ST June 23, 2008This reminds me of what happened in early 2007. The government was discussing its plans to raise GST from 5% to 7% in July 2007.
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.
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?
39 comments:
How LSS calculate the revenue has to be just an estimate. As the ERP is meant to restrict traffic flow, we do not know what is the result on revenue until after implementation.
Maybe traffic will be severely lessen. In that case more revenus lost.
Or people couldn't care less, like the CTE ERPs where the traffic is still heavy in the mornings. In which case, revenue will go up.
LSS speaks of the revenue generated with such confidence. Truth is, the ERP fees are an experiment in tweaking human driving behaviour. The fees are constantly adjusted to balance between modifying driving behaviour and revenue income. You don't want to raise ERP so high that no one uses the roads. In such a case, the revenue would drop. So the trick is to keep fees high but not too high. You reduce traffic AND get a good income. This is the "profit" way of looking at ERP fees.
BTW, this also explains why ERP has basically only kept the traffic flow constant through the years with no real increase in traffic speed. I believe there is an old post in Mr Wang's blog on this.
Those of us who drives already know this. ERPs over time, will not increase traffic speed as people get used to it.
My personal guess is this: the revenue will be higher than announce. Basically what is happening is the ERPs are sprouting all over the island. In such a scenerio, people start to get used to the idea of paying for road use. Mind numbness and apathy sets in. This would then lead to people not making an effort to avoid ERPs. Over time, more people would simply drive irrespective of the presence of ERPs. Who can keep track of 50-60 ERPs, their different timings and different fee structure? When this happens, revenue would increase.
I already don't bother with planning my route to bypass ERPs. And I expect more people to do the same in the future. Especially if the fees are subsidised by companies.
All of them talks cock while our pockets pok!
Just wondering what is the Singaporean Sheeps' threshold point before something ugly happens.
And Money wasn't lost in bailing UBS, Citibank ,etc,etc.
So I guess The beeping sound is annoying and He is not given transport cover/subsidy for his travel.
Imagine there are at least a million of non millinaire unsubsidised Singaporeans listening to that annoying beep at least twice a day and think the amount of charges per entries and fine for all those who did not top up enough.
Thus Lim sayeth ERP does not make money and NTUC is an Union that protect the wages of it's member, in his dreamy High class life.
No exploitation here.
Just like Mah Bow Tan says petrol tax cannot be reduced because this means increasing the subsidy for petrol. Or HDB flats are heavily subsidised.Do they fork out the money to subsidise? Or the average pay of Singapore workers is $4500 per month. Why also not talk about median pay to show the big income gap?
It insults people that Lim Swee Say said he also pays ERP. Just like Lim Boon Heng said President Nathan is a role model for old Singaporeans to continue to work. You can add more.
Do we have enough of such logic?
If I recall right, Mr. Obsequious Sycophant hip-hopper himself, Lim Swee Say, was campaign manager for PM Lee Hsien Loong in AMK GRC. In a TV interview he was all smirks boasting confidently that the WP unknowns standing against the PM 'would be sure to lose their deposits'. When asked to predict LHL's likely margin of victory, he said with a disingenuous grin "90% ?".
Well, we all know what happened next, don't we? A 33% black eye for LHL and the second lowest percentage of votes of all the GRCs contested by the PAP.
Now would that be the very same person earnestly assuring us that his figures on ERP profit and loss are beyond exception or reproach?
One barrel of salt, please, waiter. I'll take it neat.
Any windfall is purely coincidence like the 2008 budget deficit to surplus
So more subplus next year and more progress package to be given...
We have the 66.6% to thank.
Kaffein
The moment you buy cash cards for the IUs, you already spent the money and the money is in their banks. Be it that you use or don't use the cash in the cards.
With ERP, you are basically transfering money from one point and another point in the same goverment.
So they lose 40million this year. Another year and it more than pays itself off. Like you said, they had a surplus of over 6 billion; its not like they cant afford to spend 40 million, given that they raised their own salaries by an amount totalling in the low tens of millions as well. Their propaganda machine is really pissing me off.
How to trust the pap government figures ? They have been deceiving us for far too long. Now with the internet we know the truth. It is a real pity that after 50 years and for all the pap talk of exhaustive talent search, these are the calibre of people now serving Singaporeans. I am really concerned where Singapore and Singaporeans are heading with these calibre of people right up there.
Read about analysis on
"Government does not make money from ERP? Yeah right."
http://www.sgpolitics.net/?p=264
The answer is the government is openly giving lies and more lies. The tax rebate to 15% only translated $150 dollars to those who own ordinary car and pay $1000 for car tax.
However, $150 is only enough for 1 month of ERP on the whole due to more gantries and increase ERP entry cost. The cost and gantries already more than absorb this rebate and earn profit. As for the rest of 11 months of the year, it becomes a profit generator that other countries never experience before. Uniquely Singapore !
This government is getting worse and audacious as it can now tell lies publicly and shamelessly !
Nowadays when they trot out their arguments for their actions you not only have to take it with a pinch of salt, you literally have to pinch yourself to make sure that you are not in a bad dream and participating in distorted nightmares. The funny thing is they still seem to think that all Singaporeans believe them dishing out all the crap, like the good old days of 'the old media' or now named 'TOC'. And it is almost always the guy with the uncombed hair doing the charming.
Sigh exactly what difference would it make if you increase the number of erp gantries?! You pay 2 bucks for the gantries and if you try an alternative route home you end up having to pay one dollar for this only exceptional erp nearby. Then that's when every driver will flock there until the government decides to jack up that erp's pricing by yet another dollar to form an equilibrium. What's the freaking use then?! Does it really help improve traffic by increasing the number of gantries? Won't there still be clogging of roads as more drivers find alternative routes? I suggest the government bring all gantries of Singapore down, because that way traffic will be easier for there would be a freeflow of free-to-use roads (which would likely to be increased from zero to more than ten) , if not it would be become more and more and more obvious that the government is leeching at the traffic of our cars unnecessarily just for the sake of an increase in annual budget that would not really benefit us as a population as a whole in the first place. Improve traffic? More like taking out money from our pockets and using that as a grand excuse for doing so. Another 'bad dose of government' you see here. Yet no one is learning from it. How nice.
Tell me if this is not a zero-sum game or what?
You get the government you deserve.
Hell, after this, even the SDP sounds competent.
Heck, even Harbans Singh if he were around would be a nice change!
It has been noticed that there are ERP gantries erected at the entrances and exits of most (if not all) of the KPE tunnels.
So, traffic in the KPE tunnels is normal and so far, no traffic congestion is experienced.
Now, let's wait and see how they spin to activate those gantries. At this point in time, they do not mention why the gantries are there. Surprisingly, no one seems to ask why they are there.
ERP at every turn.
GST helps the poor.
ERP is good for businesses.
No subsidies for your own good.
No crutch mentality.
Longevity insurance.
Things fall apart; the centre cannot hold;
Dunno about this one, but I will definitely believe if the government says it does not make money from investments like Shin Corp and those expensive banks they bought.
I think what Lim Swee Say said has a missing bit on its own.
Assuming that if the earnings from the ERP is not to enrich the government, then where do all the monie collected from the ERP goes to?
The Community Chest? Or the old folks who are forgotten and staying in one-room flat?
I HATE THIS GOVT!
THEY ARE LIKE THE PIGS IN ANIMAL FARM!
Quite interesting. While MOH implementing mean testing, LTA did a reverse. They reduce road tax, meaning all car pays the same for ERP. Paying road tax is some sort of mean testing as bigger car pays more and it seems like they are scraping it.
those pap monsters know how to hip-hop!!!
And sing this chorus:
It happens. It's an honest mistake. I'm apalled.
Let's move on!!! And pay me more $$$$!!!!
Mind you, the former Finance Minister, our Prime Minister is a Maths person who loves discrete Maths.
LSS is not a Maths person. So his Maths must suck compared to our darling Prime Minister.
Yeah, the former Finance Minister may be a Maths person, but the budget surplus foul-up not long ago was committed during his watch.
Increased ERP charges sure can come in handy for PAP, given it has suffered an estimated S$16 billion loss since Dec 2007 in major investments in the financial industry.
The following 3 US banks & 1 Swiss bank that GIC & Temasek had invested in since Dec 2007 have the biggest writedowns of global banks affected by the subprime crisis.
GIC & Temasek invested an estimated total of USD27.8 billion.
Since the official press and the very credible opposition "proper" are not taking issue with the losses, let me fill in the gaps:
GIC invested USD11.9 billion in UBS (Dec 2007)
Share price drop from USD48 to USD24.09.
Loss of 50% or USD5.9 billion.
......................
GIC invested USD6.9 billion in Citigroup in (Jan 2008).
Share price drop from USD28 to USD20.40.
Loss of 27% or USD1.8 billion,
......................
Temasek invested 4.4 billion in Merill Lynch (Dec 2007).
Share price drop from USD58 to USD37.55.
Loss 35% or USD1.5 billion.
......................
Temasek invested USD4.6 billion in Barclays (late July 2007).
Share price drop from USD700 to USD326.25.
Loss of 53% or USD2.4 billion.
......................
So as on 18 Jun 2008, and based on share price performance the loss figures are : 5.9 + 1.8 + 1.5 + 2.4 = USD11.6 billion.
This is a 42% loss out of a total investment of USD27.8 billion. Converted to Singapore dollars it represents S$16 billion loss.
PAP will say this calculation is wrong because GIC invested in UBS in the form of a loan that pays a guaranteed annual interest. Sure, we should believe UBS is capable of following through such a deal when it is drowning in severe losses.
What was the rationale of GIC and Temasek for going into these investments? The word "investments" might well be misguided because in the first place they were not meant as investments.
This is because no investors as established and "professional" as GIC and Temasek would fail to understand that they were going in at the worst timing, at the start of the subprime crisis.
So the funds GIC and Temasek put into the 4 banks had a different purpose. Some market experts say it is to promote Singapore as a global financial hub. I suppose that was how other global financial hubs came to achieve their fame by showing how stupid they are in financial management.
If such a reason makes sense to be reported, I am sure we can also think of other reasons as well. Let me try.
PAP is afraid of the big banks that they would do Singapore bourse in through stock market manipulation. Other countries like Hongkong and India are not afraid but they are just being foolhardy. PAP is smarter.
Well after all the US gave the Singapore govt USD1 billion after the Asian Crisis (from Ngiam Tong Dow's book). For what? For good behaviour in obeying the IMF in letting market forces worked themselves out during the Asian Crisis, that is for NOT intervening in the Singapore stock market collapse unlike in Hongkong and Taiwan.
Now that the US and Europe are experiencing their own subprime crisis, why PAP should used the blood and sweat money of the people to help them. After all according to PAP Singapore is such a successful and wealthy nation. Singapore has one of the largest of SWFs (Sovereign Wealth Funds) in the world. Probably 60% - 75% or more of that national reserves is social security money. What is that? Your personal CPF savings lor.
But PAP says this huge CPF savings belong to the state and includes that as part of its national reserves - aka
International Reserves and Foreign Currency Liquidity by IMF - and used as SWF for investment by GIC and Temasek.
[At the just cited IMF page the following under the title is written: "Information to be disclosed by the monetary authorities and other central government, excluding social security". See, this shows that our SWF includes social security i.e. our CPF savings.]
Another fantastic fact about that is "... that GIC and Temasek make their investment decisions independent of each other, and of the Government" - MINISTER THARMAN SHANMUGARATNAM
In other words, PAP as the government does not manage the national reserves given that they have been loaned out to or made used of by GIC and Temasek in any way they think fit.
So if they lose big, you can be sure PAP will adopt the same ploy that Minister Wong Kan Seng used when it comes to determining who is responsible. It is always someone or something else except the minister or the PAP govt. Someone like the Director or Investing in Temasek or GIC. Just fire him and the case is closed. Or simply blame it on the global economy. Is'nt this brilliant?
But what will happen to our CPF savings? Who needs them when according to PAP everyone should work until he/she dies. Retirement shouuld be phased out. But what if you are sick and unable to work? Apply for govt aid enough to see you through 1 meal a day but still you can't touch your CPF savings, if they are still there, that is.
I suggest that on the door of every PAP minister's office the following sign be prominently displayed :
"I get paid the highest in the world but the buck does NOT stop here".
Another sign should be this:
" We suck blood from our own people to help the rich and powerful nations and their failing banks. This is how we can rub shoulders with them. "
LSS made this comments on 22.6.08 during his visit to Fernvale (SengKang)Estate. Before his visit, the open space below Fernvale LRT station was usually full of rubbish like beer bottles, plastic bags and unfinished foods left over by construction workers around the area. Surprisingly, the area was cleaned and cordoned off just days before his visit. Now after the visit, it is back to normal.
" Paying road tax is some sort of mean testing as bigger car pays more and it seems like they are scraping it."
Ironically, who the one that benefit the most ? The rich power and famous ! Why ? They own big cars and get more tax. Now the ministers that says that 15% tax rebate bring loss of $110 millions, and now you wonder how many of the expensive big cars owners contribute to that !
I don't quite follow, can one of you PAP cyber-spy explain it to this serf?
That a ministar pays ERP equates "ERP exists solely to control road congestion and not to enrich government coffers..."
Shouldn't that a ministar pays ERP equates he is just another mortal, since only the gods don't pay ERP?
the logic is quite simple.
if income from ERP gantry less rebates results in deficit $40m, dont build the gantry and save on the rebates. no deficit and everyone is still happy.
unfortunately, when it comes to management/(or wayang-ing) from the gahman, its not really logical at all...
Does not make money my ass..
ERP is double tax for road usage... Unless they abolish road tax totally, no way in hell am I gonna believe that crap he said.
Aiya you know these ministers are just suka citing numbers and people just believe it. End of day like Tartman, they no have to be accountable for unverifiable numbers they pluck from the sky.
Too bad we lack articulate alternatives in parliament to put ministers like Lim to the sword with his remarks.
At the moment, perhaps only Sylvia Lim can table such a motion and question the ruling party over these comments from minister Lim.
As usual, another one of those comments out to divert attention from the rising inflation costs prevailing in SG.
Actually, I believe what Mr Lim said.
However, I believe it is only true for the first year.
Next year, they will make more, but they don't have to tell you how much!
It's the same case for GST. It was a miscalculation on their part that they made a profit in the very first year. :)
>>... Before his visit, the open space below Fernvale LRT station was usually full of rubbish..>Surprisingly, the area was cleaned and cordoned off just days before his visit.
Ha ha..too bad he wasn't made to visit a wet market...else they'll have to make the hawkers washed their hands before any hand shake with the Millon $ MP
WHAT MR LIM SWEE SAY IS RIGHT GOVERNMENT DOES NOT MAKE MONEY.
The money go to their revise salary.IT LEGAL LOL
Only in Singapore, it's alright for the Ministers to miscalculate or make any mistakes for that matter. Though their salaries may be peg to the commercial sector, their accountability and transparency is not?!?!
So what if, further down the line it is reveal that PAP govt has made tons of money from ERP, despite the obvious sufferings cause to commuters and to the general public by way of inflation. Do you think any apology or accountability will come out of them for generally causing hardship.
None whatsoever! They are no going to lose any sleep with their world class million dollar salaries. Not a god-damn wink!
Rather they will have more money to invest away from Singapore and/or to cover some of the multi-billion dollar losses already incurred till date.
(ISN'T IT STRANGE THAT OUR GOVT IS DIVESTING BILLIONS FROM OUR HOME COUNTRY DESPITE THE OBVIOUS ECONOMIC HARDSHIP OF THE PEOPLE.....AND ON TOP OF IT, THESE SO CALL INVESTMENTS ARE FACING TREMENDOUS LOSSES!!!!....... REALLY STRANGE!!!)
The share price of the banks had dropped again (just the beginning only of another storm coming....) :
Merrill Lynch & Co Inc: $33.060
Citigroup Inc: 17.720
::
Wow, look at the rate is going....
And I think it's really going to be a very very very long term investment; provided that the banks remain solvent....
Mr Wang, can put a tracker at your front page so we can see in real time the amount our talented government had "earned" through this investment every minute?
Every once in a while one American bank or another will come out with information on more write-downs of bad loans, and in fact we still don't know how deep is the hole. The information we have now is all in drips, by design, and on cue, probably to prevent panic. The fact that banks are still bleeding from write-downs and looking for massive funds injection doesn't sound conforting.
The whole episode will probably unravel further after Bush steps down and the buck pass on to the next US President who will inherit the burden of settling the mess. Will the next President have the stomach to tackle the issue head-on is another matter. Right now, what the Fed and US Govt are doing is, as someone puts it, act tough, do nothing and buy some time. Buy some time for Bush to finish his term obviously.
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