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HomesingaporeWP's cost of living motion passed in parliament after significant amendments by...

WP's cost of living motion passed in parliament after significant amendments by PAP

SINGAPORE: A motion on the cost of living in Singapore, tabled by the opposition Workers’ Party (WP), was passed in parliament on Tuesday (Nov 7) but only after three significant amendments from the People’s Action Party (PAP).

In debating the amended motion, Members of Parliament (MPs) from both sides of the House agreed that the cost of living was an issue for many – but opposition and ruling party lawmakers clashed over how to deal with such concerns.

Twenty members of the House – MPs, Nominated MPs and Non-Constituency MPs and two political office holders in Acting Transport Minister Chee Hong Tat and Senior Minister of State for Foreign Affairs and National Development Sim Ann – spoke on the motion.

The amended version was passed around 10pm, after more than seven hours of debate. All eight WP MPs and two Progress Singapore Party NCMPs voted against it, while the PAP MPs present in the chamber voted in favour of.

WP’s original motion was titled “cost of living crisis” and stated “that this House calls on the government to review its policies so as to lower cost of living pressures on Singaporeans and their families”. 

But MP Liang Eng Hwa (PAP-Bukit Panjang) proposed two additions and a replacement for the phrase on reviewing policies.

His proposed amended motion read: “That this House acknowledges that cost of living is a global concern, and calls on the government to continue pursuing policies that together lower cost of living pressures on Singaporeans and their families, without undermining our fiscal sustainability and burdening future generations of Singaporeans.”

Explaining his amendments, Mr Liang said the debate should be about balance.

“I believe in today’s debate … we are not looking at either extremes,” he added. “That is, on one extreme, we pass on the full impact of all the cost increases to consumers; on the other extreme, the government fully shields people from all impact of cost increases.” 

No government would adopt either approach, said Mr Liang.

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LEAVE “NO STONE UNTURNED”

In introducing the original motion, Leader of the Opposition and party chief Pritam Singh said the WP had reiterated cost of living pressures on Singaporeans in both its New Year and May Day messages earlier this year.

While the WP acknowledges one-time reliefs extended to eligible households, the House must leave “no stone unturned” because this has become a “crisis” for some Singaporeans, he added.

Measures suggested by WP MPs would help Singapore move beyond one-time fiscal handouts and “explore possible structural changes to existing policies”, said Mr Singh. 

The suggestions also “account for the reality of today’s and tomorrow’s cost of living environment”, he said. 

While the Monetary Authority of Singapore (MAS) has indicated that inflation has slowed and core inflation is projected to come down, feedback received by WP suggests that cost-of-living worries for Singaporeans are “clearly moving in the opposite direction”, added Mr Singh, touching on the “cost-of-living reality” facing Singaporeans.

Acting Minister for Transport Chee Hong Tat acknowledged that inflation has affected all Singaporeans. 

“We understand the pain that our residents are going through and we feel for them and their families,” he added. 

On top of imported inflation, Singapore is also facing rising domestic costs with a tight labour market, low levels of unemployment and rising real wages for workers across the board, said Mr Chee. 

Inflation has peaked and is on a broad moderating path, he noted. Core inflation fell from a 5.5 per cent peak in January to 3 per cent in September, and is expected to edge down further to between 2.5 per cent and 3 per cent in December. 

Including the impact of the Goods and Services Tax rate increase planned for January, core inflation for 2024 is projected at 2.5 per cent to 3.5 per cent, said Mr Chee. 

“Fortunately, the impact of GST increase is one-off. It should not cause an ongoing increase in the CPI (Consumer Price Index) in future years.” 

But the government remains cautious because the global situation is uncertain, said Mr Chee, adding that further shocks to global energy and food prices could bring additional inflationary pressures and economic slowdown.

The government has cushioned the impact of global inflation with a multi-pronged approach, with MAS also helping by strengthening the Singapore dollar, said Mr Chee.  

Singapore also keeps its economy competitive to create good jobs and sustain real income growth for Singaporeans, he continued, noting that median real income grew by 1.8 per cent per year between 2017 and 2022. 

But median real income declined in the first half of this year due to the weaker economic outlook and elevated inflation. “Ups and downs” are understandable, said Mr Chee. 

In the long run, the key to sustaining real wage growth is to raise productivity and raise the skills of the workforce, he said, adding that the government has invested in initiatives to support businesses and workers in this area. 

The government also ensures that basic needs like education, healthcare housing and public transport remain accessible and affordable for all, said Mr Chee. 

“Everyone receives some help in these areas, but those with less receive more support. It is a fair and progressive system.”

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A SLEW OF WP PROPOSALS

In his speech, WP MP Dennis Tan (WP-Hougang) said the frequency of feedback from residents about the rising cost of living has “increased tremendously” in the last six months. He added that this was not just from lower-income residents.

Mr Gerald Giam (WP-Aljunied) meanwhile stated that Singapore faces an “undeniable upward trend” in the cost of living, driven by various factors. 

He said that contrary to what Mr Liang “seemed to imply” with his amendments, domestic policy decisions such as the GST hike and rising water and electricity tariffs as well as public transport fares, coupled with the “skyrocketing” cost of COEs, also feed into the increase in the cost of living Singaporeans are experiencing.

Mr Singh suggested that the government look into restructuring water pricing tiers to “more accurately” reflect water usage, in order to incentivise water conservation and lower costs for households.

This should be coupled with a “graduated” water conservation tax regime, he added.

Separately, among other suggestions, he also pointed out that there was scope to allow some senior citizens with healthy MediSave balances to deploy them for their own use beyond what is allowed today. 

“This would help some senior Singaporeans who have to cope with cost-of-living concerns that can be aggravated especially if they are no longer working,” he said.

Ms Sylvia Lim (WP-Aljunied) also said that more could be done to encourage electricity conservation and bring down costs for consumers. 

She said the government should consider a pricing structure based on time of use, and which discourages electricity consumption at peak hours.

“Such reforms would recognise that electricity is a basic good, and yet incentivise energy conservation,” she said.

Mr Louis Chua (WP-Sengkang) asked if the government should be “insulating our people instead of hitting them more”.

He observed that the government’s fiscal position is shaping out to be “much better than projected” and Singapore has already achieved the revenue increase that the GST hike was meant to bring.

On that note, Mr Chua raised the notion of deferring the tax increase, asking if such a move would really “store up more problems” for the future.

MULTIPLE FISCAL DEMANDS 

Several PAP MPs on the other hand spoke out in favour of Mr Liang’s proposed amendments, citing recent government measures even as they concurred with the WP’s intention to address cost-of-living concerns for Singaporeans.

Mr Saktiandi Supaat (PAP-Bishan-Toa Payoh) said there were “a suite of policies” to keep day-to-day costs down, such as Community Development Council (CDC) cash vouchers and the requirement for all coffee shops leased from the Housing Board to offer budget meal options to diners by 2026.

“Ultimately, the global inflationary environment and pressing needs from Singapore society such as the aging population mean there are multiple fiscal demands that the Singapore government needs to meet,” he said.

“As a society, we will all need to take on a fair share of these cost pressures … The government will ensure that it is affordable for the average Singaporean while taking special targeted measures to provide more assistance for the low-income groups who have heavy financial burdens.”

This approach is “more prudent” than leaving “real demands” to future years, he added.

Mr Desmond Choo (PAP-Tampines), who is also the assistant secretary-general of the NTUC trade union, added that FairPrice Group’s Pioneer Generation, Merdeka Generation and CHAS Blue discount schemes have brought about S$65.5 million worth of savings since 2015.

Some MPs also argued against using the word “crisis” to describe the cost-of-living situation.

MP Sitoh Yih Pin (PAP-Potong Pasir) said the word implied a proposal to draw on the country’s reserves. 

“I noticed that the WP’s motion used the word ‘crisis’. I shiver and shudder for a while when I saw the word ‘crisis’ because crisis means I think somebody is going to suggest a draw on reserves,” he added.

“To me this is a problem, it is a big problem. I wouldn’t classify it as a crisis.”

Similarly, Nominated MP Mark Lee urged against framing the cost-of-living narrative “through the lens of panic” implied by “crisis”. 

“I do agree in addressing serious concerns on our cost of living, but to declare a crisis is to imply that our existing policies have faltered significantly, that our systems are in disarray, and that our societal frameworks are on the brink of failure. This, I do not agree (with),” he said.

Ms Tin Pei Ling (PAP-MacPherson) called for more support to address an increase in cooked food prices, which rose despite the National Environment Agency not increasing rent for hawkers in most cases. 

Some hawkers in her MacPherson constituency told her that they “could not help but” increase prices by up to 10 per cent this year. 

“If I may warrant a guess, costs must have increased at every layer of their supply chain and the pile-up was too much for our hawkers to bear,” said Ms Tin, adding that a double-digit percentage increase was highly significant. 

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In her speech, Senior Minister of State for National Development Sim Ann addressed the call by WP’s Mr Chua to delay the GST increase for one to two years, by pointing to the Assurance Package announced at Budget 2020. 

The package allows the government to delay the impact of the GST increase for most Singaporean households by at least five years, and by about 10 years for lower-income households, she said.

She also noted PSP secretary-general Leong Mun Wai’s concerns that businesses would unjustifiably raise prices by attributing it to the GST increase, and stressed that the Committee Against Profiteering is acting against that.

ENSURE POLICIES “FIT FOR PURPOSE”

In his closing speech, Mr Singh said the WP had no “substantive quarrel” with Mr Liang’s third amendment, which would not substantially change the thrust of its motion.

The WP’s proposals neither undermine Singapore’s fiscal sustainability nor will they unduly burden future generations, he said.

However, Mr Singh said the WP disagreed with the other amendments. He noted that the first amendment, which acknowledges the cost of living as a “global concern”, read as an attempt to minimise the role the government can and should play in reducing cost of living burdens on Singaporeans.

“The Workers Party believes that we should continue to look beyond short-term relief in addressing this cost of living crisis and to relook at prevailing orthodoxies on other schemes so as to lower costs for Singaporeans and their families,” he said.

Mr Singh added that WP also disagreed with the use of the words “continue pursuing policies” in Mr Liang’s second amendment, which suggest that “the status quo is fine”.

“Indeed, we have proposed specific structural changes to the system that we believe will work better than current policies,” said the WP chief.

Mr Chee said the government has overall “moderated considerably” the impact of inflation on Singaporeans, especially for lower and middle-income segments.

“We have done so on a sustainable basis, spending within our means and helping as many people as possible. We will continue to monitor the need for more targeted support if inflation or economic outlook worsens,” he said.

“We will do so while maintaining discipline in ensuring that our interventions are fair, sustainable, and effective.”

He added the PAP welcomes Mr Singh’s call for a review to make sure policies are “fit for purpose”, and said the government has already announced changes to a number of policies.

“I want to assure you this government will be responsive to the concerns of our people. And we will continue to do our best to mitigate cost pressures for businesses and families,” Mr Chee said.

“And importantly, we will do this in a way that is responsible and right for Singaporeans today and tomorrow.”

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