Sylvia Lim: Tier electricity pricing to favour small consumers

While offsets to low-income households will be useful while it lasts, an additional idea is to have a tiered system of pricing electricity in favour of small consumers. The fundamental idea is for a threshold level of power consumption by households to be determined. Households consuming less than the threshold level will enjoy a low tariff charge. With increasing consumption levels, the tariff escalates. The higher tariff collected in the upper tiers can be used for 2 purposes: to cross-subsidize the first tier tariff, and to encourage all households not to over-consume electricity.

This was a speech in Parliament on 8 March 2010 by NCMP Sylvia Lim during the Committee of Supply debate, on the budget for the Ministry of Trade and Industry. Read other Workers’ Party speeches and statements at wp.sg.

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The Economic Strategies Committee has put forth recommendations on Singapore being a Smart Energy Economy.

As electricity is a modern necessity, it is of paramount importance that it is reliable, pollution-free and affordable.

As regards reliability, the ESC recommends that in the medium term, Singapore consider importing coal and electricity to diversify our energy sources, so as to free up land in Singapore. I would like clarification on the pros and cons of relying on imports and thus becoming less self-reliant for our energy needs. Which are the countries we are likely to import electricity from? Will there be additional risks to our energy security?

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High costs and low wages in Singapore

A comprehensive survey released by UBS has confirmed what economists, academics, opposition politicians and ordinary Singaporeans have known all along: That the Singaporean worker’s wages has decreased over the past 3 years, while the cost of living has shot up.

The Prices and Earnings 2009 survey by the Swiss bank, which the Straits Times did an Insight article on, offers a detailed look at prices for goods and services, and wages and working hours in 73 major cities worldwide. The survey found that:

offers a detailed look
at prices for goods and services, and wages and working
hours for 14 professions in 73 cities worldwide
  • Singapore’s wages after taxes and social security contributions rank us at 41 out of 73;
  • Singapore ranks as the 15th most expensive city, after factoring in the cost of rent (a major expenditure for Singaporeans);
  • Our workers’ purchasing power is ranked 50 out of 73;
  • Three years ago a Singaporean worker had to work 22 minutes to earn enough to afford a Big Mac. Today that same worker has to work for 36 minutes, because his wages have decreased and the cost of living has increased.

The contrast between the ranking of our cost of living (15) and our wages (41) couldn’t be more stark. Yet when asked for their views on these unfavourable survey results, two MPs were dismissive about it.

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