SUBSIDY FOR ELECTRICITY AND WATER CHARGES

Encik Mansor Haji Sukaimi asked the Minister for Trade and Industry and Minister for Health what is the exact quantum of subsidy paid by Government for a unit block of electricity and water consumed by industries and the household and how does this element of subsidy in Singapore compare with subsidies in other countries.

Mr Goh Chok Tong: Mr Speaker, Sir, the Singapore Government does not subsidize electricity and water charges. Let me explain why we adopt such a policy.

We import all our oil to generate electricity. The oil producers do not subsidize us. We have to pay the full cost of oil we import. If we subsidize consumers of electricity, we may also have to subsidize bus fares and other services which depend on oil. Where do we find money to pay for these subsidies? The Singapore Government does not print money. If we need more money, we have to raise it through taxes, which means that ultimately it is the people themselves who have to pay for subsidies, not the Government.

Another reason: if consumers do not pay the full price of utilities, they will inevitably over-consume. In other words, it is possible for them to live beyond their incomes in actual terms, since part of their consumption is subsidized.

If we all live beyond our actual capacity to earn incomes, we shall soon find ourselves unable to pay for the full market price of oil. If utilities are not subsidized, we do not have to fear that we are unable to pay for the cost of importing oil because for every barrel of oil we import, the full cost is recovered from the consumers.

The same arguments against subsidy apply to water.

I am unable to obtain information on countries which provide subsidies on electricity and water. Such information is irrelevant anyway, as it is our policy not to subsidize our electricity and water charges either to industries or to domestic consumers. I can, however, compare our tariffs with those in Hong Kong and Malaysia to show that our charges in Singapore are comparable with theirs.

In Hong Kong, electricity is supplied by two private companies. Water supply is under the charge of the Water Authority of the Public Works Department. Singapore's average domestic price of water of S33c per cubic metre is slightly lower than Hong Kong's average domestic water tariff of S35c per cubic metre.

For electricity, Singapore's domestic tariff of S20.15c per unit is lower than Hong Kong's rate of S24.22c for the first 20 units, S21.86c for the next 480 units and S21.18c per unit above 500.

Malaysia charges S18.3c per unit of electricity for the first 100 units, S21.0c per unit for the next 900 units and S23.7c per unit above 1000. Singapore's rate, as I mentioned earlier, is S20.15c per unit. Let me remind hon. Members that Malaysia is an oil exporter.