Public transport: A fair-minded review

SINGAPORE - Treating public transport as a social good requires making it accessible and affordable to commuters at large, particularly the more vulnerable members of society.

In taking that road, the public transport Fare Review Mechanism Committee reflects the need for new thinking to make society more inclusive even as economic disparities pull in the opposite direction.

Transport, a necessity that could account for a substantial part of expenditure in lower-income households, must form a central part of that new thinking.

The committee has taken a radical step in the direction of change by recommending that the Government subsidise bus and train fares for low-income workers and the disabled.

Tracking a broader range of commuters to ensure that fares remain affordable for lower-income households is a key initiative of the panel in its attempt to find a carefully weighted pricing formula that will benefit more Singaporeans.

The precise components of that formula, based on percentile groups, might be beyond average commuters, but there is no doubt that the committee has tried hard to find an equitable baseline on which to build its case for fare concessions for more passengers.

If the Government accepts its proposals, a wider spectrum and a larger number of commuters - 1.7 million, up from 1.2 million today - will benefit.

But radicalism does not go far without realism. Hence, the panel has emphasised correctly the need to maintain the financial health of the public transport operators so that the travelling public can enjoy better and competitive service in the long run.

It has suggested that the fare formula should include a new energy index that would better reflect costs, plus an inflation component that excludes home and car prices since these items are not relevant to public transport.

The energy index is important since fuel and electricity costs comprised 23 per cent of the operators' expenses in 2011, up from 16 per cent in 2005.

Reflecting these expenses in the composition of the fare formula is only being fair to the operators, who have no control over energy prices in a way that they do over their own productivity, for example.

Even so, the panel has veered to the left in recommending that operators must share gains from future fare increases with the needy. The focus is on benefiting the lower- income group.

Financing these changes will require deciding how far the Government should fund them and how much should be borne by those paying full fares.

The state no doubt is the ultimate underwriter of social schemes, but these will have to be supported by taxes. Greater equity will come at a price, but it is worth paying as the economy changes gears.

Get a copy of The Straits Times or go to straitstimes.com for more stories.