Prices Charged at Hawker and Food Centres

Hawker centres are a unique Singapore feature and they are, in my opinion, an essential social infrastructure. They are places where Singaporeans from all walks of life can gather, interact and enjoy fresh food at affordable prices. Over 85% of our hawkers today pay less than $1,500 per month in rent and, in fact, 41% of them are paying subsidised rental ranging from $160 to $384.

Three years ago, we made further policy changes to remove the speculative element from hawker stalls. For instance, now we insist that all hawker stalls have to be personally operated. The stalls are not a way for landlords to make money. The National Environment Agency (NEA) has disallowed the practice of assignments and subletting. Furthermore, NEA also abolished the concept of "reserve rent" for hawker stalls during the bidding process. NEA offers available vacant stalls at monthly tender exercises and accepts all valid competitive bids. This has resulted in the current situation where about half of the successful bids are now below 85% of the assessed market rent. The tendered rentals have been falling and, in fact, fell by 3.4% last year. The lowest successful tendered rental is now $1 a month – not a typo error!

To provide Singaporeans with even more affordable food options, we announced that the Government is building 20 new hawker centres, particularly in estates that have fewer cooked food stalls. Another trial that we are embarking on is the appointment of social enterprises to act as managing agents. For instance, NEA has appointed NTUC Foodfare Co-operative Ltd and Fei Siong Food Management Pte Ltd as managing agents to run two new hawker centres at Bukit Panjang and Hougang respectively on a not-for-profit basis.

These social enterprises, we hope, will bring new ideas based on their experience in food and beverage operations. We hope they will diversify food options, enhance the dining

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experience for patrons and raise the productivity for hawker centres, while keeping food prices affordable. For example – and this is a useful measure – both NTUC Foodfare and Fei Siong will offer discounted bulk purchasing of ingredients to help hawkers reduce the cost of raw materials. In fact, it is the cost of ingredients and raw materials that is the biggest cost driver for hawker stalls, not rentals. Fei Siong has also launched a programme to nurture a new generation of hawkers by providing training and opportunities to enter this field. We believe these initiatives are important and we hope they will help ensure the sustainability of hawkers in the future.

NEA also welcomes other initiatives that the social enterprises may decide to roll out. For instance, they have insisted that the hawkers in these two centres offer at least a few budget meals on the menu. Over and above that, for low-income families which need help with their basic needs, the Government provides additional cash assistance and vouchers through the ComCare Short- to Medium-Term Assistance Scheme. These schemes are all designed to ensure that there will always be a low-cost option for food on the table.

But there is one cost that has gone up and that is manpower cost, particularly because we have increased the wages for cleaners through progressive wages. Members of this House will recall that the Ministry of the Environment and Water Resources (MEWR) was the first to move on progressive wages by effecting legislative changes and this has resulted in what I believe is a well-justified and well-deserved increase in wages for cleaners. There has also been some increase for hawker assistants. Again, I would expect that Members of the House would support these wage increases. Our hawkers will have to prepare for a future where wage costs will be higher and, like many small- and medium-sized enterprises (SMEs) in Singapore, they will have to try to figure how to do more with less manpower and, basically, it is about enhancing productivity.

Hawkers are free to set their own food prices, taking into consideration their operating costs, market competition and what patrons are willing to pay. They do not need to submit their prices to NEA for prior approval.

The social enterprises which are managing our hawker centres on a pilot basis are required to submit audited accounts and detailed management reports to NEA. NEA will ensure that the interests of hawkers, cleaners, hawker assistants and patrons are well taken care of. We believe these will enable us to ensure that hawker centres continue to fulfil their very important social function in Singapore.

I thank the Minister for his response. I really appreciate the details. Just two supplementary questions. The first is with regard to the sharing of responsibility for keeping food affordable for the working class. A lot of hawkers are quite sympathetic to the need to keep food affordable but they find the idea of price

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caps quite offensive because it feels like the responsibility for keeping food affordable is passed on to them by the social enterprises in charge and, by extension, the agency that endorses them. The perception, and it may be wrong, is: "How can the hawker be the only one held responsible for keeping food affordable?" So, the first question is: can the Ministry clarify how it works with all stakeholders to help them understand how they all share the responsibility of keeping food prices fair?

The second question is about price versus value. There is an unhappy sentiment on the ground that the discussion about hawker food at the top is overly centred on price rather than value. The idea being, "What if we are keeping food prices down because of cost-cutting and low quality, low nutrition ingredients?" So, the question is: how does the Ministry work with the stakeholders to not just look at keeping prices fair but keeping the value high, in particular, cultural heritage value and the nutritional value of hawker food?

I thank the Member for her equally detailed supplementary questions. The issue of affordable food is very important. It goes beyond simple economics. This is an important social and, dare I say, even politically charged issue in Singapore. My approach is very simple. I believe there must always be a low-cost option on the table and this low-cost option should be available on the table in a place where people from all walks of life have access to. This democratisation of the dining experience in Singapore is something valuable; it is part of the social glue that binds us together; it is part of what defines us as Singaporeans.

Once we accept that there is value in ensuring that there is always a low-cost option on the table, the next question, as the Member has correctly identified, is that there are multiple stakeholders. There used to be this thinking – which, fortunately, has now been debunked – that the main cost driver was rentals. With the policy changes over the last several years during the term of this Government as well as the data that has emerged, it is very clear now that rentals are not the major cost drivers.

Nevertheless, as the Minister-in-charge of NEA, I have done my best to push rentals down. I have done that by increasing the supply. I have done that by removing the speculative element. I have done that by ensuring everyone knows that this is about food and this is not a property play. I have also done that by removing reserve rents. I have also instructed NEA to accept all valid competitive bids and, hence, as I have told the House, the lowest successful tendered bid to date is $1.

All that has been achieved. The data is also out there to prove that 85% of our hawkers pay less than $1,500 of rental. Rent is coming down; it is not the main component of operating cost. If anybody has lost out due to the rental reduction, it is the main landlord which, in this case, is the Government. I am prepared to take that because I believe this is

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social infrastructure.

The next important issue is about manpower. Yes, I stand guilty as charged for raising the cost of cleaning in Singapore. But I think I stand with the support of all of the Members that we were right to impose progressive wages and to increase wages and employment conditions for cleaners. So, we have lowered rentals; but yes, manpower cost has gone up.

We have further evidence that the key cost driver is not even manpower, but it is actually ingredients. That is really the reason why I was so keen to get social enterprises involved and, in particular, NTUC FoodFare. Members will recall nearly four decades or more ago, when we were worried about the cost of raw food, the advent of NTUC FairPrice, the social enterprise supplying raw food at very competitive prices, not subsidised, but very competitive prices. It had a salutary effect on the rest of the market. I am trying and hoping that this same approach would work for cooked food as well.

Hence, I am happy that NTUC FoodFare took up the challenge. They are not landlords, they are managing agents. And I have told them very clearly that my main objective is help keep prices affordable as well as bring down the cost of raw ingredients for hawkers. Everything else is an extra.

Yes, I know there has been some disquiet about this insistence on budget meals. But actually, this is not a new idea. All of us will remember school canteens and, even today, workplace canteens where, in exchange for low or subsidised rentals, the hawkers sell their food at low prices or even at prices which are approved by the landlord. This is a system in which by having some price restraint, you are prepared to accept lower rentals and you do your best to bring down the overall cost of doing business. I hope you will appreciate that it is a tight rope, it is a balancing act between hawkers, employees, people of Singapore and the need to make it affordable and accessible to everyone.

This is the journey we have embarked on. This is a pilot, in a sense, because we have only a few centres which are run by social enterprises so far. Let us take a data-driven approach, watch the prices, quality of the food and nutrition and let us calibrate the policy along the way.

My final point is that we will inject more transparency into this system. Since I am also overseeing Smart Nation initiatives, we are looking at having apps which will display the prices of food in every single stall in Singapore; maybe in real time, maybe even to allow crowdsourcing function, so you can tell us whether you think it is value for money and maybe the experts would even be able to assess nutritional value and the rest of it.

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Let us give this system a chance. I want to assure all the stakeholders in this important institution that we are doing our best to make sure hawkers gain, patrons gain. If anyone loses, it is NEA and the Government, but I think that we can and we should be prepared to tolerate that.

Madam, a supplementary question. Many are concerned that with the rising manpower cost and manpower shortage, whether the standard of cleanliness and the hygiene level in the hawker centres will also be affected. I would like to know whether the Ministry has plans to incentivise and encourage all the stakeholders to do more to ride on the new technology in the way that they handle and redesign the work process of the cleaners as well as, for example, food waste management and dish washing.

Mdm Speaker, the answer is yes.

Mdm Speaker, I represent the Consumers Association of Singapore (CASE). When we do a survey of hawker food, many of the stalls do not put up the prices of the food that they sell. Since this is a new approach, can I ask that NEA also require that the food sellers, the stalls selling food, also prominently display every item of food that they sell?

That is an idea worth studying although I do not really want a whole facade filled with prices and menus. Let us be a bit practical. We all go to hawker centres; we all have our favourite stalls; we all know what our favourite options are. By and large, the system works. Although hawkers are free to charge what they think the market will bear, I think Singaporeans vote with their feet and their stomachs, so that is usually how it works in practice.