“Having higher aspirations in life is a reason why Singaporeans find the cost of living here expensive, despite real wages having gone up,” the TODAY newspaper reported Minister of Defence, Ng Eng Hen, as having said on Saturday, 10 May.
Dr Ng was speaking at a Singapore Medical Association (SMA) dinner. He was responding to a question from an audience member about the rising cost of living in Singapore.
“If you look at household goods, per household, what people have – handphone, TV – has actually gone up,” the minister said. He added that now, unlike the past, “mobile phones are almost an essential item for children.”
According to TODAY:
“That Singaporeans find costs of living expensive due to higher aspirations is a reason that will not please people, including himself, said Dr Ng, as the reason is ‘objective’ and does not address ‘issues of the heart’.”
In recent months, the issue of cost of living in Singapore has been in the spotlight, especially after the Economist Intelligence Unit (EIU) released a report in March which ranked Singapore as the most expensive city in the world to live in. [See here: “Sing on a shoestring”.)
The EIU report drew a dismissive response from Singapore’s Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, the next day.
Mr Tharman said reports like that of the EIU “are meant to measure cost of living for expatriates in various parts of the world, and thus do not reflect those of local residents.”
He said, “In the last five years alone, if you take our middle-income households, our median households, their incomes have gone up faster than the CPI index, the cost of living. In fact, it’s gone up by 10 per cent in real terms.”
But Mr Tharman’s reassurance may be little comfort to the average Singaporean who feels the pinch on a daily basis.
In the last few years, as costs escalated, low- and middle-income Singaporeans felt the pinch the most.
In a March 2011 report, the TODAY newspaper said:
“From basic necessities to hawker meals, from holidays to that new car, from healthcare bills to expenses related to starting and raising a family, it seems that Singaporeans are certainly feeling the pinch of higher prices, according to a Today survey of voters living in the heartlands. Eight in 10 of the respondents said they were worried that such expenses were getting much more expensive.”
And in February 2013, a poll by the government’s own feedback unit, REACH, found that “cost of living issues are the top concerns of Singaporeans.”
The fears and worries continued into 2014, with even the younger ones expressing concerns about the cost of living and whether they will be able to find jobs which will pay enough to meet such costs.
In March 2014, the Straits Times reported that “nine out of the 15 young people” it interviewed at a dialogue session with Prime Minister Lee Hsien Loong said they worried they would not be able to afford “basic goods”, namely a flat and a car.
This came “amid rising costs and more intense competition for jobs and at work”, the paper said.
One of the youths interviewed said she “[hoped] to be able to take care of my family and myself with my meagre salary in the future.”
The issue is evidently serious and important enough for PM Lee to mention it on two major occasions so far this year – in his speech at the NTU Ministerial Forum in January; and in his May Day message recently.
“We think in Singapore that we invented the ‘cost of living’, but we did not invent the ‘cost of living’,” Mr Lee said in January, adding that other countries also face the issue. He nonetheless acknowledged that in Singapore “many people worry about job security, cost of living, whether they can do better than their parents.”
In his May Day message, Mr Lee said, “If you compare to any other country in the world, I think we are doing well but we are going through changes, difficult ones and it has brought stresses and strains, competition, anxiety, widening income distributions, worries over cost of living.”
In trying to explain the reasons for Singaporeans’ fears about the issue, Dr Ng perhaps has lost sight of the reality on the ground for the average person. Indeed, his argument is in fact an old one which was used by the government in the past.
In an article in the Straits Times in February 2005, Ms Ling Chien Yien wrote about why Singaporeans complain about the cost of living, and why government statistics do not reflect reality. Her reply could very well be in response to what Mr Tharman had said (see above):
“Statistics may show that growth in income is faster than increases in living costs. But in reality, the middle- and low-income families find it hard to share this optimism. Their complaints against the heavier burden of living costs and price hikes are not without reason.”
In his reply, Chen Hwai Liang, then Press Secretary to the Prime Minister, offered arguments similar to those of Dr Ng’s:
“While costs have gone up modestly, they have not been the main reason that households have felt pressure. Nobody wants to turn back the clock to the days before air-conditioners or handphones, or when only a small minority could afford overseas travel, even though costs might have been lower then.”
Mr Chen added:
“The way forward is to create more prosperity and growth, so that Singaporeans can get better jobs, and attain the higher standards of living that we all aspire to.”
Still, to effectively blame the cost of living on Singaporeans’ “higher aspirations” or perception, as Dr Ng evidently did, is “disingenuous”, says blogger Ng E Jay.
“Dr Ng Eng Hen is widely off the mark,” Mr Ng wrote on his blog in response to Dr Ng’s remarks.
“The high cost of living in Singapore is not a matter of perception alone, and neither is it merely a result of Singaporeans having higher aspirations and expectations in life.”
Two of the causes, he says, are rental and the cost of raw materials.
For example, “businesses, faced with increased rental costs, have no choice but to pass the costs onto consumers, or risk shutting down.”
“That is why the prices of so many of our daily necessities and conveniences of life have gone up so quickly,” Mr Ng wrote. “Hawker fare and prices at food courts have soared in recent years precisely because of rapidly rising rentals.”
He said that “unlike many developed countries where the cost of living is indeed beyond the government’s control, inflation in Singapore is instead generated by the government’s policies.”
“The government has taken in so many foreigners but not increased the supply of housing, and social and educational services to accommodate the increased demand,” Mr Ng said. “It does not take a genius to figure out why prices have risen so rapidly. The government has failed to build infrastructure and increase the level of social support ahead of demand. In the end, it is the citizens who suffer.”
