Monday, 6 March 2017

Looking at water price increase in perspective


Update 27 Mar 2017: Water price hike ‘absolutely necessary’ but should been explained better: PM Lee
“(Water is) crucial to Singapore’s safety (and) existence. It’s fundamental to our survival,”

He reiterated that water is a strategic issue & a matter of national security – right from the beginning when the nation came into existence, & even until today.

“It’s one of the things which (Singapore’s founding Prime Minister) Mr Lee Kuan Yew used to be obsessed with right from the beginning & right to the end of his life,” said PM Lee.  “And as a nation, we have to maintain his attitude towards water - the attitude that has brought us here. We got water security now because of our obsession. And by keeping this focus, we can stay secure into the future.”

Even though Singapore has developed the 4 “national taps” - local water catchments, water from Johor Baru, NEWater and desalinated water – Singapore “will never have ‘more than enough’ water”, Mr Lee stressed.

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PM Lee invokes his dad, Lee Kuan Yew, in justifying water price hike

Prime Minister Lee Hsien Loong invoked his late father Lee Kuan Yew in justifying why raising the price of water was “absolutely necessary”. Speaking at a ceremony to mark the completion of the makeover of the Pang Sua Pond in Bukit Panjang, PM Lee pointed out how his dad was obsessed with water security for Singapore throughout his political life.
“It’s one of the things which (Singapore’s founding Prime Minister) Mr Lee Kuan Yew used to be obsessed with right from the beginning and right to the end of his life. And as a nation, we have to maintain his attitude towards water – the attitude that has brought us here. We got water security now because of our obsession. And by keeping this focus, we can stay secure into the future.”
Last month, the Government announced a 30 percent increase in the water price – to be phased in over two years. A huge public outcry followed the government announcement. PM Lee acknowledged that the Government should have spent more time explaining the rationale for the hike and what it would be doing to help households cope with it.

The Government’s Feedback Unit, REACH, said recently that a minority disagreed with the Government’s decision to increase water prices. The Government explained that the increase in water prices was to fund the higher costs of water production and to encourage water conservation.

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Lee Hsien Loong on 30% raise in water price

Prime Minister Lee Hsien Loong brought out his deceased father’s name to garner support:
“It’s one of the things which (Singapore’s founding Prime Minister) Mr Lee Kuan Yew used to be obsessed with right from the beginning and right to the end of his life. And as a nation, we have to maintain his attitude towards water – the attitude that has brought us here. We got water security now because of our obsession. And by keeping this focus, we can stay secure into the future.”
Lee Hsien Loong then blamed the unpopularity of the 30% water price hike to Singaporeans being ignorant. The Prime Minister said that he should have spent more time “explaining” to Singaporeans, otherwise Singaporeans would not have been so “surprised”:
“Before announcing the water tariff hike last month, the Government perhaps should have spent more time explaining the rationale and what it would be doing to help households cope. By doing so, people would not have been so surprised.”
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DPM TEO’S SIMPLE EXPLANATION CLEARS THE FOG

From the outset of the announcement of the water price hike, ministers and Members of Parliament (MP) have tried to explain to the public the rationale behind the move. Unfortunately, the more they tried to shed light, the darker the clouds became.

The public outcry shows that the public is not convinced by the answers given to their questions. The problem is that there were too many reasons given, some so technical that they flew over the heads of many. Others were nonsensical, as the one given by Lee Bee Wah, MP for Nee Soon GRC.

Hers was among the first explanations reported by the media where she said the hike was necessary “to bring up the awareness” of the value of water. The reaction from the public was swift, and their rebuttal was simple: is increasing the price of water the only way to raise awareness of how important water is?

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DPM Tharman scratches head during another ‘kee-chiu’ type lecture of Minister Chan’s
Minister Chan Chun Sing, who spoke in a rather halting manner about how “water is existential” to Singapore

Minister in the Prime Minister’s Office, Chan Chun Sing, on 1 March lectured parliament that water is an ‘existential’ issue for Singapore. Touching on the Budget 2017 announcement that water price will go up by 30 per cent over two years, he said, “I can understand the angst of our people with the water price increase … how it will feed through to the cost of living.”

He then went into a “kee chiu” kind of speech he gave when he was introduced as a PAP candidate in 2011. In emphasising that water is ‘existential’ for Singapore, he said that when he was in primary school, he was taught that Singapore had three reservoirs, and asked Members if they knew how many reservoirs Singapore now had.

Deputy Prime Minister Tharman Shanmugaratnam can be seen scratching his his head.

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Water Price Revisions 2017

Water prices will be revised from 1 July 2017. Tariffs will go up in two steps, in July 2017 and in July 2018. Water prices have remained unchanged since 2000.

Heavy investments in water infrastructure, coupled with rising operational costs, have made the increase in water prices necessary. We are upgrading our water system to make it more resilient, especially to face the challenges posed by climate change. The revised water prices will enable PUB, the National Water Agency, to cater to future demand, strengthen Singapore's water security, and continue to deliver a high-quality and reliable supply of water.

The water price goes towards meeting the cost of water treatment, reservoir operations, NEWater production, desalination, used water collection and treatment, and the maintenance and expansion of the island-wide network of water pipelines.

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Lee Hsien Loong 1 March at 21:41

The water price increase has triggered sharp reactions from Singaporeans. Two ministers – Chan Chun Sing and Masagos Zulkifli – spoke about this in Parliament yesterday. They explained why water is an existential issue for Singapore, and why this price increase is unavoidable.

Singapore is an island, yet we are one of the most water-stressed countries in the world. We have enough water today only because of our unremitting efforts since independence. For us, water will always be a strategic resource, and a matter of national security. The Pioneer Generation knew this. So do the generations of servicemen and women who have defended Singapore.

In this situation, we have to price water properly. Then every time we turn on the tap, we are conscious of how precious each drop is. We last revised water prices in 1997 – a long time ago. Since then we have developed NEWater. We have also invested in desalination, which is cheaper than before but still expensive. We need to build more NEWater and desalination plants. That is why the cost of producing water has gone up, and tariffs must rise.

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Price hike debate should remind S’poreans of water’s importance: PM
In a FaceBook post on Thu, Mr Lee reiterated comments by several ministers in recent days that water is a "strategic resource, & a matter of national security" for Singapore. Foto: www.freeimages.com

Addressing a growing public debate about the Government’s move to raise water prices by 30%, PM Lee Hsien Loong & Finance Minister Heng Swee Keat said the Republic has to price water properly in order to be able to continue investing in new infrastructure that would maintain a reliable supply.

In a FaceBook post on Thu (March 2), Mr Lee reiterated comments by several ministers in recent days that water is a “strategic resource, & a matter of national security” for S'pore.

“The Pioneer Generation knew this. So do the generations of servicemen & women who have defended Singapore,” he added. “In this situation, we have to price water properly. Then every time we turn on the tap, we are conscious of how precious each drop is.”

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PM Lee: See water price increase in perspective
File photo of Bedok Reservoir (Yahoo Singapore)

Prime Minister Lee Hsien Loong said Thursday (2 March) that the 30 per cent increase in water prices should be seen in perspective.

In a Facebook post, Lee acknowledged that the issue has triggered “sharp reactions” from Singaporeans.

But as mentioned by Minister for the Environment and Water Resources Masagos Zulkifli, Lee said that many households will get more U-Save rebates.  For 1- and 2-room HDB households, they will not see any nett increase while for most other HDB flats, the nett increase will only be between $2 and $11 per month, Lee added.

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Look at water price increase 'in perspective': PM Lee

Following sharp reactions from Singaporeans, PM Lee Hsien Loong has said people should look at the increase in water prices "in perspective".

In a FaceBook post on Thu (Mar 2), PM Lee said tariffs must rise as the cost of producing water has increased.

"We have also invested in desalination, which is cheaper than before but still expensive. We need to build more NEWater & desalination plants," he said.

related:
Defer water price hike, relook help for middle class, say MPs
Budget 2017: Water prices to rise by 30% over 2 years

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Water must be priced fully as it's a matter of national security, says Masagos

S'pore will have to depend more on desalination to meet increasing water demands, as there is a limit to recycling used water in the NEWater plants.

While housing, healthcare & education are subsidised in S'apore, water has to be priced fully as it is a matter of national security, and consumers “must feel the price of water” to realise its value, said Minister for the Environment & Water Resources Masagos Zulkifli on Wed (March 1).

But even with the impending 30% hike in water prices, the price of water here will fall short of the long-run marginal cost (LRMC) — which is the increase in cost over the long run from rising production, said Mr Masagos, who was speaking in Parliament during the debate on the Budget statement.

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Water prices to rise in drive to boost Spore's water security

Water is set to cost more here, as S'pore seeks to ensure long-term water security in the face of uncertain weather conditions.

An increase in water prices will be announced at the upcoming Budget, said Minister for the Environment & Water Resources Masagos Zulkifli. The country has also been making further moves to increase its desalination capacity.

The price increase will help ensure the reliability of the country's water infrastructure, as well as support reliable but more expensive sources of water like desalination.

related:
Water a critical asset that must be priced right, say ministers
Water prices going up: Reduce your water usage with these tips

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What you're not hearing about the 30% increase

At the Budget 2017 announcement, there were many important points raised by Finance Minister Heng Swee Keat, & we'd like to talk about as many of them as possible. But S'poreans seemed fixated on just one issue - the price of water.

And it's not surprising, when you think about it. Just like water makes up 70% of a human body, many S'poreans think "the 70%" are to blame for this newly announced price increase of 30%.

Knowing that the increase would be significant, Environment Minister Masagos tried to cushion the blow by announcing much earlier in the month that there would be a water price increase. But even then, I don't think anyone expected such a significant increase.

related: How to save water after Budget 2017's announcement of water price hike

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Trying to make sense of water prices hike and the “national security issue”

In respect of “It is therefore urgent that water is priced right to moderate demand from businesses and households, while also building infrastructure to ensure Singapore has a secure water supply, he said.

“We hope that through right pricing, everyone will cultivate the habit of water saving as part of Singapore’s DNA, whether we are a household or business,” he said” – why not give incentives to the people to reduce water consumption, instead of raising prices, since historically – price increases do not seem to have had any significant impact on water consumption.

As to “Ms Joan Pereira (Tanjong Pagar GRC) said residents and businesses were taken aback by the announcement, which was made with “no prior public consultations”” – since the matter is so crucial – why not have a quick consultation exercise of say three months to gather suggestions and feedback to address this so called national security issue?

related:
False justifications for water price increase
Reply to Prof Ng's response on false justifications for water price

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Here's how the government justified the 30% water price hike
It is to reflect water's true scarcity value

The S'pore government, as announced by Finance Minister Heng Swee Keat during Budget 2017, will raise water prices by 30% in 2 phases

The hike will commence from July 1, 2017, with ain increase of less than $25 per month for three-quarters of businesses once the increase is fully phased in on July 1, 2018.

During the Budget 2017 debate, Minister for the Environment & Water Resources Masagos Zulkifli explained that the reason behind the decision is to reflect the water’s true scarcity value.

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Masagos: Consumers must realise how valuable water is
Environment Minister says water is a "national security issue"

Water prices were increased substantially to reflect its true scarcity value, Minister for the Environment & Water Resources Masagos Zulkifli told Parliament yesterday.

As MPs debated the Budget for the 2nd day, he addressed the hot topic of the tariff hike announced by Finance Minister Heng Swee Keat on Feb 20.

Mr Heng had said the price of water will go up - the 1st increase in 17 years - by 30% in 2 phases, starting from July 1, to pay for more costly methods of obtaining fresh water from seawater and get people to conserve water.

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Public uproar over water price hike not quelled despite PM Lee wading into it

The public uproar against the 30 percent hike in water prices was not quelled despite the Prime Minister wading into it. Prime Minister Lee Hsien Loong linked one of his Minister’s speech in support of the hike to his Facebook and explained why water has got to be priced properly.

He explained that the price hike has got to be viewed from the perspective that many households will receive subsidies to help them cope with the rise.
“We should see the 30% increase in perspective. Many households will get additional U-Save rebates. So 1- and 2-room HDB households will not see any nett increase at all. For most other HDB flats, the nett increase will only be between $2 to $11 per month. For three quarters of businesses, water bills will go up by less than a $1 per day ($25 per month).”
Many commenters on Mr Lee’s post expressed that thy were not convinced by his assurances.

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Why Raise Water Prices when Cost of Producing Water is Now Lower?

Speaking in parliament yesterday, Workers’ Party MP for Aljunied GRC Pritam Singh urged the government to be more transparent about the way it prices water.

This comes as the government announced an increase in water prices over the next 2 years, with households set to face up to a 30 percent increase in water prices.

Mr Singh questioned the need for a water price hike as the cost of producing water is now lower than before. He also questioned the government that besides the need to raise water prices to make Singaporeans more conscious about saving water, what else is being done to make sure our water resources don’t dry up.

related: No Need for Water Price Hike b4 GE2015, then Raises Fees After Election

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Elderly Singaporeans know why must hike water price by 30%

Prime Minister Lee Hsien Loong wrote on his Facebook page claiming that elderly Singaporeans in the pioneer generation know the need for a 30% price hike and why it is a must:

“The Pioneer Generation knew this. So do the generations of servicemen and women who have defended Singapore.”

The PM is resorting to the nationalist approach after failing to convince Singaporeans who expressed outrage at his hefty tax increase for a 6.9 million population.

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Triple taxation on water consumption still want to hike water price?

A water price hike when economic conditions are least favourable is indefensible.

PAP MPs and ministers have painted themselves into a corner because the decision to increase water prices was made behind closed doors. With the current public outrage, the nincompoops in white are now offering a record number of half truths and all sorts of ludicrous justifications. MEWR Minister Masagos seems to have woken up to the scarcity of water only in 2017. Has he been asleep since save water campaigns began 5 decades ago? Is he not aware that taxes have been imposed decades earlier to promote water conservation?

Consumers are already paying at least 54% in taxes, consisting of:
  • 24% Waterborne Fee
  • 30% Water Conservation Tax
  • 7% GST on not only the amount of water consumed but also on the 54% in taxes
related:
Water has been fully priced all along
False arguments for water price increase

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Local Media Outlets Are Trying To Cool Singaporeans Down Amid Heated Response Over Water Price Increase

The price of water in Singapore has become a hot topic recently, with many unhappy about the 30% hike. But our mainstream media outlets have produced so many articles to cheer us up, and we’re so grateful to them.

So far, we believe this is an accurate representation of Singaporeans towards the price increase. Singapore Democratic Party leader Chee Soon Juan stepped in to point out that we’re already paying three layers of tax on the water we use, and temperatures were raised further when member of parliament Lee Bee Wah made a baffling statement regarding the reason for the price hike.

Just go to any related article on social media about the hike in water prices and you can find tons of displeased netizens.

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There is something in the water from Malaysia

SO, MINISTER for the Environment and Water Resources Masagos Zulkifli said this in Parliament yesterday: “If we needed any additional water, where would it come from? How much would that additional litre cost? That is what we call the Long Run Marginal Cost (LRMC). That is the cost which consumers must see.’’

Except that we can’t see it because LRMC is a state secret. Revealing this would compromise future bids to build desalination plants. I don’t know how this works but it’s probably like a businessman who doesn’t want to tip his hand to a potentional contractor by telling him what kind of money he has to pay him.

So you can’t see LRMC but you have to “feel’’ it. Which is why the price of water is going up by 30 per cent after staying put for 17 years.

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What You’re Not Hearing About the 30% Increase

But first, just how is water priced in Singapore? Assuming you’re not one of the three people who look at their utilities bill regularly, here’s the surprisingly complicated water pricing structure in Singapore:
  • Firstly, there’s the basic Water Tariff, which for households is currently $1.17 per cubic metre before GST if you use less than 40 cubic metres per month (i.e. anyone who doesn’t live in a bungalow), and $1.40 per cubic metre if you use more than 40 cubic metres of water a month (i.e. people who can afford it). The Water Tariff makes up the bulk of your water cost each month.
  • Secondly, there’s a Waterborne Fee and the Sanitary Appliance Fee. The Waterborne Fee is a variable fee and is currently charged $0.28 per cubic metre based on your usage. The Sanitary Appliance Fee is a fixed fee charged at a flat rate of $2.80 per fitting per month based on how many toilet bowls your property has. These two charges help offset the cost of maintaining, operating and expanding the country’s sewage systems.
  • The third and final fee is the Water Conservation Tax. The government introduced this tax back in 1991 and set it at 30% of the Water Tariff if you use 40 cubic metres of water or less each month, or 45% of the Water Tariff if you use more than 40 cubic metres of water each month. It doesn’t represent the cost of producing water, it’s just a way to encourage you to conserve it.

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PAP CLAIM THAT WATER IS PRECIOUS BUT TOWN COUNCIL WASTE WATER WITHOUT THINKING?

PAP government say increase water 30%... but they just take our money and waste water.. I passed by at 4+pm already like this (water hose was spraying water), 7pm come back to do delivery again.. the problem also not solved.

With this 3 hours of wasted water, does the government know how many households it can support?

We will has a answer for this waste of taxpayer money and precious water.

related: MINISTERS SLAP ONE ANOTHER OVER HIGHER WATER PRICES

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Minister Lim contradicts SMOS Indranee, PAP still in denial of impact of high costs

After PAP had decided to increase water prices, SMOS Indranee made an incredibly stupid statement at government REACH forum. Indranee said that the cost of goods “should not and ought not go up“ despite the cost water – a basic necessity – increasing.

However, Indranee has now been contradicted by Minister Lim in CNA’s “Government is keeping a close eye on business costs, economy. Lim Hng Kiang: “…new measures such as the impending hike in water prices, are expected to have a moderate impact on business costs overall”. Question for Indranee:

Do you expect businesses to accept lower profits/losses simply because PAP wants to increase government revenue?

related:
Triple taxation on water consumption still want to hike water price?
Increasing water prices to create inflation spiral and boost GDP

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Businesses might pass on the water costs

Pass it on to you, the buyer, that is. The price of water is increasing by 30 per cent, starting in July 2017. It’s estimated that this will come to less less than $25 a month, for 75 per cent of businesses; although I’d contend we don’t know how many businesses there are, and 25 per cent of all businesses in the country is still a huge number of businesses.

It wouldn’t be unreasonable to guess that certain businesses – such as laundromats or restaurants – will be hit much harder by rising water costs than others. Now the purpose of the hike is to “raise awareness” of the importance of water, because without the government doing that none of us would know we’d die without it. But businesses tend to react to price hikes in two ways:

One, the G could have “raised awareness” of the importance of water, and businesses take steps to cut back. Or two, businesses could just factor the costs into their pricing. So we may see more places charging for water, higher prices at laundromats and car washes, higher costs on canned drinks, and so forth.

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Businesses say they will take water price hike in their stride
Laundry Loft laundromat at Big Box pictured on Feb 21, 2017. Foto: Jason Quah/TODAY

When Finance Minister Heng Swee Keat announced on Mon (Feb 20) that water prices would go up by 30%, the news did not give laundromat chain founder Tan Tiong Peng a “heart attack” — thanks to his decision to invest in water-efficient machines when he started the business in 2010.

Like other businesses interviewed on Tuesday, Mr Tan felt the quantum of increase was “big” & would add to the cost of operations. But despite higher water prices, the businesses said workers’ salaries, electricity & rental costs form a much greater bulk of their costs.

If they do pass on the costs to customers, water prices would not be the sole factor, some said.

related:
Hawkers, coffee shops to keep prices despite water cost hike
WP questions need for water price hike
Water prices to go up by 30% by July 2018
Gov will ensure ‘higher water prices do not hurt Singapore
Timing of water price hike more synchronised to political than economic cycle
Budget 2017: Defer water price hike, relook help for middle class, say MPs

read more

Full Coverage:
Gov will ensure ‘higher water prices do not hurt Spore’s competitiveness’
Debating the real cost of drinking water
Hawkers, coffee shops to keep prices despite water cost hike
Need to ‘bite the bullet’ in raising water prices: Indranee Rajah
Majority of households will find water price increase affordable: Indranee
Never an ideal time for water price hike: Lawrence Wong
Soften the impact of water price rise
How to use less water to have more? Look to Europe
Cost to supply water ballooned, says PUB
Bigger hike in water prices needed to curb waste: Experts
Water price hike necessary, but why now?
Here's how the government justified the 30% water price hike
Water price increase to reflect scarcity: Masagos
Reply to Prof Ng's response on false justifications for water price
In Budget debate, Pritam Singh asks questions we all want the
Look at water price increase 'in perspective': PM Lee
PM Lee: See water price increase in perspective
PM Lee hopes public debate over water price hike reminds
Price hike debate should remind S'poreans of water's importance
Water price hike: Govt has to do 'right, responsible thing' in sending
Water fees 'cover only PUB ops and asset depreciation'
Add water reporting to companies' sustainability reports
Timing of water price hike more synchronised to political than
WP questions need for water price hike
Businesses feel the pinch of higher costs, say MPs
A reply to “False justifications for water price increase”
MPs debate water price hike in Parliament
False justifications for water price increase
Budget 2017's water price hike: What you're not hearing about the
Singaporeans accept 30 percent hike in water price
Singapore Budget 2017: Water prices to increase by 30% from July
Budget 2017: Water prices to rise by 30% over 2 years
Public uproar over water price hike not quelled despite PM Lee
Water price increase dominates Budget forum
Water price hike a key concern at post-Budget forum
Water prices to go up by 30% by July 2018
Singapore Budget 2017: 7 things about water price changes
Bigger hike in water prices needed to curb waste: Experts
Never an ideal time for water price hike: Lawrence Wong
Raise water prices by as much as 100% to reflect production cost
Price hike reflects scarcity value of water: Masagos
Water is 'existential' issue for Singapore: Chan Chun Sing
Parliament: Water an issue of national security and must be priced
Water prices to rise in drive to boost Singapore's water security
Water prices set to increase this year due to higher production costs
SDP: Water price hike, PAP taking advantage of Singaporeans
The Government not being truthful with the expected increase of
Can Hong Kong follow Singapore's lead in water tariffs?
Soften the impact of water price rise
Hawkers, coffee shops to keep prices despite water cost hike
Need to 'bite the bullet' in raising water prices: Indranee Rajah
Domestic sector's water price rise should be lower than non-domestic
What is the revenue of water sales if costs are revealed
Water price hike might not affect customers
Costlier water: Businesses say knock-on effect on prices unlikely
Indranee Rajah: Goods “should not and ought not go up” in relation
Water price hike could weaken Singapore's position
NTU Don who wants 100% water price hike also wants more foreign
Singapore Democratic Alliance: No justification for increasing cost of
Indranee Rajah: Right time to increase water charges as necessary
NCMP Leon Perera points out curious timing of price hikes, Minister
Masagos: Consumers must feel the full price of water
PUB makes a profit thanks only to govt grants: Maliki
Illogical to say that PUB makes profits due to govt grants?
Water an existential issue for S'pore, says Chun Sing
Businesses say they will take water price hike in their stride
Carbon tax and water price hike to dampen REIT dividends
Govt will ensure 'higher water prices do not hurt Singapore's
Water-tariff hike will not blunt S'pore's competitive edge: Masagos
Singapore to raise water price by 30% over two years
On the actual impact of the water hike, and telling it like it is
Youth who came to the defense of water bill hike pwned by netizen
Consider holding rationing exercises: MP
Singapore consumer prices rise for second straight month in January
PUB: $1.1b profits last 7 years – how much since PUB was formed
Review pricing of water to account for size of household
Singapore water cost 10 times more than Hong Kong but average
DPM Tharman scratches head during another 'kee-chiu' type lecture
Look at water price increase 'in perspective': PM Lee
PM Lee hopes public debate reminds Singaporeans how valuable water is
PM Lee: See water price increase in perspective
Price hike debate should remind S'poreans of water's importance
Lee Bee Wah: Increase of water price, just to bring up

Water price increase just to bring up awareness of importance of water

Amidst all the snoozeworthy news coming in regarding Singapore Budget 2017, one development stands out as a pretty alarming one — water prices are set to increase by a whopping 30 percent over the next two years, starting this July.

We know that water is scarce in Singapore, etc, etc, but that’s a pretty frickin’ huge hike. Sure, it’s the first time since 2000 that water prices were revised, but still, it’s gonna be a proper shock to those on the unfortunate end of the poverty threshold.

While that was controversial enough as it is, in came another baffling moment. In a recorded interview by Channel NewsAsia, Member of Parliament (MP) for Nee Soon GRC Dr Lee Bee Wah explained her thoughts on the water price hike. In which she believes that the increase was done “just to bring up the awareness of the importance of water”.

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