INCREASE IN POSTAL CHARGES (Reasons)

Dr Wang Kai Yuen asked the Minister for Communications what were the reasons behind the recent increase in postal charges, in particular the substantial rate increase for registered mails.

The Minister for Communications (Dr Yeo Ning Hong): Sir, mail delivery is a very labour-intensive service. The increases in postal charges were necessary primarily to meet the increase in labour cost. For the information of the House, labour costs comprise about 35% of postal costs.

The delivery of registered mail is a personalised service, because Telecom has got to keep track of every registered letter that is posted until it is delivered to the addressee at his doorstep. And if the addressee is not at home, Telecom has to make a second trip. So it is even more labour intensive than ordinary post. The fee for the registered letter reflects this very high cost of providing the service.

Dr Wang Kai Yuen (Bukit Timah): Sir, I would like to ask the Minister whether these increases could have been moderated by spreading them over a longer period of time.

Dr Yeo Ning Hong: Sir, the Member may recall that the increases have indeed been spread over a number of years.

Dr Wang Kai Yuen: Sir, I would like to find out from the Minister what Singapore Telecom intends to do with the revenue stream that was used previously to cross-subsidise these services.

Dr Yeo Ning Hong: We give it back to users of other services whenever productivity gains permit us to do so.