Inclusion of CPF Contribution in Calculation of Public Transport Affordability

Mr Dennis Tan Lip Fong asked the Minister for Transport why has employers' CPF contribution been added to the calculation of household income in the Ministry's key performance indicator of public transport affordability as set out in the FY2016/2017 Budget Book.

We use the findings in the Department of Statistics' Household Expenditure Survey to calculate public transport affordability. The survey is conducted only once every five years. In the intervening years, we adjust the findings in the last available survey by the subsequent annual changes in national wages and public transport fares.

The last available Household Expenditure Survey was in 2014. In the survey, employer Central Provident Fund (CPF) contributions were included in the computation of household incomes. Accordingly, the public transport affordability performance indicator in the financial year (FY) 2016/2017 Budget Book also used household income with employer CPF contributions.

Removing the CPF contributions from the computation does not alter the fact that public transport affordability has improved. Public transport expenditure as a component of second quintile household income, fell from 2.5% in 2010 to 2.2% in 2015 if we include employer CPF contributions, and from 2.8% to 2.4% over the same period if we exclude employer CPF contributions.