23 June 2015

Public Transport Fund Has More Money Than Needy Households

700,000 seniors (citizens and permanent residents) were recently given the SG50 Seniors Public Transport Vouchers.

The $50 vouchers were funded by the Public Transport Fund, which in turn is funded by contributions by the Government and the two public transport operators ("PTOs"), SBS Transit and SMRT.[1]

Was it right, or even appropriate, for the Government to use the Public Transport Fund for this purpose?

History of Public Transport Fund
One of the  earliest references to a Public Transport Fund was in 2004, when then Minister for Transport Yeo Cheow Tong said in Parliament that NTUC and the Community Development Councils ("CDCs") had set up a Public Transport Fund with financial contributions from the PTOs.[2]

Later that year, then Minister for Community Development, Youth and Sports Vivian Balakrishnan said that the PTOs, together with NTUC Club, Singapore Labour Foundation and the CDCs, had set aside $6 million in a Public Transport Fund which would be used to help pay for public transport expenses of school-going children from low income families.[3]

In 2007, then Second Minister for Finance Tharman Shanmugaratnam announced that the Government would commit $10 million to a Public Transport Fund in October 2007, to be disbursed over three years to provide lower-income households with financial assistance for public transport.[4]

Note that up to that point in time, reference was to a Public Transport Fund, not the Public Transport Fund.

The Government committed another $7 million to the Public Transport Fund in the 2009 Budget to bring it to $10 million to ensure that it was sufficient to fund public transport vouchers for all low-income households who needed assistance. That was the first time in a Parliament debate that the Government referred to the Public Transport Fund with the article "the" instead of "a".[5]

Fines imposed on PTOs for regulatory breaches were put into the Public Transport Fund, according to Minister for Transport Lui Tuck Yew.[6]

In its October 2013 report, the Fare Review Mechanism Committee recommended that:

"To help needy families cope with fare adjustments, the PTC [Public Transport Council] could mandate that the PTOs contribute a share of any fare adjustment granted to the Public Transport Fund. PTOs that are more profitable should be required to contribute more. In a sense, this means that the PTOs are made to share their gains with commuters. To close the loop with commuters, proceeds from financial penalties imposed on the PTOs' service lapses should be channelled to the Public Transport Fund. In addition, the Government should continue to co-fund the Public Transport Fund together with the PTOs."[7]

Mr Lui agreed that the PTC should take into consideration the Fare Review Mechanism Committee’s recommendation for the PTOs to make one-off contributions from the fare increase they received to the Public Transport Fund. Together with the fines imposed on the PTOs for regulatory breaches, the Public Transport Fund will be sizeable enough to allow for not only more generous public transport vouchers to be given to all needy households affected by any fare increase but also other uses as determined by the PTC.[8]

Earlier this year, Mr Lui said that the PTOs would contribute $13.5 million to the Public Transport Fund pursuant to the 2014 Fare Review Exercise. Up to $7.5 million would be used to provide 250,000 Public Transport Vouchers of $30 each to needy families. Mr Lui said that the Government already had plans for the remaining amount in the Public Transport Fund, in response to suggestions that a special transport voucher be given to all Singaporeans, especially the Pioneer Generation members, to commemorate SG50.[9]

Which Public Transport Fund?
Although a public transport fund existed prior to 2007  inasmuch as references were made to a Public Transport Fund, rather than the Public Transport Fund — the Public Transport Fund, as it exists now, was set up in 2007 when the Government committed $10 million to it.

Who Controls The Public Transport Fund?
It is not clear which Government department or statutory board has control and/or oversight over the Public Transport Fund.

A Government press release in 2011 on the $30 Public Transport Vouchers was issued by the Ministry of Transport, the then Ministry of Community Development Youth and Sports (as it was known before it was restructured and its functions divided), and the People's Association.[10]

A Government press release last year on the $30 Public Transport Vouchers was issued by the Ministry of Transport and the People's Association.[11][12]

Mr Lui added that "it would be up to the PTC to decide how else to use the [Public Transport] Fund beyond what it is today".[13]

Which entity has authority over how the moneys in the Public Transport Fund may be used?

Which entity is accountable for how the moneys in the Public Transport Fund are used, and to which other entity is it accountable?

The Public Transport Fund doesn't seem to have an independent legal existence similar to that of funds such as Community Care Endowment Fund (commonly referred to as ComCare), Medical Endowment Fund (MediFund), ElderCare Fund and Pioneer Generation Fund, all of which were set up by acts of Parliament. Perhaps, it exists only as a book entry in the accounting records of a ministry or statutory board; but which ministry or statutory board?

The PTC does not publish its audited financial statements on its website.

The People's Association stopped publishing its audited financial statements on its website after its auditors repeatedly qualified its accounts with an adverse opinion because the audited financial statements of its grassroots organisations (of which there were 1,803 as at 31 March 2011) were not available and the auditors were unable to assess the financial impact arising from the non-inclusion.[14]

Changing The Objectives
The Public Transport Fund was set up to provide financial assistance to needy households for their public transport expenses.

Was it right, or even appropriate, for the Government to use the Public Transport Fund for the 700,000 SG50 Public Transport Vouchers for citizens and permanent residents over the age of 60 years, when many, if not most, of the recipients were unlikely to have been considered to be needy by any stretch of imagination?

Have the Ministerial Committee on Ageing and the Ministry of Transport forgotten or misunderstood the objective of the Public Transport Fund?

If the ministry or statutory board that has control and/or oversight over the Public Transport Fund was considering what to do with the "surplus" or "remaining" moneys after giving out the $30 Public Transport Vouchers to needy households, perhaps it should have been, or should be, more generous especially with the more needy households or the non-qualifying needy households at the margin.

It doesn't seem right to use the Public Transport Fund — irrespective of whether it is "surplus" or "remaining" moneys — for the SG50 Public Transport Vouchers when its objective is to help needy households with their public transport costs.

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Notes

1. MINISTRY OF TRANSPORT SG50 Seniors Public Transport Voucher May 2015.

2. SINGAPORE PARLIAMENT REPORTS (Hansard) 12 Mar 2004.

3. SINGAPORE PARLIAMENT REPORTS (Hansard) 16 Nov 2004. 

4. SINGAPORE PARLIAMENT REPORTS (Hansard) 15 Feb 2007.

5. SINGAPORE PARLIAMENT REPORTS (Hansard) 22 Jan 2009.

6. SINGAPORE PARLIAMENT REPORTS (Hansard) 5 Feb 2013.

7. THE FARE REVIEW MECHANISM COMMITTEE REPORT Oct 2013.

8. SINGAPORE PARLIAMENT REPORTS (Hansard) 11 Nov 2013.

9. SINGAPORE PARLIAMENT REPORTS (Hansard) 13 Feb 2015.

10. MINISTRY OF COMMUNITY DEVELOPMENT, YOUTH AND SPORTS, MINISTRY OF TRANSPORT and PEOPLE’S ASSOCIATION Extension Of Application For Remaining Public Transport Vouchers Government Press Release 7 Oct 2011.

11. MINISTRY OF TRANSPORT and PEOPLE’S ASSOCIATION 79,000 Applications For Public Transport Vouchers In First Four Days Government Press Release 7 Mar 2014.

12. MINISTRY OF TRANSPORT and PEOPLE’S ASSOCIATION 250,000 Public Transport Vouchers To Help Needy Families Cope With Fare Adjustment Government News Release 21 Jan 2015.

13. SINGAPORE PARLIAMENT REPORTS (Hansard) 11 Nov 2013.

14. PEOPLE'S ASSOCIATION Annual Report 2010/2011.


This article was updated on 23 June 2015 at 9:45 am.

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