Singapore could face another round of inflation if firms raise wages
By May Wong, Channel NewsAsia | Posted: 09 July 2008 2154 hrs

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	Related Videos Singapore could face another round of inflation if firms raise wages

SINGAPORE : Finance Minister Tharman Shanmugaratnam has warned that Singapore could face another round of inflation if companies increase wages to help workers cope with the higher cost of living today.(if raising wages is not a solution to growing inflations, what is? GST credits? Workfare Income Scheme?

to be exact, the increase in wages proposed by the companies is actually not an increase at all.

e.g. we have 7% inflation in 2007
so as suggested by the Finance Minister Tharman

0% wage increase

is it right to say that is actually

= 7% depression of pay

and its not like we don't know that most Singaporeans are living from paycheck to paycheck and having little or no personal savings, aside from the leaky forced retirement saving plan: the CPF.)

He said this will also affect Singapore's competitiveness and the ability to create jobs.(if a particular company is raking in record profits in a booming economy in 2007, i can't see whats wrong with rewarding. perhaps the Finance Minister's worry is Singaporeans might grumble and blame the government for wage stagnation.....which is actually indeed the government's fault from this article itself.)

Mr Tharman was speaking to some 500 workers at the Singapore Industrial and Services Employees' Union dinner on Wednesday evening.(yada yada...what Union? NTUC you mean? sometimes i wonder why Singapore's unions....oh sorry i meant union since there's only 1... looks after the government's interest more than the workers' it was set up to protect)

Higher rice and oil prices have led some Singaporeans to call on the government to set the tone by raising wages.(which is why Singapore unions are pretty much useless. the workers have to fight for their own rights, not the unionists.)

But Mr Tharman said such short-term measures are not prudent. Instead, he said the government has provided assistance to help Singaporeans deal with the higher cost of living. (yes GST credits and Workfare Income Scheme is so useful thank you. now who is the employer? the company or the government?)

These include S$500 million in GST Credits - to help citizens cope with the increased Goods and Services Tax - and special bonuses for senior citizens. (are senior citizens even working at all?

lets say we split

$500 million among 2 973 091 citizens, each citizen gets $168. $168 over 12 months = $14 increase per month

wow $14/month pay increase...thanks i guess i don't need any pay increase from my company)

Mr Tharman said Singapore also addresses the problem of inflation mainly through its exchange rate policy. Since the beginning of last year, the Singapore dollar has appreciated by 11 per cent against the US dollar.(this is assuming all our trade goes through the US...i suppose products made in China, Taiwan, Japan(electronics, automobiles...), Thailand(garments), Europe(electronics, handphones...) are handled in US$?

for his info, Singapore Dollars didn't do much strengthening actually. it is the US$ who dropped instead. e.g. European Dollars strengthened a lot against the US$)

However, the minister said there is a limit to how much Singapore can allow its dollar to rise to fight inflation. Mr Tharman said if Singapore dramatically strengthens its dollar to offset the higher prices, it will instead hurt economic growth badly.

He said oil prices have increased by 50 per cent since the start of this year. And it has gone up by about 100 per cent compared to a year go. Food prices globally are now up to 60 per cent higher than one year ago.

Mr Tharman cautioned Singaporeans to brace themselves as oil prices may increase further.

He said, "We expect inflation to be between 5-6 per cent on average this year, with inflation being lower towards the end of the year. We also expect inflation in the second half of the year to be lower because the effects of last July's GST increase on inflation will wear out.

"However, the recent sharp increase in global oil prices will add pressure on inflation. So we are monitoring this and the impact on inflation closely, and will decide if inflation forecasts for this year need to be revised." (so what happens if Inflation rises to 10% this year? are we going to get more GST credits and Workfare Income Scheme?)

Looking at the global situation, Mr Tharman said the weakness in the US economy could extend into next year. But he maintains that Singapore can expect Gross Domestic Product growth to average between four and six per cent this year. (GPD doesn't reflect very well on how the citizens are coping...especially with the Finance Minister himself personally telling companies not to raise wages...)

Mr Tharman said the lasting solution to inflation is to continue with efforts to help workers upgrade their skills and earn better wages. (is the Ministry of Finance going to pay for my bill and feed my family while i go for a 6 months upgrading course?)

He said it is also important to help experienced, mature workers stay employed and help home-makers get back to work. This will not only increase the household income, but help improve Singapore's tight labour market.(mature? 45 onwards he mean? the reality of Singapore is the older you get, the more dispensable you are. especially when that China or Indian young man can do your job twice as fast for half your pay)

- CNA/ms

PTC tweaks formula for adjusting public transport fares
By Imelda Saad, Channel NewsAsia | Posted: 10 July 2008 1609 hrs

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	Related News • Analysts favour new fare formula as inflation is taken into account Related Videos PTC tweaks formula for adjusting public transport fares

SINGAPORE: Another round of public transport fare hikes is likely this year, but commuters can expect the rise to be cushioned by a new fare structure formula.(why does the so-called formulas always effect in an increase in charges?

are they formulated for the interests of the commuters or for the operator?

a fare hike an adjustment of price again...

will they rake in HUNDREDS OF MILLIONS again this year?)

One group of commuters who stands to benefit are those who make multiple transfer journeys.(while the majority who make only 1 transfer to their destination have to pay more)

Currently, a commuter incurs what is called a transfer penalty every time he boards a new bus. To offset this, the commuter is given a 25-cent rebate each time he switches from bus to bus, or bus to train.

But this rebate does not fully offset the jump in fares. To address this, a distance-based through fare system will be introduced by 2009.  (a distance-based fare system is the most ideal form of charging instead of the flawed formula the operators has been using over the past 40+ years)

But for now, Singapore's Public Transport Council (PTC) will look into increasing the transfer rebate to close the gap.

Singapore's Transport Ministry says about four in ten commuters currently make transfer journeys on a weekday.

With the new through fare structure, commuters can take as many buses and trains to their destination without being penalised with a higher fare.(did he mean the 2009 distance-based system or this new "formula"?)

Changes will also be made to the fare adjustment formula, which will see the public transport operators share their productivity gains with commuters. (with the HUNDREDS OF MILLIONS of profits charting in their annual reports, "sharing gains" probably referred to the investors and not the commuters.)

This means the maximum annual fare adjustment will be capped at 3 per cent instead of the higher 4.2 per cent under the old formula.(a raise is still a raise. basically they probably meant they will charge 3 percent more each year.)

The formula is pegged to macroeconomic factors - namely changes in the Consumer Price Index and average monthly earnings. The formula has been in place since 2005 and valid for three years. (what is the formula components in details?)

The revised formula will be applicable for five years, instead of three, to give commuters and operators more certainty in fares.

The PTC was quick to point out, though, that the maximum annual fare cap of 3 per cent does not determine the actual fare adjustment.

Whether a commuter's bus fare will go up by more than 3 per cent or less, or whether a commuter actually stands to save money, will depend on the distance travelled and the number of transfers made in a journey. (meaning, in most cases, most commuters won't save money because most will just fail their "depend" conditions.)

Simply put, if a commuter takes long bus and train journeys with many transfers, he will see a net reduction. But he will probably end up paying more for short trips. (meaning most single trip commuters are using the additional 3% fare hike to pay for the "increased rebates" enjoyed by multi-trips commuters)

Public transport operators are expected to submit their applications for a fare review in August.

The PTC will decide on the actual adjustment in September and new fares will kick in in October.(meaning an increase is inevitable. it is just how much. also, commuters can dream on about the PTC fighting for their rights.) - CNA/ir