Dear Editors

I refer to the Budget speech that was delivered in Parliament on 20 February. According to the Straits Times report “Singapore Budget 2017: Water prices to increase by 30% from July 1 in two phases” – “Water prices will increase for the first time in 17 years, Finance Minister Heng Swee Keat said on Monday (Feb 20).

Including taxes, the prices will go up by 30 per cent in two phases. The first hike will be from July 1 this year, and the second from July 1 next year. But lower and middle income households will get help to manage the increase.” I watched the entire Budget speech live on Channel NewsAsia. There was no mention of what is the projected increase in revenue from the 30 per cent increase in water prices? As to “Water prices were last revised in 2000, almost 20 years ago. We need to update our water prices to reflect the latest costs of water supply,” Mr Heng said in the 2017 Budget speech in Parliament. The price increase will go towards maintaining Singapore’s water infrastructure, and more expensive sources of water such as desalination.

Singapore has invested in desalination and Newater plants which are “costly but necessary” investments, Mr Heng said” – there was also no mention of what the increased costs’ figure is – to justify the price increase. With regard to “The increase will be less than $25 per month for three-quarters of businesses, and less than $18 for three quarters of households. But after subsidies, 75 per cent of HDB households should see an increase of less than $12 a month in their water bills. Households in one-room and two-room flats will not see any increase in their bills, Mr Heng said.

They will be receiving U-Save rebates of up to $380 for the year, an increase of $120 from $260. Three-room flat households will get a $100 U-Save rebate increase, four-room flats $80 and five-room flats $60. Executive and multi-generational flat households will get $40 more. These increases are permanent and will cost an additional $71 million a year. About 880,000 HDB households will benefit” – we know for sure that the permanent U-Save rebate increase will cost the Government “$71 million a year”.

So, there was no revenue figure, no costs figure (to justify the increase), but there was a figure as to how much more it would cost the Government to give the rebate increase (to help offset the price increase). As an analogy, it may be akin to telling you that I need to charge you more because it cost me more, but I will help you by giving you a rebate – but I never tell you how much more I will receive from the price increase or how much more it is costing me – but I can tell you how much more it will cost me to give you the rebate.

A strange way to deliver a Budget? Don’t you find that this may be a rather strange way to deliver a Budget? What do you think? So, does it mean that the cost of 15 cubic m of water a month in Singapore after the 30 per cent price increase announced today – may have increased even further to about 14 times Hong Kong’s and nine times Taiwan’s? (“Water: S’pore cost 10 times more than Hong Kong?“, Feb 8)

In the final analysis, will the increase in water prices be passed on to consumers by businesses?

Leong Sze Hian

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