Fighting inflation – suggestions for the Govt

Leong Sze Hian / Senior Writer

I refer to the article “Tharman: Pay rises no cure for inflation” (ST, Jul 10).

It states that “Singapore must guard against a second round of inflation, which could happen if wages are raised to keep pace with price increases”.

Employers have been urged by the National Wages Council to make one-off lump sum payments to tide their workers through this period of economic difficulty.

Civil servants were paid an extra bonus recently to help them cope with inflation.

The private sector is also being encouraged now to pay an extra month’s bonus to help their employees.

So, what should employers do now?

Pay the extra month’s bonus, but don’t increase wages?

Or, increase wages, but don’t pay the bonus?

Don’t either of these amount to increasing wages?

I am confused.

Wouldn’t raising wages which spread over 12 months have a more graduated effect on wage inflation, compared to a larger lump sum bonus?

Meanwhile, the following have increased since inflation started to rise last year, in chronological order:-

Petrol, nets fees, service & conservancy charges late payment fees, hospital fees, cable TV, food, electricity, building development charge, HDB rental, ERP, bus fares, special needs school fees, medical insurance for foreign workers, taxi fares, school bus fees, S & CC (Potong Pasir), HDB valuation fees, MediShield premiums/deductibles, ElderShield premiums, cinema tickets, university fees, malls car parking, cost of cashcard, PCF kindergarten fees, etc.

Since inflation for the last 13 months was 7.7 per cent (May’s year-on-year of 7.5 plus the 0.2 per cent increase over April 2008), and the the average annualised wage change was 1.66 per cent for workers, from 1997 to 2007 (using Ministry of Manpower data from its Wages Report), how do we cope with the rising cost of living in the meantime?

I wrote an article about free things in Singapore, and many Singaporeans are contributing to the directory of free stuff at

In the meantime, here are 16 suggestions for the Government to further help singaporeans during this time

1. <!–[endif]–>Reduce the 30 per cent water conservation tax.

2. <!–[endif]–>Reduce the 41 cents per litre tax on petrol.

3. <!–[endif]–>Exempt essential items from GST.

4. <!–[endif]–>Increase tax reliefs to account for rising inflation and increased cost-of-living. For example, the $ 2,000 wife’s relief, parent’s relief, etc, have not changed for many years.

5. <!–[endif]–>Raise interest rates to dampen rising inflation.

6. <!–[endif]–>Freeze the profits of transport and utility companies, such that any increase in profits over the last year, should be returned to consumers like a subsidy, as most of these companies have been making ever increasing record profits, almost year after year.

7. Reverse the increase in property tax on all HDB flats implemented on 1 January 2008.

8. <!–[endif]–>Rescind the increase in rentals for 1 and 2-room HDB flats.

9. <!–[endif]–>Freeze or reduce all healthcare fees increases (these are not included in the freeze on Government fees).

10. <!–[endif]–>Freeze or reduce all university fees increases (these are also not included as explained above).

11. <!–[endif]–>Reverse the 31 December 2007 salary increase for Ministers and withdraw the planned third increase in Ministerial pay scheduled for 31 December 2008.

12. <!–[endif]–>As the Town Councils already have accumulated more than a billion dollars of surpluses in their sinking funds, implement a temporary reduction in Service and Conservancy Charges (S & CC).

13. <!–[endif]–>Instead of giving tax credits, like the children’s tax credits of up to

<!–[if !supportLists]–>14. <!–[endif]–>$ 70,000 for 4 children, which more than 60 per cent of Singaporeans do not benefit, because they hardly pay any income tax change this system which focuses on tax credits to focus on tax reliefs or direct cash subsidies, so that more lower and middle-income Singaporeans can benefit.

15. <!–[endif]–>Reverse the increase in MediShield premiums/deductibles and ElderShield premiums.

16. <!–[endif]–>Reverse the increase in PCF kindergarten fees.

17. <!–[endif]–>Reverse the increase in building development charge.

As the Budget surplus was $ 6.4 billion, the implementation of some of the above suggestions, may have a minimal impact, from the perspective of fiscal prudence.


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