Singapore’s Water Tariff Hike Demonstrates Poor Accountability and Contains Other Loopholes

Link: http://www.straitstimes.com/singapore/singapore-budget-2017-water-prices-to-increase-by-30-from-july-1-in-two-phases

The most unforgettable piece of news for February 2017 is definitely the 30% hike in water tariffs. Of course, naturally, most citizens are pretty upset and angry over the sudden hike. The government justified their position based on two reasons. First, it has not been adjusted for the past 17 years and this adjustment is to reflect a more updated pricing of water cost. Second, they want to build three more desalination plant in the next three years for a more sustainable water management system and this is a cost that needs to be born by the country. After which, they further claimed that the rationale was also to emphasise the importance of water, yapping away about how precious this resource is to our survival etc etc etc.

The hike may be convincing, but not really justified.

Yes, I do agree that over the years, we have been using water more complacently. It is also inevitable. When life is comfortable, the economy is flourishing and we don’t think much about the broader consequences. The narrative about how fragile Singapore has also begun to shift towards building a more inclusive and compassionate society with opportunities for all to excel. Recently, they have resurfaced racial and religious issues again to maintain their legitimacy but this is a story for another time. My point is once society is more concerned with post-materialist values (liberal values and rights), we tend to slowly ignore things which were once important to us, like water. Hence, it is right that we should re-educate Singaporeans on water conservation.

The way to re-educate Singaporeans on water conservation is through engagement and increasing awareness. Some commentators have claimed that we have tried and perhaps, because it failed, we should move on to sanctions as a form of enforcement. This shows that the water awareness campaign has fundamentally failed. The success of an awareness campaign is determined by the outcome. If Singaporeans are not conscientious enough to use less water, it has clearly shown that the campaign requires some revision. I think most Singaporeans grow up understanding how precious our water resources are, so what went wrong? I argue that not enough emphasis was made by the government or the Ministry of the Environment and Water Resources (MEWR).

Probably after secondary school education, we stopped hearing about how precious our water resources are. There are occasions where the Straits Times post about important water is because our neighbour’s Linggiu river has dried up. My point is, even though it has been brought up, it is not emphasised. The proper measure is to re-educate public with new forms of campaigns, through the use of social media and other creative technologies. We must reinforce the civic mindedness of citizens to be able to think about the collective each time they do something.

Viewed in this light, maybe the intention was good. However, accountability is poor. The mechanism behind the magic number was not revealed. There was not many concrete statistics to back this up either.

Now, the government claimed that domestic consumptions account for 45% of our total water demand. This means that 55% comes from non-domestic sectors. The former refers to the water we use at home – washing machine, drinking, bathing etc. The latter refers to infrastructure (swimming pool), manufacturing, F&B etc.

Singapore invests heavily in its infrastructures as we can see from the never-ending construction – MRT and facilities. The infrastructure industry also uses a huge amount of water. Cement mixtures require water. The washing of tools, vehicles and roads require an immense amount of water which cannot be easily quantified. We all have seen how construction sites use water. Their water consumption possibly one of the highest within the non-domestic sector.

The PUB and MEWR predict that water demand from the non-domestic sector will gradually increase in future. With the view that government have been increasing their investment in infrastuctures, this trend seems to be consistent. It is also therefore quite safe to say that domestic usage of water will not be the main cause of any water shortages in future. The risk will increasingly lie on non-domestic sectors. To prove this, we can see official statistics that our annual domestic water consumption per capita has been decreasing with an exception in 2015 which had an insignificant increase (link). Hence, it is not home users that will pose a risk to water shortages in future, it is the non-domestic sectors. Aware of this, the government introduced the NEWater tax and a slight increase in tariffs for both NEWater and industrial water.

One issue that must be highlighted is our inability to 100% harness the rainwater. We always get plentiful of once-in-50-years flash floods which prove that our drainage system is not optimal. More work could be done to improve it. Perhaps more money could be spent to invest in investigating and designing a better drainage and storage system for rainwater.

Seemingly, it is a convincing case for the hike. But is it justified?

The consequences of raising water tariffs have been severely downplayed by the government. The link here predicts that for 75% of the household, we will see up to an $18 hike monthly. This seems pretty affordable at first sight. However, what has not been discussed about is the cost of living. There are simply too many spillover effects.

Consumers ultimately bear the costs of the tariff hikes which means a permanent increase in standard of living. The reason is obvious, everything requires water. Beverages like coffee and tea, which can be considered the staple of the working Singaporeans, will also increase in pricing. Cafeterias and Cafes will also have to adjust their prices. Since washing of dishes and cups require water, food prices generally will also be affected as well. Soup, curry and gravies use water. So does bread and cakes.

Similarly, when the cost of production in the manufacturing increases, goods manufactured will also be more expensive. Ultimately, this could hurt sales and exports because of the higher cost, unless the company is agreeable to a lower profit margin.

This is a period where our economy is not doing very well. I feel uncomfortable with such adjustments because it seems detrimental to the health of our economy and morale of our citizens. Furthermore, it would also seem that wage growth will be much slower, it will take a long time before our wages match up to the rise of cost of living. The figure “30” is a number that regardless how one adjust his lifestyle, he will definitely end up having to incur a higher cost of living.

The 30% water tariff increase may be a convincing case but it is not at an inappropriate time.

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