The recent rise in water prices has got everyone talking about it. To raise or not to raise? That is not the question, actually. The question now is how much to raise and someone has just suggested that water prices should be increased by 100% instead.
Yes, you’ve read it right. 100%.
Rise in Water Prices
It has been announced that the price of water will be increasing by 30 percent over the next two years. However, a Nanyang Technological University economics professor, Professor Ng Yew-Kwang, disagrees with it.
He stands on his ground that the hike should be even larger, to reflect the cost of water production. In his point of view, it is too little, and he suggested at least a 50 percent- if not a 100 percent hike. From his economic point of view, water prices have not been raised since 2000, nearly two decades ago, making it viable to increase further. If only our salary were to increase by 100 percent as well…
Economic Analysis
With the general mindset that water, which is essential to life, should be free, water prices tend to be too low in most countries. This usually results in the Government having to collect taxes from other sources, creating a disincentive effect. Hence, Professor Ng believes that as long as the increase is not more than the price of production, it will encourage consumers to save appropriately.
While water prices will be raised in two phases, first in July and again next year, Professor Ng suggested that increasing the price at once would be more effective in changing habits. By using a one-step significant increase, it will then create a shock effect.
From a purely economic point of view, he stated that water prices should have been increased many years ago. Whereas for him, the increase now would have been too late as water is already perceived to have low prices.
But let’s face it: as a consumer, all we care about are the numbers on the bill.
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This article was first published on Goodyfeed.com
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