Wednesday, August 04, 2010

PAP Government Abuses its Monopoly Power to Suck the People Dry

In Economics, a Monopoly exists when a specific individual or an enterprise has sole control over the supply of a particular product or service, and hence is able to determine significantly the terms on which other individuals shall have access to it. The concept of Monopoly is typically applied to corporations and businesses, and one example of corporate monopoly in Singapore is SMRT, which has the sole operating rights to the North-South and East-West lines in Singapore. Lucky Tan has recently written a good piece on how SMRT is abusing its monopoly, I will not elaborate on this here.

The concept of Monopoly can also be applied to groups other than corporations. It can be applied to Governments, which have a de facto monopoly over the provision of public services. This monopoly of government is not good or bad in and of itself, and in fact can be a very good thing when public services are provided cheaply, efficiently, and to the public benefit. This is because governments are not ordinarly profit seeking operations, but instead are institutions created to serve the public interest, unlike businesses and corporations.

In Singapore, however, there is little acknowledgement of the concept of 'public interest' when it comes to how the government is run. Indeed, the PAP has been explicit in years past about how Singapore should be run like a corporation: Singapore Inc. This profit-seeking mentality means that the PAP has not been shy about abusing the monopoly power inherent in Government, to suck as much 'profit' out of Singaporeans as possible. Here are some examples in which it does so.

1. The overnight car park charges were recently doubled from $2 to $4.

The HDB and URA have apparently 'explained' this increase by saying that residents with Season Parking Ticket (SPT) are facing difficulties in finding parking space when they return home at night to these carparks which initially offered adequate parking space to meet season parking needs. Their logic is that the increase in the supply price will cause demand to shift down and thus increase the space available to SPT holders.

This would be a valid argument IF there was competing carpark space for overnight parkers to use - but this is patently not the case. In most housing estates in Singapore, there are NO viable alternative carparks for Singaporeans to use, other than public HDB carparks. The monopolisation of public housing areas by the government has meant that it is pretty much the sole supplier of parking space in Singapore. And since cars really have no where else to go, drivers will have to end up paying double the overnight charges, meanwhile the overnight parking problem will not be solved.

2. ERP rates keep going up and up

The implementation of ERP was justified in a similar manner to the hike in overnight car park charges. The government said that the ERP system was implemented in order to ease traffic jams on Singapore highways and major roads in Singapore. The argument was that charging people to use certain roads would shift them off the heavily used roads onto others and thus ease congestion.

Again, this would be a valid argument if there were viable alternatives to the expressways in Singapore, AND, if these viable alternatives were plentiful enough so that the spillover would not also result in congestion on these alternative routes. But we all know that this is not the case - congestion builds up on the expressways AND the ordinary roads in Singapore during periods of heavy traffic. And this is due to the lack of supply of new roads, and the continued rise of cars and traffic in Singapore, partially due to the influx of foreign immigration to the country.

Hence, the only impact of the raising of ERP rates is to ensure that the pockets of the government are padded with even more profits from the utilisation of expressways - the government is using its monopoly over transport infrastructure to suck more $$$ out of motorists in Singapore.

3. $100 levy on Singaporeans for casino entry

The PAP justified the $100 per entry fee by saying that this would act as a deterrent to entry and thus stem the problem of gambling addiction in Singapore. But we all know that this $100 fee is completely and utterly useless when it comes to discouraging gamblers from entering the Singapore casinos. For most gamblers who often wager $1000s of dollars in a single session, $100 is nothing. In fact, when it come to problem gamblers, the $100 is simply an additional hurdle to overcome at the gambling tables - an addition cost to recoup when it comes to their gambling.

The only impact the $100 levy has is to act as a tax on Singaporeans who want to enter the casino. It is no wonder, then, that the government has collected millions from this levy. Singaporeans should actually be very sad about this, because it means that thousands of Singaporeans have gotten themselves into gambling. Instead of preventing gambling, the $100 levy has only revealed how addicted Singaporeans are to this new national hobby!

4. Government Ministers keep paying themselves higher and higher multi-million dollar salaries

Perhaps the greatest abuse of monopoly power of all, is the multi-million dollar salaries of the ministers in parliament. By taking advantage of the fact that they have absolute power over the legislative process and that there is nobody to oppose them in parliament, Singapore's "intellectual class" have gotten into the habit of paying themselves ever higher salaries. They justify this on the basis that government leaders need to be remunerated on a competitive basis to the private sector, otherwise the government will get subpar talent. But we all know that this is nonsense, and is but a smokescreen for them to abuse the monopoly power they have, in order to suck the system for as much cash as they can, for as long as they can.

Time to Break the Monopoly

In order to deal with the abuses of monopoly power by profit-seeking corporations, many countries have in place a governmental body called a "Competition Commission". The aim of this commission is to ensure that these corporate monopolies do not earn excess profits at the expense of abusing the public interest, and to ensure a fair pricing of the products in relation to the service that is being provided to the public. Sometimes, a competition commission will even legislate the breakup of a monopoly into two or more competing organisations, so that the industrial organisation moves from a monopoly to a more competitive market structure.

This is what we need in Singapore. The PAP's stranglehold over parliament needs to be broken up by a 'competition commission' - the people of Singapore. Competition needs to be introduced into parliament so that the astronomical excess profits being charged by the PAP will be competed away into normal profits. Competition needs to be introduced in parliament so that the PAP can no longer abuse its monopoly power to suck Singaporeans of their hard earned monies.

Singaporeans need to create and introduce a viable alternative to the PAP government into parliament, without which, they will never get value for their money.


Kaffein said...

You left out the $100 TV and Radio license which till this day, I seriously don't know why I'm paying that for. Do you?

Anonymous said...

When our bodies are dry, they drink our bones by making our bones into powder to promote their longevity. Honestly I am sick of paying for all sorts of bullshit. ERP, season parking, property tax, income tax, road tax, tv license, always increasing utilities bill, world cup subcription, casino $100 levy, $70 passport, everything also must pay.

Anonymous said...

SMRT gana screwed by circleline and then SMRT screw us, very vicious circle

Chee Wai Lee said...

Nobody thinks the SC&C fees charged by HDB is actually a hidden property tax (not that I consider HDB flats "property" ... but that's another story)?

Sgcynic said...

And we claim to have one of the lowest taxation where a large portion of our citizens are not taxed...

Anonymous said...

Your analysis is pretty screwed up. You mentioned there's no alternatives but in fact there are, which leads me to believe either you are delusional or in denial. Firstly, the car parks. Why would you use coupons if you are a resident there? That must mean you aren't a resident in that area, then you are exactly who they are targeting. In other words, go back home and park your car there. Don't use the car parks meant for the residents there. Simple logic. The price is supposed to deter this from happening.

Secondly, your analysis of transportation alternatives is incomplete. Have you forgotten public transportation? That's what you should be switching to if you don't like to pay the ERP. And by you driving on the streets during peak hour, you are contributing to the traffic jam and affecting every other people, so the ERP is to internalize these external costs they subject others into their private cost. So if you are not happy about it, take a bus or train. Our do you fancy getting stuck in the jam for well over 2 hours?

Thirdly, why the heck are you complaining about casino levy? Because you want to go in to gamble for leisure. That's exactly what the government is discouraging. They don't want any Tom, Dick, and Harry to go in and look look see see, then play and get addicted. You are indeed right that problem gamblers simply see this as another hurdle. But that's not the only government objective, they are more concerned that normal people like you and me might get addicted if we have free access, not die hard problem gamblers.

Fourthly, while I don't exactly disagree with you on ministers' pay, I don't exactly agree with you either. All I can say is money may be one motivational factor. Why the heck would anyone want to take on a role with much responsibility, stress, and no privacy if they are not adequately compensated? There certainly aren't much saints around, and much less people with the capability to do so. Most opposition party here have crap economic knowledge and Singapore would be in ruins if they took power.

So lastly, no to opposition with crap economic knowledge. I don't think competition will necessary be better. Just look at the political gridlock in USA. They can hardly agree on anything. So if you are not happy to be in Singapore, go somewhere else, we don't need Singapore to change for the worse.