FEE HIKES BY GOVERNMENT AGENCIES

Mr Tay Beng Chuan asked the Minister for Trade and Industry whether the Government will strengthen the existing mechanism to ensure that a fee hike at the beginning of the year, like that of the fee hike for refuse disposal, will not lead to another round of fee hikes by various Government agencies, thereby defeating the purpose of its package of cost and tax cuts to help companies compete during this difficult period.

Mr Lee Yock Suan: Mr Speaker, the Government has implemented a $10.5 billion package to help cut business costs substantially. However, it does not follow that fees for all public services should be reduced or frozen across the board. To do so regardless of the merits and rationale of each individual case will hinder the Government from making adjustments that become necessary from time to time, and will create rigidities and distortions which will impair the efficiency of our public services.

The increase in refuse disposal fee is necessary given our limited land for disposal. Refuse disposal is expensive and costs have increased further because the landfill on the mainland has been exhausted and refuse must now be barged across the sea to the new dumping site at Pulau Semakau.

The increase in disposal fees will not translate into higher refuse collection fees for most premises. This is because SEMAC, the waste collection company servicing most of the HDB flats and other residential units, hawker stalls and trade premises in Singapore, has agreed to absorb the increase in refuse disposal fees, while the company that has successfully tendered to collect refuse in the eastern part of Singapore will be charging refuse collection fees that are mostly lower than SEMAC's.