I am going to set
up an eatery business. With no doubt, you have to pay for the food and beverage
that you have ordered. The price of what you’ve paid would go towards the
payment of the rent for my eatery, the cost of ingredients, the maintenance of
the eatery stall, the labour and of course, contribute to my profits.
However, on top of
the price of the products that you consume, you have to fork out part of your personal
savings too, to pay for the tables and chairs that you have to eat at and to
sit on and not forgetting the cooking equipment too.
When I run out of
cash flow, don’t demand to know why is that so in spite of yielding yearly net
profits from my business, I do not have sufficient cash to send my cooking
equipment for regular maintenance checks, therefore you have the responsibility
of subsidizing me further for the maintenance of my eatery as the increasing
number of patronage is stressing out the hardware of my eatery!
When operating and
ingredient costs increase, expect a price hike. You expect wage increase every
year don’t you? And so do my kitchen staffs! Although I pay them more or less
the same wage as in the 90s and continue to source outside the country for
cheaper labour to exploit.
If the gas cooker
broke down due to excessive usage, you have to bear with me and don’t expect
any discount in price for the food but expect longer waits than usual. Yes, you
have to pay more to get inferior service.
You cannot
patronize another eatery because, as you are already made aware, that I am the
only provider around.
Do you find that
reasonable for a consumer to stomach?
Think along the line of SMRT and SBS Transit’s way of conducting business.
Privatizing profits and socializing costs
SBS Transit yields
yearly NET profits between 2004 to 2010. Between 2003 to 2009, net profits are
growing steadily and peaked at $54.2 million in 2010, despite “increasing
costs” and growing population/commuters.
Year/net profit ($m)
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
|
50.9
|
39.6
|
34.6
|
19.0
|
49.2
|
51.3
|
56.1
|
50.0
|
40.5
|
54.6
|
54.2
|
(Compiled from the
Annual Financial reports of SBS)
It is always expected
of the public to foot the bill for rising operating costs and fuel costs…..so
as to safeguard the minimum ceiling of profits for such private companies.
But the Dec 2011
NE line broke down saga exposed the fact that corners were cut in track
maintenance. And there has been no substantial increase in the wages of our
transport workers. (I remember clearly before 1995, a bus driver was already
approximately 2K gross salary per month; 3K inclusive of allowances, as I was surprised
to know that the pay, inclusive of allowance, surpassed that of the starting
pay of a Arts faculty graduate. In 2011, Tan Chuan Jin made known that bus
drivers earn a 2K gross per month. )
Price hike to
cover operating or what-so-ever costs were just another way of maintaining the
same profit margins and any shortfall shall be borne rightly by the consumers.
Now, the public has
to share the burden for capital assets purchases too.
A privatized
company is entitled to profit taking. No one would challenge that.
But how much of
that profit should be forked out from the public’s purse?
Where is the fine line between public and private?
When the security
at the train depot was breached in 2010, our minister
(here) reiterated that it is “not fair for taxpayers to pay for the security of all
these profit-making companies”. Simply, the responsibility of security in the
public area was passed on to the profit-making SMRT, despite knowingly, train
stations and trains come under the public domain in every sense. Otherwise, how
else would one explain the presence of anti-terrorism officers patrolling train
stations and trains?
Yet, $1.1billion
was budgeted from the public funds in 2012 to purchase capital assets for SBS,
which is also a private company, to improve the ever deteriorating bus
services. As we can see from the chart above, SBS is making yearly INCREASING
NET profits between 2007 to 2009 against a backdrop of “increasing operating
costs and fuel costs” and increased ridership due to the influx of immigrants.
Increased ridership fattens the profits of this company at the expense of
commuters, having to compete for limited space with new commuters. Even in 2010
when SBS’s profit did not increase, it however maintained in the higher bracket
of its profits.
$1.1 billion will
be injected into this private company whilst the net profits will retain among
its shareholders.
Where do we draw
the line then, between what should be rightly public and what should remain in the
private pockets of the few individuals?
