by Kok Ming Cheang
The Straits Times’ advertisements put up by Government in 2022 with the heading “Household Support for the year ahead” and then changed to “Supporting Households with cost of living” in 2023, tell us a painful story of Singaporeans’ daily struggles to cope with the high and rising food costs, energy, transport, medical and education expenses and increased government levies.
The 2023 advertisement announced new financial assistance:
- Cost of Living Special Payment – up to $500
- Public Transport Vouchers – 600,000 PTVs worth $30 each for eligible household
- Enhanced Community Development Council (CDC) Vouchers -$300
- New MOE Financial Assistance Schemes: Revised income criteria for schools and institutions and ITE bursaries for 2023.
It was a display of public charity but with a limited reach except for the CDC Vouchers.
The increase of GST by 1% from 7% to 8% effective January 2023 has further pushed up food prices as all vendors have a reason to raise prices now. This surge in prices in local markets started in 2022 when the Government was determined to implement the GST hike of two per cent spread over two years.
Government-appointed agencies like the Committee Against Profiteering didn’t help either.
While some governments tried to rein in price hikes in the market place like the new Malaysian Prime Minister who declared his intention to control prices, our Government seems happy to see widespread price escalation. The Committee Against Profiteering was invisible, almost.
Deputy Prime Minister Lawrence Wong proudly mentioned this watchdog committee in Parliament, but no action seemed to have been taken to control prices.
In the meantime, our people are bracing themselves for ever more price increases:
“Textbooks on govt list now cost more after price freeze ends.”
“COE prices up for cars, motorbikes.”
“Rising property prices, GST hike top concern of young investors.”
“As interest rates rise, how will this impact local mortgages?”
“Some banks’ fixed-rate home loans now more expensive,” and To top it all, “ ERP rates at 7 locations to increase by $1 from 3 April.”
Why the need to raise ERP rates at this point in time along CTE in the morning hours except to extract more money from car owners?
Can’t the Government give some slack at this inflationary time?
Straits Times on 24 March confirmed inflation is real in Singapore: ”Singapore core inflation stays firm at 14- yr high of 5.5% in Feb.” (Core consumer prices, which exclude private transport and accommodation costs, are said to reflect the expenses of Singapore households more accurately.)
In the Government’s advertisements, “Supporting Households with cost of living,” it is easy to say “Prices are going up worldwide, including Singapore.” How did Singapore achieve the status of becoming the most expensive city in the world?
In a survey of 1200 business leaders, officials and experts from Sept 7 to Oct5, 2022, it was noted the cost-of-living crisis has emerged as the most severe global risk over the next two years.
Our Government also need not look so far as citing geopolitical tensions as a contributing factor to our country’s high cost of living. There are enough local, self-created driving forces to push up consumer prices in Singapore.
To help cool the temperature, the public media tries to play some role in changing the public’s thinking that inflation is slowing down by putting up headline like “S’pore inflation expectations ease from 11-year high” and affirming it with “consumers expect inflation to fall amid slowing economic growth and rising interest rates”.
It tries to create a positive illusion that better times are here soon. We know this is not true. These are empty words to expect prices to fall because consumers expect prices to fall.
In the marketplace, businesses like NTUC Fairprice, which prides themselves as social enterprises, continue to sell at higher prices than neighbourhood minimarts on a broad horizon. The Kopitiam brand, now owned by NTUC, isn’t more people-oriented.
Just hop across to Johor Bahru on the weekend to realize how far Singapore consumer prices have gone in a normal marketplace. I do not belong to the regular weekend crowd travelling to Johor, but I did spend five days there and Muar last year to be awakened that all is not well with Singapore’s high cost of living.
Singapore’s prices are grossly overpriced, from groceries like grapes and rice in the supermarket to shoes and underwear in a department store, eating in coffee shops or buying prescribed medications in dispensaries.
Price differences for prescribed medications can be up to 50 per cent cheaper in JHB dispensaries. It has little to do with the currency exchange rate.
I believe the root cause of the high cost of living is the policy of Singapore Corporatization. This policy requires even government agencies, like public healthcare, to generate revenue.
Apart from high rental cost in Singapore, another probable factor is excessive profiteering by Singapore enterprises. Behind this drive of high prices and cost of living is the Government policy of Singapore Corporatization; every government agency ought to generate some revenue, which drives up cost of living.
A most outrageous example is the current Geylang Serai Ramadan Bazaar from 17 March to 21 April, where stall rentals can range from $16,000 for a Fried Snack stall to $30,000 for a Kebab stall.
When a government agency, entrusted with organizing this bazaar, conveniently tendered it out to a private consortium for a hefty price, how can stall rental prices be kept low? In the process, the government agency earned a good revenue without any real work but, everyone, visitors, customers and stall holders contributed to it!
No amount of good news of over 2 million visitors (now revised upwards) to the bazaar can cover the bad governance of this project. Didn’t the Ministry of Finance (MOF) grant this agency an annual budget to carry out its public duties?
Are Singaporeans expected to swallow the high inflation and high prices in silence when our neighbour, Malaysia, with a weaker Currency (MYR) can enjoy a much lower cost of living and generally lower prices for groceries, food, medicines to private housing?
How can standard brands of milk powder in supermarkets or prescribed medications in dispensaries in JB cost 50 per cent cheaper than in Singapore?
Are Singaporeans customers being “fleeced” by our own business enterprises with complete immunity?
When even baby formula milk can be a target of theft and “FairPrice outlet locks up baby formula milk in trial to stop shoplifting,” it tells us that the financial health of some Singaporeans is near breaking point.
The government has always taken pride to be a global buyer of food supplies to ensure steady supply at competitive prices.
In terms of diversity, Singapore imported from 180 countries and regions in 2021. As FairPrice is a big buyer in the global market, does it buy at lower prices than AEON in JHB?
If not, why grocery prices in AEON are very much lower than FairPrice, even for imported fruits?
With a strong Singapore dollar over the Malaysian Ringgit, why are groceries not cheaper in Singapore? Yet inflation is rampant and hitting the financial health of average Singaporeans. If they have housing loans, as most of them do, their financial health is even under greater threat now.
Signs of people’s financial health breaking down are showing up. With the economy slowing down, more retrenchments and higher mortgage rates, more private residences are expected to be put up for auction this year, according to property experts.
However, it does not appear that the Monetary Authority of Singapore (MAS) is exercising control over banks raising mortgage rates which invariably drives up the cost of living and rental rates across the country.
It is the banks that are reaping billions in profits while the average Singaporean is facing immense financial pressure to keep up with the high inflation. Yet PAP MPs were silent in Parliament about the financial pain the average Singaporeans are suffering from the high inflation like nothing is happening!
With Singapore’s economy growing at 0.1 per cent in Q1, the high inflation will put even more financial pressure on the middle and lower middle class of the population.
With MAS keeping the Singapore dollar policy unchanged (i.e. no further appreciation of S$), its focus is now to defend the economy instead of ramping up the fight against inflation. With this monetary policy, “inflation is expected to stay elevated in the next few months.”
With inflation affecting a broad spectrum of the population and the government’s lack of a specific action plan to rein in the escalating price increases, the people’s financial health is likely to deteriorate further this year.
It does not help if “income growth hasn’t kept pace with inflation for 4 in 10, according to a research study of 1.2 million retail customers who use DBS Bank as their main salary-crediting bank.”
This study highlighted the plight of low-income households, defined as those earning less than $2,500 a month, and the baby boomers (those aged 58 to 76) have been among the hardest hit by inflation and sluggish income growth, pushing them to spend almost all of their income every month,” as stated in an ST article on 2 August last year.
The objective is to evaluate the extent to which the high inflation and high cost of living in Singapore have affected our financial health.
If we notice a visible change in our lifestyle or have a feeling to avoid certain regular dining places, I think our financial health is under threat.
On a personal level, as a retiree, I spent $11, 826.59 in 2022 for household expenses, fuel, food, etc. (excluding wet marketing, medical and all expenses without receipts (which amount to an additional $30%) and paid GST $714.87.
Based on this spending pattern, 8% GST would cost me $945.28 in 2023. It does not matter if we have retired or are jobless.
By now, we must recognize that there is little or no control over price increases and heavier financial pressure is expected.
Does a stronger currency really helps increase purchasing power of Singapore businesses and households, protecting them against the impact of s sharp rise in prices of imported goods and raw materials?
Is MAS’ monetary policy really effective in helping people to buy cheaper goods and services and reduce the high cost of living in Singapore?
Only DPM and Finance Minister Lawrence Wong can answer this question if he wishes!
A Senior Citizen who has seen better times.