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[QUESTION] SBS getting taxpayers' money: Is it justified?

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Old 10-07-2012, 10:45 AM   #1
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Question [QUESTION] SBS getting taxpayers' money: Is it justified?

Honest question. Hope someone can explain to me.

SBS is public listed, so basically they get their money from investors right?

So how can they receive taxpayers' money for their company? By that account, won't it be the same for other companies to get access to taxpayers' money to upgrade their services/products?

Or did I miss something here? TIA.
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Old 10-07-2012, 03:40 PM   #2
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Smile Reasons why SG Govt $1.1billion bus services $$$ injection is justified.

Reasons why SG Govt $1.1billion bus services $$$ injection is legally justified.
Thread: [QUESTION] SBS getting taxpayers' money: Is it justified?
Honest question. Hope someone can explain to me.
SBS is public listed, so basically they get their money from investors right?
So how can they receive taxpayers' money for their company? By that account, won't it be the same for other companies to get access to taxpayers' money to upgrade their services/products?
Or did I miss something here? TIA.
The SG govt has apparently used the MRT argument to support its $1.1B bus enhancement scheme.
AFAIK, MRT hardware is owned by SG govt: trains, tracks, stations etc etc, but SMRT is the company hired to run the svc: they provide for maintenance, drivers, security, run the service etc etc and then keep some of the profits subject to meeting some performance quality standards that the LTA (aka Mr Lui Tuck Yew) sets it, shareholders gain under optimal conditions where standards are met.

So the LTA has since used the same logic for bus services: U see, people who use buses are generally poor... otherwise, with the exception of the env. conscious, would have chosen pte car/ taxi as their choice mode of tpst, but with Singapore's world record population density, then the roads would be super clogged... so govt has to ensure that public tpst remains affordable despite the increasing fuel costs which if SBS/SMRT were to pass directly to consumer, would mean costlier bus fares all round... but the PAP cannot allow this bc many SG citizens don't earn enough to afford expensive bus fares (20% increase expected by this estimate)(they will all return to bicycle transport to save costs and perhaps increase the road casualty rates if they are not proficient cycling (some cleaners earn only $600 p.m., n need to support a family on that salary too; govt medical expense will increase with increase in road casualties occurring) etc).

Being pte/ public listed is thus no obstacle to receiving this cash n hardware injection worth S$1.1Billion in so far that the contract details are spelt out and remains the property/ investment of the SG govt. The bus company cannot sell the inventory for profit and in fact shall be bound by performance standards to which a penalty may be imposed for under performance.

Likewise, many SGporeans receive medisave top-ups which can be used at both public and private hospitals (e.g. Raffles, Mt.E) and perhaps even abroad (Johore hospitals)- it remains a subsidy usable within certain limits for a defined purpose, the status of the hospital (pte vs public/ public listed) NOT being of significant limitation.

In conclusion, Singapore has developed much since the days of being a small fishing colony and as such, Singapore government services (aka control) now spans various services and industries- being privately owned / even publically listed is per se, no longer a limitation to receiving government subvention in so far as it's purpose remains focused upon the public good.
-------
PS: Me am no legal expert, but this is my take.
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Old 10-07-2012, 03:42 PM   #3
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Honest question. Hope someone can explain to me.

SBS is public listed, so basically they get their money from investors right?

So how can they receive taxpayers' money for their company? By that account, won't it be the same for other companies to get access to taxpayers' money to upgrade their services/products?

Or did I miss something here? TIA.
Official response:
------------
S$1.1b bus services scheme not for operators' profit: Lui Tuck Yew
Date : 09 July 2012 2135 hrs (SST)
URL : S$1.1b bus services scheme not for operators' profit Lui Tuck Yew - Channel NewsAsia

SINGAPORE: Minister for Transport Lui Tuck Yew on Monday said the implementation details of the S$1.1 billion Bus Services Enhancement Programme (BSEP) to ramp up bus capacity over the next five years have largely been sorted out.

He said this in Parliament, as he proposed the necessary amendments to give the Land Transport Authority (LTA) powers to roll out the programme, in a second reading of the amendment bill.

Under the proposed amendments, LTA will be given a new function to implement programmes, such as the BSEP improve public bus services provided by the public transport operators (PTOs) and other bus operators licensed by the Public Transport Council (PTC).

This includes giving LTA the powers to coordinate the routes and scheduling of bus services provided by the operators.

The BSEP will be supported by the Bus Services Enhancement Fund where LTA can provide loans and grants to operators to purchase buses, and to finance the operating expenditure they incur under the BSEP.

Mr Lui said the first of the 550 buses under the BSEP will go on the roads in September. Details of the new routes and improvements made to existing services will also be revealed then.

The minister said the new buses to be introduced over the next one year will allow service levels to improve for at least one in three existing bus routes and introduce about 14 new routes. He said the PTOs expect to hire about 360 new bus drivers from now until the end of the year.

Mr Lui also said the government will not preclude that the BSEP in its current form may need to be adjusted, supplemented or even replaced, stressing that it is only prudent to allow a legislative flexibility be built in so that the government can respond in a timely manner to any necessary changes.

He also addressed a wide range of concerns raised by members of parliament including the use of tax payers' monies to fund the programme.

Some raised concerns about the potential abuse of funds and wanted to know what sort of accountability will be imposed on operators. Others were also concerned that the operators may deploy the government-funded buses on less profitable routes, while using their own buses on profitable ones.

In his maiden appearance, newly-elected Hougang MP Png Eng Huat added that a clear message should also be sent to operators.

"We must send a message to these operators that it will not be business as usual after the gifting of the 550 additional buses that comes complete with drivers and full maintenance. Because at the end of the day, the commuters should the one smiling and not their shareholders," he said.

Pasir Ris-Pungggol MP Dr Janil Puthucheary said: "Some of these concerns are inflammed as a result of misinformation, some of which may be deliberate. The key points that no profit will be made as a result to the BSEP, that the assistance it provides to the operators will be calibrated and adjusted to ensure this is so needs to be explained and discussed."

Responding to these concerns, Mr Lui assured Parliament that the BSEP was not intended to profit the PTOs.

"I know there are concerns, there are fears, but the way we want to use this money is to make sure the commuters benefit from having more reliable, more frequent, less crowded buses," he said.

"Certainly, the intent is not for this government to give money to the operators in order to fatten their bottom line. Not all all."

- CNA/wm
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Old 10-07-2012, 03:48 PM   #4
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Socialising the costs, privatising the profits, that's all that it is.
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Old 10-07-2012, 04:02 PM   #5
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In other words, our government is going to pump money into the public bus services to make them more reliable and sufficient/efficient. Our money is used to help PRIVATIZED organizations now. Great policy indeed! (Faint)
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Old 10-07-2012, 04:51 PM   #6
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Smile Toxic financial debt instruments, a greater public moral hazard than public bus service cash i

Toxic financial debt instruments, a greater public moral hazard than public bus service cash injections.
Thread: [QUESTION] SBS getting taxpayers' money: Is it justified?
Socialising the costs, privatising the profits, that's all that it is.
True that this is cost socialization, but I guess it would be unfair to say that profits are being privatized unless one knows what the accounts of SBS/ SMRT will look like in future.

The worst e.g. I can think of for the problem U said is that of retail banks in the USA (e.g. Citibank, BOA etc)- these banks were (and AFAIK are still) allowed to use bank deposits to speculate in dangerous derivative instruments which are mostly high risk (long term; but with potentially good short-term returns).

Why retail banks in America were allowed to use customers $$$ to gamble in such dangerous derivatives such as collective debt obligations (CDOs)- I have really no idea except to say that the government is probably being run/ financed/ bribed by bankers.
The 2008 Lehman crisis was basically about CDOs revealing their true colors of being toxic (irrecoverable) debt (Lehman had US$600Billion worth acc Wiki) which besides Lehman, other retail banks also held resulting in massive bank bailouts by the US government to prevent massive economic mayhem as people all over America would run on banks upon suspicion that their banks had 'invested' their savings in 'toxic debt' and might not be able to repay its liabilities to its depositors.

Pre-Lehman 2008, bankers were of course richly rewarded as they further inflated the US property bubble through CDOs that they packaged and sold as 'investment grade products'.

According to 'The true cost of the bank bailout' [PBS,03Sept2010]: "According to a team at Bloomberg News, at one point last year the U.S. had lent, spent or guaranteed as much as $12.8 trillion to rescue the economy."

In the context of Singapore, my firm belief still stands that the best way to improve the lives of citizens in SG is to advocate bicycle use as a viable means of transport in Singapore since it is nonpolluting and a wonderful means of getting exercise- too bad that the greater is the population density in SG, the more desperate the govt becomes to 'improve public transport' just to keep up with the demands of both citizens and foreign talents and tourist alike, not to mention that the bicycle is quite immune to any fuel cost inflation besides reducing health care costs for its users as exercise is preventive against heart disease and cancer.

Guess rather than labeling the SG govt's $1.1billion dollar bus services fund injection as "cost socialization", perhaps a better question would be what the cost to Singaporeans would be if local/ foreign retail banks operating here (e.g. : POSB, DBS, UOB, OCBC, SCB, BOI, Citibank, HSBC, UBS) like those of the US were allowed to invest its depositors savings in risky assets for the purpose of high returns resulting in the need for MASSIVE bailouts to prevent bank runs when the economy sours.

PS: some other numbers I haven't yet crunched are at 'Total Wall Street Bailout Cost' [Sourcewatch (last update July2011)]
PS: Nothing that I've just written negates the fact that S$1.1billion is indeed a large amount, and in as far as cycling remains a good option, more discussion is necessary as to the terms and conditions of the S$1.1Bil cash injection.

[pict source: Criminal Cartel Moves Forward With Printing $500 Billion In Funny Money]

[pict source: Dear Ben, Please Print Us More Money]

[Source: Hyperinflation In Zimbabwe]
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Old 10-07-2012, 05:44 PM   #7
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I am expecting a return of 1.1B from SBS over 10 yrs based on their stupid logic..................
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Old 11-07-2012, 10:48 AM   #8
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Reasons why SG Govt $1.1billion bus services $$$ injection is legally justified.

The SG govt has apparently used the MRT argument to support its $1.1B bus enhancement scheme.
AFAIK, MRT hardware is owned by SG govt: trains, tracks, stations etc etc, but SMRT is the company hired to run the svc: they provide for maintenance, drivers, security, run the service etc etc and then keep some of the profits subject to meeting some performance quality standards that the LTA (aka Mr Lui Tuck Yew) sets it, shareholders gain under optimal conditions where standards are met.

So the LTA has since used the same logic for bus services: U see, people who use buses are generally poor... otherwise, with the exception of the env. conscious, would have chosen pte car/ taxi as their choice mode of tpst, but with Singapore's world record population density, then the roads would be super clogged... so govt has to ensure that public tpst remains affordable despite the increasing fuel costs which if SBS/SMRT were to pass directly to consumer, would mean costlier bus fares all round... but the PAP cannot allow this bc many SG citizens don't earn enough to afford expensive bus fares (20% increase expected by this estimate)(they will all return to bicycle transport to save costs and perhaps increase the road casualty rates if they are not proficient cycling (some cleaners earn only $600 p.m., n need to support a family on that salary too; govt medical expense will increase with increase in road casualties occurring) etc).

Being pte/ public listed is thus no obstacle to receiving this cash n hardware injection worth S$1.1Billion in so far that the contract details are spelt out and remains the property/ investment of the SG govt. The bus company cannot sell the inventory for profit and in fact shall be bound by performance standards to which a penalty may be imposed for under performance.

Likewise, many SGporeans receive medisave top-ups which can be used at both public and private hospitals (e.g. Raffles, Mt.E) and perhaps even abroad (Johore hospitals)- it remains a subsidy usable within certain limits for a defined purpose, the status of the hospital (pte vs public/ public listed) NOT being of significant limitation.

In conclusion, Singapore has developed much since the days of being a small fishing colony and as such, Singapore government services (aka control) now spans various services and industries- being privately owned / even publically listed is per se, no longer a limitation to receiving government subvention in so far as it's purpose remains focused upon the public good.
-------
PS: Me am no legal expert, but this is my take.
Thanks for the reply, but I'm still confused. Even the CNA article didn't answer the query.

From the way you said it, SBS is more or less the secretariat that is administering the government-owned fleet of transport. I sincerely doubt that is the case. But if it is, wouldn't it be more fair for SBS to be paid a sum of their service (in managing the fleet), instead of exploiting the fleet completely to maximize profit? Furthermore, in this case, shouldn't such profit be returned back to the government (as the fleet owner) instead of the shareholders?

But I think that is not the case. SBS is a private company (though publicly listed). However as $1.1bil of taxpayers' money was pumped into a company, shouldn't that be counted as the taxpayers' investment, and we - as taxpayers - should be getting a slice of the profit?

Not looking to debate. Just, honestly, trying to make sense of this. Because I'm afraid that this $1.1b injection is kinda like our own banking crisis, where companies "too big to fail" can suddenly get government gifts. At the citizens' expense.
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Old 11-07-2012, 02:26 PM   #9
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Thanks for the reply, but I'm still confused. Even the CNA article didn't answer the query.

From the way you said it, SBS is more or less the secretariat that is administering the government-owned fleet of transport. I sincerely doubt that is the case. But if it is, wouldn't it be more fair for SBS to be paid a sum of their service (in managing the fleet), instead of exploiting the fleet completely to maximize profit? Furthermore, in this case, shouldn't such profit be returned back to the government (as the fleet owner) instead of the shareholders?

But I think that is not the case. SBS is a private company (though publicly listed). However as $1.1bil of taxpayers' money was pumped into a company, shouldn't that be counted as the taxpayers' investment, and we - as taxpayers - should be getting a slice of the profit?

Not looking to debate. Just, honestly, trying to make sense of this. Because I'm afraid that this $1.1b injection is kinda like our own banking crisis, where companies "too big to fail" can suddenly get government gifts. At the citizens' expense.
Actually, U could also say that the PAP is the one that is getting too big to fail... ppl taking bus to cast votes at elections have to smell FT armpits, of course will not be in a good mood... so hopefully the S$1.1billion will do some wonders over the next 5 yrs... thereafter? I dunno.

Anyhow, maybe my cost breakdown at S$1.1Billion bus services cash injection, shouldn't commuters expect a 12.1% decrease in bus fares? might help.

Whatever the case, I still believe that nothing beats cycling for its energy efficiency, good exercise and overall green consciousness, parking and fuel price costs inflation resistance. Singapore should stop giving every excuse under the sun for its high carbon footprint just to keep its GDP pumped primed with steroids cos there are many better things to do in life than to just focus on GDP: religion, philosophy, green consciousness etc, etc.

Rgds,
C6.

BTW, the following is the board of the PA, a core branch of the civil service, u have PAP ppl all over, so nobody pls tell me that the PAP doesn't keep civil service on a super, uber tight leash- the civil service is like tiny beef in the center of a hamburger, flanked on both sides by the top heavy PAP (the PAP MP/ wanna be MPs flank the other end of the PA as advisers to grassroots!)

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Old 11-07-2012, 03:13 PM   #10
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Honest question. Hope someone can explain to me.

SBS is public listed, so basically they get their money from investors right?

So how can they receive taxpayers' money for their company? By that account, won't it be the same for other companies to get access to taxpayers' money to upgrade their services/products?

Or did I miss something here? TIA.

SBS and SMRT is it same company?
I only know TS holdings own largest shares in SMRT ~

and TS holdings is owned by who?
Is consider our national Investment Firm right?
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