The Government Does Not Make Money From The ERP Increase. So Says Lim Swee Say.

Lim Swee Say claims that the government will not make any money from the ERP increase.

ST June 23, 2008
Govt doesn't make money from ERP
THE CashCard reader in labour chief Lim Swee Say's car beeps four to six times a day. This is because he passes through that many Electronic Road Pricing (ERP) gantries along busy city roads to get to and from work.

He was driving home the point that ERP exists solely to control road congestion and not to enrich government coffers or raise the cost of living for Singaporeans.

Mr Lim was responding to a question at a dialogue on why the Government was raising ERP rates by as much as $2 and adding five new gantries from July7 in a climate of rising inflation.

The new gantries along the banks of the Singapore River bring the total number of gantries islandwide to 65.

Mr Lim said Transport Minister Raymond Lim had told Parliament previously the Government does not make any money from the ERP increase.

The reason: It will collect $70 million a year from the ERP increase, but will lose $110 million due to the 15 per cent reduction in road tax from next month.

That is, in fact, a net loss of $40 million, he said.

This reminds me of what happened in early 2007. The government was discussing its plans to raise GST from 5% to 7% in July 2007.

Back then, the Finance Minister had said that even with the GST increase, the government would suffer a $700,000,000 budget deficit. In other words, the government estimated that even with the GST increase, it would collect $700,000,000 less than what it actually needed, to run the country.

Many Singaporeans were thus persuaded that the GST increase was a necessary evil.

But what happened next?

One year later, it was revealed in Parliament that the government did not have any budget deficit for the 2007/2008 financial year. Quite the opposite - it had a huge budget surplus of $6.45 billion dollars.

In other words, the government had collected $6.45 billion dollars more in taxes than what it actually needed to run the country. The people got suckered again.

For more details, refer to my old post here.

So when Lim Swee Say tells you that the government won't make any money from the ERP increase (and will in fact suffer a $40 million loss), take it with a pinch of salt. Or maybe three big tablespoons of it.

The last time round, our Finance Minister missed his Budget estimate by $7,100,000,000. In percentage terms, what makes you think Swee Say will do any better?

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Up, Up And Away - The ERP Takes Off

Two years ago, I wrote a post entitled Money & Material Things. I mentioned then that I lived in a HDB flat, did not own a car and did not plan to.

Two years later, I still live in the same HDB flat, still do not own a car and still do not plan to. Relatives have given up asking me why Mrs Wang and I, two quite successful & established professionals, do not even aspire to move to a condo or own a humble secondhand car (Mrs Wang is a lawyer).

There are a few reasons. One is that a car is largely unnecessary to our lifestyle. Our HDB flat is two minutes away from an MRT station, which is extremely convenient. Also, the nature of our professional backgrounds means that our offices will almost certainly be in the CBD, and it is quicker for us to get to the CBD by train than by car. Furthermore CBD driving has its own problems, including higher parking costs, heavy road traffic and ERP costs.

Another reason why we don't want to own a car is that in Singapore, car ownership just makes you a rather easy victim for the government's Pay-&-Pay policies.

ST June 17, 2008
ERP charges up at 32 CBD gantries from July 7
Five more new gantries coming up along Singapore River
By Maria Almenoar

THE roads are getting pricier from July 7. Five new gantries, forming a cordon along the Singapore River Line, will go live to regulate the evening traffic flow from 6pm to 8pm, bringing the total number of gantries to 65.

In what is seen as the most extensive revision of Electronic Road Pricing (ERP) here since its implementation 10 years ago, another 32 gantries in the Central Business District (CBD), including those around Orchard Road, will also have their charges increased.

Rates are being revised mostly during the evening time slots because speeds have fallen steadily during the home-rush hours.

The Government is going to fix this by doing three things.

The biggest change is that if you pay, you will get to enjoy a smooth flowing ride - which is not always the case now.

Motorists can expect to pay as much as $1 more at existing gantries and $2 at new gantries ....

The above changes are going to cause some loud howls of protest among the public, considering the price of oil nowadays and the inflation situation. Actually, if you had plans to destabilise our society, raising fees at 32 ERP gantries would be a positive first step in the right direction.

(P.S That was just my way of saying that the Transport Minister has a very bad sense of timing. But since I do not drive, I shall not comment any further. Car-driving readers may now proceed to the comment section of my blog).

(P.P.S I invite my driver-readers to share some details of their lifestyle (for example, how often they drive, and from where to where) and also how much they spend on car-related expenses. It might be interesting for such readers to compare notes).

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Bird Talk

I don't really care. It's a non-issue to me personally, since I don't drive. Still I found this quite hilarious.

ST Oct 22, 2007
ERP helps more S'poreans to own cars: Minister

THE use of Electronic Road Pricing (ERP) has made it possible for more Singaporeans to own cars.

Responding to a question for written reply in Parliament on Monday, Transport Minister Raymond Lim said this is reflected in the growth of Singapore's car population from 680,000 in 1997 to 800,000 in 2006.

[So according to Raymond, the government implemented ERP, therefore more people bought cars. Muahaha, what nonsense.]

Dr Fatimah Lateef, MP for Marine Parade GRC, had asked the Minister if the ERP scheme has met the objectives that it was meant to achieve and if it has improved the traffic flow on expressways especially during peak hours.

In his reply, Mr Lim said since its implementation in 1998, ERP has been effective in maintaining average travel speeds on priced roads within the optimal speed range through regular reviews and rate adjustments. For example, average speeds on the expressways have remained at above 45km/h during peak hours.

Read that again. Slowly. What Raymond is really saying is that since ERP was implemented in 1998, average travel speeds on priced roads have stayed the same. Despite regular increases in ERP charges and the number of ERP gantries, there has been no improvement whatsoever in the average travel speed.

"The use of ERP to manage traffic has made it possible for more Singaporeans to own cars than we otherwise could, and our vehicle population has grown from 680,000 in 1997 to 800,000 in 2006," he added.

"It has also allowed the Government to rely more on car usage charges and less on car ownership taxes to manage traffic demand, and as a result, vehicle ownership taxes have been reduced."

So instead of paying more money to own a vehicle, you pay more money to use it. Is that a real difference? The last time I checked, money is money - even if the government modifies the way it takes the money from you.

Incidentally the increase from 680,000 to 800,000 cars over nine years works out to a per annum rate of less than 2 per cent. This is probably a lot lower than the growth of Singapore's resident population over the same period (don't forget the huge increase in the number of foreigners coming to work and live in Singapore, over that period).

That's actually quite positive news, from the environmental perspective.

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