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Water price hike a key concern at post-Budget forum

SINGAPORE — The impending increase in water prices was a key issue raised at a post-Budget forum yesterday, with participants voicing concerns over whether rebates would help to mitigate the higher costs, as well as the trickle-down effect that the hikes would have on prices of other goods, such as coffee and tea.

Water price hike a key concern at post-Budget forum

Senior Minister of State Indranee Rajah and Minister of State Sam Tan at the forum yesterday. Ms Indranee said that measures such as the U-Save (Utilities-Save) rebates would lessen the cost burden on households following the hike in water prices, which was announced in the Budget on Monday. Photo: Robin Choo

SINGAPORE — The impending increase in water prices was a key issue raised at a post-Budget forum yesterday, with participants voicing concerns over whether rebates would help to mitigate the higher costs, as well as the trickle-down effect that the hikes would have on prices of other goods, such as coffee and tea.

Attended by about 120 members of the public, the forum — organised by public feedback unit Reach — was the first such exercise held since the Budget was unveiled on Monday.

Since the Budget statement was delivered, REACH has received more than 1,000 items of feedback through its platforms, with the top three concerns raised being the water price hike, support for young families and the personal income tax rebate.

Taking the first three questions from the participants who touched on the water price hike, before the session was closed to the media, Senior Minister of State for Finance and Law Indranee Rajah, who chaired the session, reassured them that the U-Save (Utilities-Save) rebates, which the Government will be giving out, would lessen the cost burden on households.

She noted that those living in one- and two-room flats will not, on average, see any increase in their monthly water bills, while families staying in three-room flats and above will see, on average, an increase of about S$2 to S$11 in their monthly water charges.

Announcing the Budget on Monday, Finance Minister Heng Swee Keat said water prices will rise by 30 per cent from July 2018, with the first of two rounds of water price hikes to kick in this July.

Addressing the trickle-down effect that the water price increase would have on the cost of other goods such as coffee and tea, Ms Indranee stressed that the cost of such goods “should not and ought not” go up.

She noted that, currently, firms are charged S$2.15 per cubic litre for the portable water that they use, and after the full water price hike kicks in next year, this will go up to S$2.74 cents, an increase of 59 cents. This, she added, would have very minimal impact on the price of coffee and tea.

Speaking to reporters, Ms Indranee said that there is a need to price water based on market realities, to take into account the cost of producing water, such as manpower and infrastructure cost.

“When you get the right pricing and you just charge that completely down the line, obviously there will be people who are affected and who may not be able to afford it,” said Ms Indranee.

“So, what you do is you step in, you intervene and you assist, which we have in this case done with the U-Save rebates.”

However, some participants, such as 65-year-old retiree Teo Yeok Tee maintained that it is unfair to impose an increase across the board on the basis of wanting to encourage water conservation because there are households which do conserve water.

Others, such as Madam Chen Li Ying, 49, agreed with the move which would help to ensure a sustainable supply of water.

“But I think the Government could spread out the increase over three years instead of two years. This will really soften the blow for households, especially those struggling financially,” she added.

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