SURCHARGE ON PUB BILLS

Mr Ho See Beng asked the Minister for Trade and Industry and Minister f6r Health whether he will review the policy of the Public Utilities Board in imposing a 50-cent fine on consumers for the late payment of water and electricity bills as such payment can be a further burden on those who are already unable to pay their bills on time because of financial hardship.

The Minister for Trade and Industry and Minister for Health (Mr Goh Chok Tong): Mr Speaker, Sir, imposing a charge of 50c serves as a deterrent against late payment. Since the introduction of the service charge in 1975, the number of reminders has been declining. The proportion of consumers receiving reminders has dropped from 27% to 14%. If the PUB sends reminders without any service charge, consumers will not take the reminders seriously. The charge of 50c barely covers cost. The direct cost (stamp, paper, printing, computer time) of each reminder is 20c. This excludes indirect and overhead costs, and interest lost on late payment. If the proportion of consumers receiving reminders goes up from the present 14%, we may even have to consider imposing a heavier deterrent for late payment.

If the consumer pays his bill promptly, he will save 50c, and the PUB inconvenience and expenditure.

Mr Ho See Beng: Mr Speaker, Sir, that is a very ridiculous answer. I would like to ask the Minister concerned whether he can do business without having capital or without incurring expenditure.

Mr Goh Chok Tong: Sir, I do not quite comprehend the Member for Khe Bong's question.

Mr Ho See Beng: Sir, when someone does business, he needs to have capital. The PUB expects to do business without even wanting to pay for the printing cost of the reminders. So how could that be possible?

Mr Goh Chok Tong: Mr Speaker, Sir, it costs the PUB about $200,000 per year just to send out reminders, and this cost has to be recovered from those consumers who need such reminders.

Mr Ho See Beng: Sir, I would like to ask the Minister whether he has taken into consideration the consumer's deposit of 1 1/2 months' charges for water and electricity. The consumer does not owe the PUB anything because he has got 1 1/2 months' deposit with the PUB.

Mr Goh Chok Tong: Sir, I think the Member for Khe Bong has misunderstood the purpose of the deposit. The consumer has, in fact, consumed water and electricity and has not paid the bill for about six weeks. The deposit, therefore, is to ensure that the consumption by the consumer, which is billed six weeks later, will be paid. It is not a pre-payment. The Member appears to have understood that the deposit is a pre-payment for consumption. It is not so.