Tuesday, December 11, 2012

SMRT - The Ugly Truth of Ultra-Capitalism

 This is derived from a blog post from Transitional Eternity. 

 It has confirmed my suspicion all along that the workers and drivers in SMRT have been short-changed by the management/Directors by allocating vastly disproportionate sharing of the increase in profits over the years. Director has increased their own fees by a whopping 970% over 11 years while the workers and drivers were given a mere 67% increment. These are derived from the costings found in the annual reports. 

 We have been talking about RISING Income gap or disparity all these while and PAP government just act blur when their own GLCs under their charge are practicing such blatant Ultra-Capitalism of exploitation and unfair distribution of earnings. 

Such practice of Ultra-Capitalism is totally unacceptable and unsustainable. It will be a key of social dis-stabilizer in the mid to long term.

Fruits of earnings of any cooperation should be fairly distributed among the workers, management/directors and the capitalists/investors. The percentage of increment should not vary too much else the income gap or disparity will be widen substantially over time. If this is not kept in check, the whole system may just collapse and chaos may reign. 

Goh Meng Seng

Dear Mr Lui recognizes the need of a pay rise for our bus drivers, has asked commuters last Friday where “where is that money coming from[Here] after two weeks of deliberate hibernation and expects commuters to pay for the persistent mistakes of SMRT’s poorly-maintained train tracks and exploitation of foreign labour at the expense of wage depression for local workers. His first appearance and golden words came after the dust for the SMRT bus drivers’ strike saga has settled.  

I spent my Saturday afternoon scouting for possible sources of that “money” that our transport minister Lui Tuck Yew demanded. And easily found the pool of money in:

(1) The Directors’ Fees
Steady growth in directors’ fees between 2002 to 2012 and 2007 is the exceptional year which sees a 0.26 million drop in directors’ fees. There are certainly more years of upward growth in directors’ fees than in SMRT’s net profits. By 2012, directors’ fees have grown to a whopping 970% in a span of 11 years.

Contrasting the generosity of SMRT on its directors, the growth of staff costs (excluding directors) is a mere 67%. While directors have seen their fees increased in several folds in the last decade, staff below the directorial level who constitutes the bulk of SMRT’s labour force and where a big majority of these people are directly involved in SMRT’s daily core business, sees little growth in their income.

Not belittling the role of SMRT directors play, however, staff who operate SMRT’s business are neither of negligible importance either. Without these people, directors will be deemed redundant! It is no surprise to see SMRT’s deliberate maneuver of low wages for its operational staff to drive away Singaporean workers and thus, giving way to the excuse of seeking overseas labour at a cheaper price.

When we compare directors’ fees with staff costs, it is not difficult to notice that the percentage growth in the former outruns the latter. Directors’ fees grow at a double digit rate for most years except for 2006, 2007 and 2011, indicting an above-inflation rate of growth for this group with a greater absolute amount than the wages of the majority of non-directorial staff. A 10% increase of a $60 000 fees would result in $12 000 in absolute terms.

Between 2004 and 2005 and 2008 itself, non-directorial staff sustained an actual fall in costs despite SMRT operating at a positive gain in those years. The percentage rise in staff costs ranges between 2.5% to 42.5% and a double digit growth occurred only in 2003 (42.5%) and 2012 (11.6%), where the rest of the decade, staff costs are either at a negative growth or growing less than 7% single digit rate on the average, which if inflation rate is factored in, the real growth is minimal.

1 million dollars to come off directly from the directors’ fees towards the bus drivers’ increment fund as a compensation for the persistently poor performance of both train and bus services since 2011 and the inconvenience caused to commuters. As SMRT employs approximately 2000 bus drivers [Here], about 30% of its total staff are employed in thebus sector (SMRT Annual Report 2011), one million dollars would bring about an average of $500 p.a. extra.

Total number of employees in SMRT group

(2) In SMRT’s Net Profts
This is one area which private company SMRT could consider dipping into for raising bus drivers’ salaries.

Since 2002, SMRT has sustained consecutive years of positive gains. By 2011, it generated a 2.8 fold of net profits compared to 2002 and even during a weakening net profit in 2012, there is still a 2.1 fold gain as compared to the 56.8 million in 2002.

There were three less better years in SMRT’s overall net profits growth for the period between 2002 and 2012, namely 2006, 2011 and 2012 but respectively years of net profits still clinches 2 times more than 2002’s net profit.

Total net profits’ accumulation comes to a figure of 1.3 billion dollars in the last 11 years alone, 23.6 times of that of 2002’s net profit figure. However, on paying its staff (excluding directors), SMRT has spent a total of 2.5 billion in the last decade, a mere 13.9 times than that of 2002’s. Net profit growth easily outstripped the growth of staff costs, baring the strong reluctance of profit sharing with its non-directorial staff who does the actual work in generating revenue.

SMRT may be successful in expanding its sources of alternative revenues beyond its core business—public transport itself. However, it would be myopic to neglect its core business without which will cause a severe dent in its alternative sources of revenues. 

As much as SMRT’s claim of its accountability [Here] towards its shareholders (the government being the largest shareholder in this case as Temasek Holdings owns a 54% stake in SMRT), however, it has more to account to the commuters for the facts that SMRT’s infrastructure comes from the public funds, as well as the transport fundallocated to the transport providers comes from the public’s purse strings.

Dip into the pool of funds reserved for SMRT’s shareholders. As the largest shareholder, the government has the obligation in restoring the confidence of the public and its citizens of the promise of Singaporeans First by: 

1) securing well-paid jobs for locals (pay foreign drivers the same wage as local bus drivers to reduce the unfair reliance of foreign cheap labour) 

2) stop fleecing local commuters for profiteering

Mr Lui should allocate at least 4 million dollars from the pool of net profits which SMRT has amassed in the last decade. That meagre amount will not dent the 1.3 billion pool but will bring more quality living for its frontline workers and will also help to transfer the expense of SMRT's mistakes from the commuters. 

After all, our government works for the welfare of the people and isdistinctly different from those corrupted nations which milk its people to the last drop.

1 comment:

Anonymous said...

1 year ago you comment so much about YSL, now you are not dare to comment about Palmer case?