Speech By Mr Mark Lee Kean Phi, Nominated Member Of Parliament, On the Cost of Living
COST OF LIVING CRISIS: That this House calls on the Government to review its policies so as to lower cost of living pressures on Singaporeans and their families.
Mr Speaker Sir,
Our nation is undoubtedly feeling the ripples of global economic turbulence, and for many Singaporeans, the pressure on their household budgets is a source of genuine concern. We must, and we should, take these concerns seriously, and it is our solemn duty to approach this concern with the seriousness it deserves. It affects the daily lives of our people, the vitality of our markets, and the health of our national economy.
Yet the term 'crisis' is a powerful one, evoking images of insurmountable challenges and imminent peril. We must therefore use this term judiciously, especially when the resolve of a nation like ours is called into question. I stand today not to minimize the concerns of our citizens regarding the cost of living but to contextualize the narrative we choose to represent it. It is our collective responsibility to analyse and approach this issue with a clear-eyed perspective, and not through the lens of panic that the word 'crisis' might imply.
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. Singapore stands today as a global hub of commerce, a testament to sound economic principles, and a beacon of stability. This did not happen by chance, but through the meticulous crafting of policies that are both robust and responsive.
Today, we stand united in our commitment to tackle a concern that lies at the core of every Singaporean’s daily life—the escalating cost of living. We are facing a period where rising costs are affecting everyone – from the price of groceries to the cost of housing. These are not just random fluctuations; they are the result of complex global economic trends, including widespread inflation that many countries are dealing with. This is not just a short-term hiccup, but a significant shift that requires us to reexamine and adjust our approach.
According to data published by the International Monetary Fund, global inflation currently stands at 6.9%, having eased slightly from last year’s high of 8.7%. The Monetary Authority of Singapore's core inflation measure stands as a testament to these challenges, with projections indicating a rate of around 4% for the year 2023. While we see a moderate level of inflation as a hallmark of a thriving economy, the excess erodes the economic well-being of both companies and consumers.
The businesses that drive our economy are feeling the effects of today's unpredictable economic climate firsthand. A recent Singapore Business Federation Manpower and Wages Survey conducted in Jul 2023, 45% of SMEs and large enterprises expect their revenue to fall in the next 12 months, and an overwhelming 85% of companies expect business cost to increase between 10% to 50% in the next 12 months, with SMEs projecting a steeper rise in costs.
We have seen the cost of running a business go up due to higher prices for materials and goods, a consequence of the pandemic's lingering disruption to how we get products from one place to another.
Additionally, recent international tensions, especially the conflict between Russia and Ukraine, have caused prices for fuel and food to soar – expenses that affect not only companies but also the daily budgets of every household. The price of rice, a staple in every Singaporean home, has been subject to fluctuations due to trade restrictions and weather-related production issues in exporting countries. These challenges are complex, but they have very real impacts on our community, from the corner store to the dinner table.
It is imperative to acknowledge that the weight of these escalating costs cannot be shouldered by the business community alone. With each incremental rise in operating expenses, there is a cascade of effects, impacting on employment, wages, and the price of goods and services.
We need to think critically about our next steps, which involves making sure that our policies are sustainable for the long haul and will truly help alleviate the financial burden on our citizens. It is a time for us to come together, understand the realities we face, and take thoughtful action to secure our economic future.
Our government has not been a passive observer to these trends. Through monetary policy, they have taken decisive steps, allowing the Singapore dollar to appreciate in a controlled manner to counter the cost of imports. This is a strategic move, balancing the immediate needs with medium-term outcomes, and is but one prong of their approach.
On the fiscal front, the government have been both responsive. Consider the Assurance Package enhancements announced in Budget 2023, which introduced or expanded upon several initiatives. The Cost-of-Living Special Payment provides direct relief to families, helping to mitigate the immediate impact of rising prices. U-Save Rebates have been a buffer for households against the increasing utility bills as energy prices soar globally. These measures are carefully designed to ensure that the additional costs are not borne by those least able to shoulder them.
The government efforts extend beyond immediate relief. The Enterprise Innovation Scheme and the enhancements to the SME Co-Investment Fund exemplify the commitment to fostering a fertile environment for businesses to innovate and grow. A concrete manifestation of this commitment is seen in our investment in the tech industry, supporting the creation of high-value jobs and the development of cutting-edge products that not only serve local needs but have the potential to meet demands globally.
As we continue to bolster our economic resilience, we must also fortify the social fabric that holds us together. This involves maintaining fiscal responsibility and optimizing social support measures to effectively reach those hardest hit by cost-of-living adjustments. A clear example of our targeted approach can be seen in the enhancements made to the Child Development Account, providing additional support to young families investing in their children's future.
Alongside these measures, the government has been vigilantly monitoring the business sector to safeguard against any instances of profiteering, which is a concern for many consumers amid these tough times. The Committee Against Profiteering (CAP) was reconvened on March 16, 2022, under the leadership of Minister of State for Trade and Industry, Ms. Low Yen Ling. This committee, which includes Members of Parliament, industry stakeholders, and grassroots organization representatives, actively investigates any feedback regarding unjustified price hikes of essential products and services. This scrutiny is crucial in ensuring that the price increases that consumers face are indeed reflections of the economic climate and not the result of opportunistic behaviours that could undermine trust and cohesion in our society during these testing times.
Even as global inflationary measures are set to moderate going forward, Singapore must continue to navigate cost-of-living issues in a way that is responsible, effective, and forward looking. The business community urges all stakeholders in society – individuals, families, community leaders, businesses, investors, and the government to work together in trusted partnership towards sustainable and viable growth that all of us, as a national collective, will benefit meaningfully from.
As we look ahead, the business community call for four key shared commitments.
- Our first shared commitment is to understand the root causes of our cost-of-living challenges with clarity and precision. We are not just facing local issues, nor can it be solely attributed to ineffective policy making; We are dealing with the ripple effects of global market trends and geopolitical events that have affected many countries, including Singapore. We need to dissect these complex dynamics thoroughly. By doing so, we can craft solutions that are right for our unique situation in Singapore while also fitting into the larger global puzzle. This is about making well-informed choices that serve us today and align with the world's economic directions.
A common pitfall for many nations has been the reliance on policymaking grounded in evidence or statistics that, unfortunately, are reflective of past conditions rather than the present reality. Such a lag can lead to suboptimal outcomes. Take, for instance, the Federal Reserve, which, having underestimated inflationary trends, found itself compelled to implement rapid interest rate hikes.
To refine our policymaking, a more dynamic approach is called for. This could be achieved through enhanced collaboration with Trade Associations, ensuring a continuous dialogue and close listening ear between their diverse membership and government policymakers. Such a two-way exchange promises to bring real-time ground-level insights to the forefront, allowing for the crafting of more responsive and agile solutions to the economic challenges we face. - Our second commitment is to uphold strict fiscal discipline to protect our economic future. It is essential that we sharpen the focus of our social support programs, ensuring they deliver maximum benefit to those most affected by rising costs. We must also continue to reward innovation and productivity across all sectors. By doing so, we're not just spending money more wisely, but also strengthening the foundation of our economic system.
- The third cornerstone of our approach is a commitment to thoughtful policymaking, avoiding quick fixes that might cause more problems than they solve. Policies must be carefully calibrated to encourage growth and increase earnings without inadvertently increasing the national debt or taxes in a way that could worsen living costs. Our aim is to create a cycle of prosperity—spurring growth that leads to better wages and smoothing out inefficiencies that inflate costs.
- Our fourth commitment is fortifying the bonds of our community. In our journey to overcome and adjust to the evolving challenges of cost-of-living, it calls for unity and collective resolve, not division. We must resist the inclination to frame our challenges as conflicts between different segments of our society—be it local versus foreigner, business versus worker, or government versus citizen.
Instead, we must recognise that these economic hurdles are shared challenges that will be best overcome when we, as a united nation, pull together in the same direction.
Fostering this unity requires a commitment from all sectors of society to engage in open, constructive dialogue. We must break down the barriers that hinder collaboration and build bridges that allow us to share insights and develop holistic solutions. By standing in solidarity—citizens and government, businesses and workers, locals and internationals—we can harness the full strength of our national character to address the cost-of-living issues in a manner that is not only effective but also equitable.
In conclusion, while we acknowledge the language of 'crisis' may capture the immediacy of the issue, we must frame our dialogue in a manner that reflects not panic, but preparedness—not reaction, but readiness.
The business community is convinced that the key to managing living costs effectively lies in bolstering our economic base. We must channel our efforts into enhancing our competitiveness, encouraging innovation in business, and elevating workforce skills. Expanding our economy's capacity in this way is crucial for our ongoing success and for our ability to provide social support.
It is through these enduring strategies that we'll build an economy robust enough to support its people through every challenge, ensuring that we are always ready to lend a hand to those who need it most.
Our unity is our strength, and it is together that we will craft a sustainable future where economic vitality is matched by social harmony and inclusiveness.
