. A fish-filet meal now costs $5.30, and Big Breakfast $5.60. Ya Kun stuck a statement beside its cashier, added 20 cents to its menu, and pushed its Set A to $3.90. Even my Kosong Prata went from 50cent to 60cents, effectively a 20% increase.

I know its hard to sell prata at 51cents each; I just hope it won’t become 70 cents after the Budget Day.