Is the Government not being truthful with the expected increase of water prices?
By Terry Xu on February 24, 2017
Finance Minister, Heng Swee Keat said in the Budget 2017 speech in Parliament, “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,”
He noted that the water prices including taxes, will go up by 30 per cent in two phases. The first hike will be from 1 July this year, and the second from 1 July next year. Highlighting that the price increase will go towards maintaining Singapore’s water infrastructure, and more expensive sources of water such as desalination.
So just 30% increase?
price increase
But if one were to look at the projection of price increase, one should note that apart from the increase of tariff on water, the Water Conservation Tax also increased by 20% and 15% for usage under and beyond 40 cubic metre.
The Waterborne Fee has been adjusted up 228% increase with the removal of the Sanitary Appliance Fee.
These increases were clearly not mentioned in Mr Heng's speech, he merely emphasised that the water prices will be increased 30%.
So when TOC wrote to PUB to seek more clarification on the increase earlier this week, it wrote back stating, "Potable Water Tariff, Water Conservation Tax and Waterborne fee will go up in two steps, in Jul 2017 and in Jul 2018. Do visit our website for more details on the water price revision and find out more on how you can save water."
In PUB's further clarification to TOC's query, it stated that for households who use less than 40m3, the Water Conservation Tax (WCT) currently at 30% of water tariff will go up to 50% in July 2018. The WCT for water usage beyond 40m3, will be raised from the current 45% to 65% in July 2018.
The 30% as mentioned in the Finance Minister’s speech refers to the final price of water (which comprises Water Tariff, WCT and Waterborne Fee), i.e. ($2.74 - $2.10)/$2.10 = 30%.
The disproportionate increase of water prices
So now, what some may not realise is that while Mr Heng said in his speech that the price will be a 30% increase by 2018, the increase may not be that simple as what Mainstream Media and Government have been trying to make it sound.
Why is the projected increase not a flat rate of 30% as what the Finance Minister put it to be?
If one were to look at the costing, one will notice that the Sanitary Appliance Fee is a fixed cost based on how many toilet fittings that a residence has. The new pricing schedule removes this fixed cost and absorbs it into the Waterborne fee. What was previously $0.28 per cubic metre is now $0.92.
continue reading here :
http://www.theonlinecitizen.com/2017...-water-prices/