RESPONDING to opposition calls for Singapore to review its policies in the light of inflation, Senior Minister of State for Finance Chee Hong Tat said existing approaches are working well, and that the suggested changes may have worse outcomes.

On Tuesday (Nov 7), Leader of the Opposition Pritam Singh and fellow Workers’ Party (WP) MP Louis Chua filed a parliamentary motion for the House to call on the government to “review its policies so as to lower cost-of-living pressures”.

Arguing that one-off handouts are helpful but that structural policy shifts are still necessary, WP MPs suggested tweaks to specific policies.

Singh and fellow Aljunied GRC MP Sylvia Lim suggested greater tiered pricing for water and electricity, as well as differentiated rates to encourage off-peak consumption.

Sengkang GRC MP He Ting Ru suggested more MediSave top-ups and yearly updates to MediSave withdrawal limits to reflect inflation.

Other WP MPs suggested reviews of public health means-testing criteria; an overhaul of the public transport model; and measures to manage certificate of entitlement and housing prices, among other things.

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Chee rejected the idea of tiered pricing for water and electricity, saying that the costs of providing these key services are inevitably affected by rising inflation.

“It is fair for these cost increases to be borne by the users,” he said, reiterating the government’s aim of ensuring prudent usage. Singapore’s water is priced to recover the full cost of supply and production, he noted, and additional pricing tiers could distort the incentive to conserve water.

Essential services are still kept affordable with existing subsidies and targeted support, he added.

Senior Minister of State for National Development Sim Ann highlighted two key principles: first, preserving market principles and not overregulating; second, fiscal sustainability. The market should be allowed to allocate resources and determine prices, while the government can intervene decisively where market failures exist, she said.

More generally, Chee noted that inflation has been a global phenomenon – and that in Singapore, it has peaked and is moderating. But he acknowledged that Singaporeans feel cost-of-living pressures and stressed that the government “(stands) ready to support Singaporeans”, recapping existing support measures.

Before Chee’s speech, People’s Action Party (PAP) MP Liang Eng Hwa proposed three amendments to WP’s motion, removing its call for policies to be reviewed.

The amended motion would instead “acknowledge that cost of living is a global concern”, and call on the government to continue pursuing its policies “without undermining our fiscal sustainability and burdening future generations of Singaporeans”.

Singh asked Speaker of Parliament Seah Kian Peng if this might qualify as a “very significant change to the original motion”. But Seah ruled that it covers the same topic and falls “within the ambit of the original motion”.

In his closing speech, Singh rejected the first two amendments.

The first, he said, seemed to minimise “the role that government can and should play” in reducing Singapore’s cost of living burdens, while the use of “continue” suggested that “the status quo is fine”.

“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,” Singh said.

Other PAP MPs supported the proposed amendments. Tampines GRC MP Desmond Choo argued that the focus should be ensuring real wage growth through a tight labour market and productive workforce.

Macpherson SMC MP Tin Pei Ling warned that forcefully lowering prices will lead to more consumption and further price increases. 

The motion was eventually passed with all three proposed amendments; WP MPs objected to the first two amendments as well as the final motion.

Apart from proposing policy changes, WP MPs reiterated earlier doubts about the necessity of the next goods and services tax (GST) hike in January. Singh noted the government’s ability to provide an off-budget cost-of-living package, which had been announced in September.

Progress Singapore Party (PSP) Non-Constituency MP (NCMP) Leong Mun Wai separately called for reducing GST back to 7 per cent, as one of five measures to tackle the cost of living.

Other suggestions included raising the S$1.1 billion cost-of-living support package to S$5 billion and implementing a minimum wage of S$1,800 for Singaporeans.

In response, Chee reiterated the need for the GST hike and emphasised the need for fiscal prudence, especially with higher social spending expected in future.