REVIEW OF DIESEL TAX ON TAXIS

Mr Goh Chee Wee asked the Minister for Communications and Information, Second Minister for Defence and Second Minister for National Development (a) whether he will consider reviewing the quantum of diesel tax to be imposed on taxis if, after the fare increases, the demand for taxis drops significantly to the extent of adversely affecting the income of taxi drivers; and (b) if his Ministry will suspend the release of more taxis on the road until the supply and demand pattern has become clearer after the fares revision.

The Minister for Communications and Information, Second Minister for Defence and Second Minister for National Development (Dr Yeo Ning Hong): Mr Speaker, Sir, the objectives of the taxi fare adjustment are to slow down the excessive demand for taxis brought about by unrealistically low fares and, at the same time, to provide the average taxi driver with an increase in take-home pay.

The Member for Boon Lay's first question is concerned with the income of taxi-drivers, whether they will be affected by the new fares. We are confident that their income will increase because we believe the demand for taxis will not drop more than 15% after the fare adjustment.

Sir, I understand the apprehension of the taxi-drivers at the moment. That is why we have asked the Ministry of Finance for a six-month period before the diesel tax is introduced. Let me say that before the period of six months is up, taxi-drivers will be able to see for themselves the full benefits of the increased fare. There is no better argument than for the taxi-drivers themselves to see the increased fare coming in. I am confident that this increase in fare will be the case.

Sir, having said that, I can assure the House that if the objective of the increased earnings for taxi-drivers is not met, my Ministry is prepared to review the matter. It is always Government's practice to closely monitor a situation after a change has been made. We shall monitor the travel pattern in taxis over the coming months. However, I am confident that the objectives will be met.

The second part of the question concerns increasing taxi fleet size. Sir, with the new fares, more taxi-drivers are expected to take advantage of the higher fares and to rent out their taxis for the second shift. Therefore, we do not see a need to add any more taxis for some time to come.