Cost of Living Crisis

Mr Speaker, Sir, the rising cost of living across the globe has become a global concern. We have seen sharp price increases in Europe, the United States (US) and other continents; triggered of by a series of supply shocks that leads to sharp increases in energy, food and commodity prices as well as the demand arising from post-COVID recovery.

In the largest economy in the world, the US, its Federal Reserves or the Fed has raised its interest rates 11 times in just about one and a half years to tame the stubbornly high inflation, lifting rates from about 1% to near 5.5% today. So have the other central banks near and far, raising rates to manage and dampen demand.

Singapore is not spared from this global inflationary crisis. While inflation has come down from its peak, households are still having to cope with the impact of the various price increases. In addition, we are also faced with domestic cost pressures and, in particular, we are in this necessary transition to uplift the wages of fellow Singaporeans, especially the low-wage workers.

Sir, cost of the living is a topic that I have filed among the most PQs in recent years, so had many of the Members of Parliament from both sides of the aisles. We can feel firsthand the impact of the cost of living increases in our neighbourhood centres, at our workplaces and in our daily living experiences. Our low- to middle-income Singaporeans are particularly affected.

So, what is our counter to these series of rising costs?

In the case of Singapore, fortunately, we do have a suite of policy tools that help us mitigate the impact of rising cost pressures.

First, our strong Singapore dollar. Our strong Singapore dollar has been an effective broad-based tool to manage imported inflation as almost everything that we consume are imported. The Monetary Authority of Singapore (MAS) has tightened our monetary policy five times since October 2021, in essence, strengthening the Singapore dollar against the currencies of our major trading partners. Without the strong Singapore dollar, our inflation and hence, cost of living situation would have been even more severe.

Here, I just want caution that a strong Singapore dollar is not always a given. It is not a drop from sky for us. We cannot just demand a strong Singapore dollar or decree as such. It depends on the markets, which, in turn, depends on whether we have the strong economic fundamentals to deserve this value of the Singapore dollar. If our fundamentals are weakened, you can rest assured the markets will find a new value for the Singapore dollar almost instantly.

Fundamentals such as economic dynamism, competent economic management, financial reserves, political stability, social harmony and importantly, prudent fiscal management. These factors have a bearing on our international ratings and the confidence in the Singapore dollar and hence, preserve our purchasing power. So, let us jealously safeguard this very important asset that we have and not undermine it.

Secondly, competitive business and enterprise ecosystem. Having a competitive business landscape at both the macro and retail level are important to keep prices in check and to prevent profiteering. Essentially, we want consumers to have choices and have the option to compare prices, whether it is to choose a new mobile phone plan or to buy groceries from among the supermarkets that we have.

In Chinese, we call this "货比三家" or "货比或多家", or to be able to compare prices across three or more shops.

Years ago, I was among the strong proponents for the Government to resume building hawker centres and was glad that the Government eventually reversed its policy in 2011 to start building hawker centres again. Hawker centres, besides keeping our hawker culture going, help to create a competitive environment in the eating house space, directly competing with coffee shops and other eateries. More importantly, it offers consumers choices and more value-for-money options.

We need to keep the business ecosystem competitive, including having diverse sources of supply, just in case we are being outpriced by some of these traditional sources of supply.

Thirdly, jobs and income growth. Having job and income growth helps an individual and their family cope with the cost of living. Growing the economy to create good jobs and better pay is critical, which is why we continually invest in skills upgrade to improve employability.

We need a business-friendly ecosystem and to continually attract investments so as to keep the economy strong and vibrant to create good jobs. Having a strong economy also helps generate the tax revenues needed to pay for our growing expenditures. This is another important component – jobs and income growth.

Fourthly, direct Government assistance. Beyond the multi-pronged macro strategies, direct Government assistance is the key source of support to help Singaporeans cope with rising costs, both the subsidies and support packages.

The Government do subsidise substantially in a range of areas – healthcare, housing, education, transport, childcare and a range of social programmes, amongst others. To help Singaporeans better cope with the current cost of living concerns and the new GST rates, the Government has provided direct support assistance through the Budget and off-Budget measures since last year.

We have the permanent GST Voucher scheme and the Assurance Package. Both have been enhanced. In September this year, the Government announced an additional $1.1 billion Cost of Living Package to provide relief to lower- to middle-income families. This includes a further $800 million enhancements to the Assurance Package as well as an additional subsidy of about $300 million to moderate the fare increase of public transport.

Because of the various enhancements to these packages and the payouts that are spread throughout the year, the Ministry of Finance (MOF) now publishes the calendar view of the monthly disbursements so that it is easier for Singaporeans to anticipate the payouts each month.

I must say that when I distributed this handout to my residents during a Kopi Talk, all of them welcomed this and kept this so that they can track whether they are receiving all these payouts. It is something that is helping our residents directly.

Sir, I believe in today's debate on the Motion on cost of living, we are not looking at either extreme, that is, on one extreme, we pass on the full impact of all the cost increases to consumers and, on the other extreme, the Government fully shields people from all impacts of cost increases.

I believe no government in the world would adopt either extreme approach. For that matter, no Town Councils will do that as well.

Rather, we are here debating what that balance is. How could we continue to pursue polices which, together, lower cost of living pressures on Singaporeans and their families, but without undermining our fiscal sustainability and being responsible to future generations?

Sir, I want to add a couple of points before I sum up.

Firstly, this global inflationary situation, while we hope that it will go away soon, may actually last longer that we thought. The unending war in Ukraine, potentially the escalation of conflicts in Middle East, superpowers' geopolitical tensions, the rivalry that is being played in the global supply chain, the adverse weather that we now see more often – all these could fuel further shocks to the energy, food and commodity markets. So, we must be prepared that the high-cost situation around the world could worsen or continue for a prolonged period of time.

In other words, we must be prepared to sustain the long haul.

Secondly, these additional costs whether it is from having to pay for higher energy costs, higher food costs, higher imported material costs and so on, are real costs or outflows to us as a country entity. For example, in the production of clean water, the higher energy costs to treat and recycle water is an outlay that will flow out of the country to the energy producing country.

My point here is that we need to be able to always have the means to pay for these costs, which is rising in our current situation. Just because we freeze prices or put a cap to price increases, the outflow required to pay for these external costs does not just disappear magically.

The only way to do it on a sustainable basis is to be able to generate inflows to be able to pay for these additional costs.

Hence, the need to grow our economy to build capabilities to generate revenue, the need for a foreign exchange to create jobs, better wages so that individual and households can have the means to cope with the cost of living. This is more so for a small island state like Singapore with no natural resources. We must be able to get our inflows so that we can pay for our outflows.

Sir, we must get our fundamentals right. This is the only sustainable and sound way forward as we continue to tackle expected and unexpected challenges and crises ahead in this volatile and uncertain world.

Sir, in this context and with your consent, I would like to propose amendments to the Motion.

Mr Speaker, electricity is a basic necessity of modern living. However, as a small nation with few natural resources, we are forced to rely on others for our energy needs.

According to the Energy Market Authority (EMA), 95% of our electricity is generated using imported natural gas. This leaves us vulnerable to global events, including rising gas prices, tensions in the Middle East and supply disruptions, which all may cause energy prices to spike unexpectedly. It is therefore in our national interest to conserve energy and diversify our energy sources.

While the electricity tariff has experienced some ups and downs in recent quarters, the SP Group recently announced that electricity tariffs for the fourth quarter of this year would go up by 3.7% per kilowatt-hour (kWh), due to higher fuel costs. This, in turn, will result in higher electricity bills for households and small businesses, adding to the high costs of living that Singaporeans are struggling to grapple with.

As far as electricity usage is concerned, our priorities should be encouraging energy conservation and managing costs for consumers.

To this end, I have noted recent Government announcements, such as the setting up of Gasco to centralise gas procurement by next year, which has the potential to bring down the cost of gas for power generation. There is also a pilot initiative next year to offer rebates to consumers who reduce usage during peak hours.

However, in my opinion, more can be done to one, encourage conservation of electricity; and two, lower costs for consumers.

First, on the pricing of household electricity. About 15 years ago, in 2008, this House debated public concerns about high electricity prices. At that time, I raised the possibility of adopting a tiered pricing model, which would enable households who consumed moderate amounts of electricity to pay for usage at a lower rate, if their consumption did not exceed a certain threshold. Households who consumed electricity in excess of the threshold would pay for the excess at a higher rate.

In rejecting my suggestion in 2008 and again in 2010, then Ministry of Trade and Industry (MTI) Senior Minister of State S Iswaran, argued that the Government intended to facilitate competition in household electricity pricing through opening the retail electricity market.

The Government touted more flexible choices and "competitive pricing" with the new open electricity market for consumers. Please allow me to quote what then Senior Minister of State Iswaran said: "…in the long term, EMA is working towards opening up the household electricity market for competition so that consumers will be able to purchase electricity direct from different suppliers through a range of retail packages that they offer. Ms Lim asked whether the Government will allow such retail electricity sellers to use a tiered system. Once such a market is established, then we should leave it to the market to work out what are the different ways they can meet customer needs... If we were to introduce a tiered system today, it means Government is deciding what is an acceptable level of electricity consumption and establish that as the threshold... This is quite a problematic process in terms of determining the key levels of thresholds. So, it would be far superior to allow the market to work, for us to give targeted subsidies to those who need it and when the market is fully liberalised, the players can then work out the schemes as we see in other sectors like telecoms."

Sir, it was thus a key plank of the Government's strategy to bank on the open electricity market to manage electricity prices for consumers.

Accordingly, the open electricity market for households was rolled out in 2018, to great fanfare. This did not last. As we are all acutely aware, six retailers have since exited the market. Many were under-hedged and were stuck with lower-priced fixed rate electricity contracts while energy prices rose unexpectedly. This drove them to a loss-making proposition, leaving them no choice but to exit the market.

Today, most of the remaining retailers are backed by power generation companies while two others offer plans with only "marginal price differences from the regulated tariff".

Sir, in the wake of the problems with the open electricity market, the EMA tightened its requirements for open electricity market retailers in July 2023. These tighter requirements include requiring a licensee to hedge at least 80% of their contracted retail demand, set up funds to pay for premature termination of contracts and so on. A CNA report from August this year observed that these additional requirements could result in higher prices for consumers.

The uptake of price plans from retailers has also been slow. As of 1 March 2023, only 40.6% of residential units have adopted the retail price plan.

According to a report by the Oxford Institute of Energy Studies, barriers to switching in the retail electricity market include complexity of the retail market and electricity tariffs, transaction costs, uncertainty of service quality and behavioural biases, among others. There is also the question of how viable it is to have many retailers competing for the relatively small domestic market in Singapore.

As matters stand now, much uncertainty remains over the revamped open electricity market model. It is unclear whether consumers will benefit from the liberalisation of the electricity market and if so, to what extent.

What, then, are the other options for managing household electricity bills? So far, a large part of the Government's answer has been to distribute U-Save vouchers, mainly to HDB households.

While U-Save vouchers are useful, they are effectively taxpayer subsidies for certain types of households. As a complement to these measures, the Government could review its electricity tariff structures. In particular, I would ask the Government again to consider implementing a tiered pricing structure for household consumers. Further or alternatively, the Government should consider a pricing structure that is based on time of use that discourages electricity consumption at peak hours. Both of these have the potential to lower electricity costs for consumers.

First, tiered pricing. Tiered pricing is known in some countries as increasing block tariffs (IBTs). Under such a system, households that consume electricity below a certain threshold would be charged at a lower rate, while those consuming higher amounts would pay higher rates for the excess consumption.

In Singapore's context, one could set the threshold amounts, looking at the consumption patterns tracked by the EMA. Thus, for example, in deciding where to set the threshold amounts, one could take reference from the average consumption per month for 3-room HDB households, which is around 22 kWh.

In 2010, then Senior Minister of State Iswaran responded that tiered pricing would amount to the Government essentially deciding what an "acceptable" level of electricity consumption is. I do not agree with this characterisation.

What we would be doing is to encourage energy conservation by charging a lower rate for what is deemed a basic necessity.

Tiered pricing of household electricity is used in many countries. To understand more about it, we could look to the benefits in several other countries where it has been implemented.

One such example is China. In 2012, China rolled out a tiered electricity pricing system across 29 provinces, with three tiers. The specific levels differed, depending on the province, but generally, the lowest pricing tier aimed to capture about 80% of residential households. The second tier had 15% of households while the third highest tier covered the remaining 5%.

A report by the China Economic Quarterly International showed that in the years following the implementation of tiered pricing, there was a 6.1% reduction in electricity consumption.

Sir, while each jurisdiction will decide how to set their tiers, this example shows that tiered pricing can have a positive effect in reducing overall consumption.

Another example is Hong Kong. Hong Kong has two major suppliers of household electricity, namely HK Electric and China Light and Power. Both of them offer tiered pricing, with as many as seven tiers. Small users pay preferential rates. According to the Hong Kong Environment and Ecology Bureau, tiered pricing is deployed for residential consumers to "promote energy efficiency and conservation".

Tiered tariffs can also be found in a host of other jurisdictions, including the United States (US), the United Kingdom (UK) and South Africa.

In fact, a World Bank study of 60 developed and developing countries showed that 60% of countries surveyed made use of tiered pricing or volumetric IBTs. The study noted that the rationale for a tiered pricing structure was to provide a "social safety net" whereby all consumers could assess a basic subsistence volume of consumption at a very affordable tariff, while ensuring that the revenue shortfall was covered by surcharges on the largest consumers. The study found that volumetric IBTs had "a material effect on affordability".

Mr Speaker, I note that in a more recent Parliamentary answer to a question raised by Mr Don Wee last year, the Minister for Trade and Industry again rejected a tiered pricing approach. MTI stated that electricity should be priced at its "full cost of production and delivery" and warned of "inadvertent implications". The Minister gave an example of a multi-generational household paying more if they lived in a single home, than in two smaller homes.

While this may be true, this phenomenon already exists in many Government policies. The larger, multi-generational household is already receiving less Service and Conservancy Charges (S&CC) and U-Save rebates, has less subsidies for long-term care, may be disqualified from the Silver Support Scheme and so on.

There is probably no policy with perfect outcomes. So, let us not let perfect be enemy of the good.

Sir, my second point is for the Government to look at helping households manage electricity consumption through discouraging use at peak hours. This could be done by charging lower rates at non-peak hours.

The EMA is already doing this for business consumers. Business consumers can make use of EMA's Demand Side Management (DSM) scheme to lower their electricity bills, by adjusting when and how much electricity they use. Businesses can participate in the Demand Response programme, where they can voluntarily reduce electricity usage when prices are high. Such behaviour also benefits the system, as it reduces the capacity required at peak periods.

It is well-known that a key driver of the costs of producing electricity is not the total load, but the peak hour load. Having a cheaper rate for off-peak consumption would benefit the system as a whole, as it will go towards ensuring that the peak demand can be more efficiently met by the existing transmission grid.

Can such differentiated peak and non-peak pricing be applied to households as well? Such time of use charging has been offered for decades around the world, in major cities including London, San Francisco and Sydney. What is its potential for Singapore households?

Just last month, the Government announced a pilot scheme called Residential Demand Response programme, to be launched by the second half of next year. Under this pilot programme, Singaporean households will be issued with smart meters and will receive alerts to actively reduce consumption during peak hours, in exchange for financial reward, such as rebates. This scheme is, in effect, a differential pricing scheme based on time of use.

The Government's planned financial incentives to reduce peak hour consumption could be further developed. We could work towards a system where the electricity tariff for off-peak consumption for households is lower than the tariff for peak hour consumption. This allows households to manage their electricity costs by adjusting their time of use.

Sir, in making these suggestions today, it is not my intention to over-simplify the issues associated with electricity pricing, which can be a rather technical matter. Nonetheless, with the concerns about global energy supply and costs looming in the horizon, this is an issue that deserves attention.

Sir, let me conclude. Recent global conflicts and tensions have made Singapore even more vulnerable to rises in the prices of oil and gas, on which we rely for our energy needs. With 95% of our electricity generated from natural gas, Singaporean households are at risk of higher electricity bills. At the same time, as the Government has recently highlighted, imported supply uncertainties make it imperative for Singaporeans to conserve electricity.

I believe household electricity costs can be managed through adjusting the electricity tariff structure, such as through tiered pricing and differential charging to encourage off-peak consumption. Such reforms would recognise that electricity is a basic good and yet, incentivise energy conservation.

Mr Speaker, Sir, the Progress Singapore Party (PSP) supports the Motion moved by the hon Leader of the Opposition and Member Louis Chua, which calls on the Government to review its policies so as the lower cost of living pressures on Singaporeans and their families.

It is especially apt to describe the ongoing inflationary pressures faced by Singaporeans as a crisis.

Since the COVID-19 pandemic, when many Singaporeans are still struggling financially, the cost of almost everything in Singapore has gone up.

In contrast, the Government does not seem to be too concerned about this crisis and continues to add oil to the fire. The GST hike confirmed in Budget 2022 was one of the factors that accelerated the pace of inflation as businesses took the opportunity to raise prices far more than the GST and other cost increases. Food prices have surged because NTUC FairPrice stood by instead of doing more.

I still remember, in the early 1970s, I used to queue up at a community centre with my mother to buy heavily-discounted basic foodstuff and necessities supplied by NTUC. Today, NTUC FairPrice's prices are not even the lowest in the market. It is commonly known that lower prices can be found at the Sheng Siong supermarket instead. It appears that the role of NTUC and, by implication, that of the Government, has changed drastically over the last few decades. NTUC FairPrice no longer serves as the anchor of price stability. The Government, instead of being the independent referee and price stabiliser in the economy, has become a profit-seeker in direct competition with the private sector.

In many sectors, the Government is the market maker and has influenced the price levels in those sectors, the most obvious and problematic one being the property market.

Hence, the current cost of living crisis faced by Singaporeans is not entirely due to the global supply chain disruption arising from the COVID-19 pandemic and the war in Ukraine. The COVID-19 pandemic has exposed the fact that Singaporeans have little savings to weather financial emergencies. The events after the pandemic have only exacerbated the situation that Singaporeans have been subject to by the Government over the recent decades.

Singaporeans have been worried about the cost of living for many years because they feel that their wages have not kept up with the cost of goods and services that they need to lead a meaningful life in Singapore.

CDC vouchers, GST vouchers, Service and Conservancy Charges (S&CC) rebates and so on can be very helpful for Singaporeans in the short term, but these handouts do not solve the fundamental structural issues that are at the heart of the rising cost of living in Singapore today.

To help Singaporeans get out of this cost of living crisis, the PSP believes that we will need to nudge the Government to change its two favourite financial management approaches, namely, the "pay and pay" and "the chicken wing for a whole chicken" approaches.

The Government's approaches may have served us well in the early days of nation-building when public finances were tight and wages rising fast. However, they may not be appropriate in today's context when wages are not rising as fast as the cost of living. It is especially worrying if more and more middle-class Singaporeans cannot keep up with the current standard of living.

First, let us talk about "pay and pay". Many Singaporeans often jokingly refer to the People's Action Party (PAP) as a "pay and pay" party because it seems to run Singapore like a company and operates like a profit-seeker.

PSP has spoken many times in this House that this Government has ample fiscal resources and, yet, it has always tried to justify increasing taxes and fees for public services whenever possible. PSP has objected many times to the increase in the GST from 7% to 9%. It is unnecessary, untimely and uncompassionate.

While the working class will get GST vouchers, the middle class will have to pay an additional $1.2 billion in GST per year after the 2% GST hike and may have to pay even more taxes because of the GST vouchers.

The increase in GST is unnecessary because our fiscal position is strong as there is room to use more of the Net Investment Returns Contribution (NIRC) for current spending, instead of tucking the bulk of it in the long-term endowment and trust funds.

While we agree that public services like electricity, water, public transport and so on should be operated efficiently, the ultimate objective should be to maximise long-term social benefits and not short-term profits.

When Singaporeans are faced with intense inflationary pressures at the moment, the Government could have delayed the fee increases in the public services for three to five years, for example. This is especially so when the Government is expected to reap billions of windfall revenues from inflation, Additional Buyer's Stamp Duty (ABSD) and COEs in fiscal year (FY) 2023, apart from the fiscal buffer we have from NIRC.

The Government should price public services based on long-term considerations to provide stability to Singaporeans' livelihoods, which will increase long-term social benefits.

Our fiscal resources have been hoarded away in the Reserves, supposedly for the sake of the future generation. But this is to the detriment of the present generation who are facing the heavy and unnecessary burden of higher taxation and rising cost of living.

We urgently need to review how our fiscal resources, including our Reserves, are being used before we contemplate raising taxes on the people. The Reserves and Budget should serve Singaporeans and not the other way around.

More discerning Singaporeans have pointed out long ago that the PAP Government likes to give Singaporeans a chicken wing and then take back a whole chicken. Essentially, what it means is that the Government is a shrewd financial manager who gives out occasional short-term handouts but commits Singaporeans to long-term payment schemes that require them to pay out consistently over the long term. The total long-term payouts will be much larger than the short-term handouts.

Take public housing as an example. For every Build-To-Order (BTO) flat sold, the buyer will have to pay hundreds of thousands for the land cost and have to take up a housing loan to service it. If that loan is serviced for 25 years, the buyer's CPF balance could be reduced by as much as half a million dollars. In exchange, the Government will sweeten the deal by giving out CPF Housing Grants of $30,000 to $60,000 through HDB.

It begs the question why can the Government not waive the land cost so that Singaporeans can keep the half a million dollars in their CPF account for retirement instead? This is exactly what the PSP has proposed in the affordable home scheme, which waives land cost for owner occupiers of HDB flats.

It is obvious that, in this way, Singaporeans' financial position will be significantly improved and that will yield a lot of social benefits.

For MediShield and CareShield, the Government has also been accumulating large surpluses ahead of actual expenditures. If premiums can be reduced, Singaporeans will have more balances in their MediSave Accounts to earn more interest while they are young. PSP has proposed for the Government to pay for the MediShield and CareShield premiums all together and establish a universal health scheme for Singaporeans.

It is not an overstatement to say that "a chicken wing for a whole chicken" approach is the main cause of social anxiety for Singaporeans.

Mr Speaker, at the launch of the Forward Singapore Festival, Deputy Prime Minister Lawrence Wong said that Singaporeans today no longer talk so much about the 5Cs. He said that Singaporeans still want a good material life, but the Singapore dream is also about finding fulfilment, meaning and purpose. PSP wholeheartedly agrees that there is more to life than material success and consumption. I have also spoken about self-fulfillment and ikigai, which is "purpose" in Japanese, in the public.

But we believe that Singaporeans are no longer talking so much about the 5Cs because the structural issues in our economy and the cost of living crisis have now made the 5Cs completely unattainable for many middle-class Singaporeans even if they are frugal and work hard. Today, condominiums and cars are unaffordable on a middle-class salary. Fewer and fewer households are owning cars. Yesterday, the Acting Minister for Transport confirmed that car ownership has dropped to 33% today from 40% in 2013. Even motorcycles feel out of reach for many Singaporeans.

It is well-known that country club membership fees have soared because of the influx of wealthy foreigners. Cash is tight because of inflationary pressures. Of the 5Cs, the credit card is the most attainable, but the credit card has fallen into a necessity to facilitate "buy now, pay later" when cash is tight.

Singaporeans are talking less about the 5Cs not because they do not want it anymore but because for many Singaporeans today, it really can only be a dream.

An urgent reset of our policies is needed to address the structural issues that our economy faces. Singaporeans must have more to look forward to than the rising cost of living. Economic growth must lead to rising real incomes and better lives for everyone and not just a select few.

We must help Singaporeans to improve their long-term financial well-being so that they will have the savings to withstand emergencies like the COVID-19 pandemic. The financial leeway will also allow Singaporeans to have the freedom to develop their potential, which will be beneficial to our economy in the long term.

Over the last three years, my primary focus in this House is to speak on policies to improve the financial well-being of Singaporeans. Today, I will put all these into an integrated cost of living relief package with the following five measures.

One, first and foremost, reduce GST to 7% to clearly demonstrate the Government's determination to dampen the inflationary psychology.

Two, increase the immediate relief package from the current $1.1 billion to $5 billion to include financial help for the middle class and small and medium enterprises (SMEs). This will also be a much-needed spending boost for the nascent post-COVID-19 recovery;

Three, introduce the affordable home scheme and Millennial Apartments scheme to make HDB flats more affordable, strengthen retirement adequacy and offer more choices to young Singaporeans.

Four, introduce a universal health scheme for Singaporeans, essentially based on the Government-paid MediShield and CareShield premiums for Singaporeans.

Fifth, introduce a minimum living wage to give Singaporean workers a minimum take-home pay of $1,800 per month.

Mr Speaker, the objective of the integrated cost of living relief package is to provide a robust and substantive response to relieve the financial stress of Singaporeans, both immediate and in the long term.

PSP has also estimated that it is manageable with the fiscal resources we have currently. We hope the Government will make improving the financial well-being of Singaporeans the cornerstone of our new social compact. For country. For People.

Mr Speaker, Sir, I would like to state at the onset that I recognise that there is a cost of living issue. I recognise that Singaporeans are going through this, but we have to recognise that this is a global phenomenon and we have to tackle this together.

But, Sir, I have been listening carefully and intently to the speeches made by the three Opposition Members of Parliament and my impression is that they are basically asking for an ultimate reduction in tariffs, some reduction in taxes, more top-ups, more handouts.

This is not the first time. It did not surprise me that Mr Leong Mun Wai, again, talked about the GST.

Honestly, Mr Speaker, Sir, I think the Opposition Members of Parliament have been milking the GST cow for a very long time and we have explained time and again over the last several years why the GST increase is necessary and why there are offset packages. So, maybe I just want to say if you really must milk something, go and milk another cow.

Mr Speaker, Sir, as a PAP backbencher, it is very clear in my mind that I am here to support the PAP Government's vision. I am not here to steer it. But at the back of my mind, I would like to ask the Opposition Members of Parliament if one day you are to steer this ship – I hope not, but we cannot rule it out completely – if you are to steer this ship, what is your overall underlying strategy? What is your philosophy?

Because, so far, what I have heard is that you are basically dissecting the problem and you are talking about water, electricity, GST, so on and so forth. But at the end of the day, we need to balance the Budget and we need to balance the Budget for all Singaporeans.

Sir, as I listened to the speeches of the Opposition Members of Parliament, I cannot help but feel a sense of gloom and I am reminded of a Chinese war movie that I watched some time ago – I remember this very clearly because it struck me – it was a commander telling the troops in Mandarin, "你知道有什么比悲哀更悲哀吗? 那就是已经绝望了, 已经没有机会了". Do you know what is more sorrowful than feeling sorrowful and despair? It is when it becomes hopeless; it is when we no longer have a chance.

But, clearly, this is not the situation we are in. So, I think it is important that all of us in this Chamber – PAP Members of Parliament, Opposition Members of Parliament, WP Members of Parliament, PSP Members of Parliament, Nominated Members of Parliament (NMPs) and Non-Constituency Members of Parliament (NCMPs) – come together and let us tackle this problem collectively. We have enough resources. We have overcome bigger problems.

I noticed that the WP's Motion used the word "crisis", cost of living 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. To me, this is a problem. It is a big problem. I would not classify it as a crisis.

So, my point is, 我们不悲哀, 我们没有绝望, 因为我们有的是非常多的机会. That is, we are not sorrowful. We have not lost hope because we have a lot of opportunities.

Discuss this issue of cost of living by asking three honest questions and, hopefully, by giving three honest answers also.

The first question: is there pain amongst Singaporeans due to the rising cost of living due to inflation? And the answer is yes, there is pain. We have to acknowledge it and we have to admit this is going to be a rough and bumpy ride for all of us. It feels like a never-ending uphill battle. But, sometimes, as we overcome difficulties, there are also learning points and I am completely certain in my mind that we will overcome this. The worst may not have come yet, the worst may well come later. But never mind, we recognise there is pain and we will get over this together.

Sir, the second question I will ask is: having recognised that there is pain, is there pain relief?

And the answer is, absolutely, and that is why the Government has rolled out so many packages: Cost of Living Package; Assurance Package; CDC Vouchers; U-Save rebates; Public Transport Vouchers and so on. We know them. The Government has done its best to cushion the rough and bumpy ride. But I think what we have done particularly well, maybe compared to some other countries, is that we are targeting assistance to those who need it more and I will urge the Government to continue doing that. Let us help those who need the most help and not only help them the most but maybe help them for the longest time possible. It is an unequal policy, but I think it is the right policy to adopt.

Sir, the next question I will ask, having acknowledged that there is pain, having said that there is pain relief, the last question I want to ask is: so, in the process, are any Singaporeans being left behind? Clearly, the answer is no.

As I have said, we will target assistance and help to those who need it more and hopefully for a longer period, and we will do the right thing. And doing the right thing is not about just policies or rules and regulations. We all know that doing the right thing is what is in your heart. And doing the right thing is – I hope the Opposition Members of Parliament will agree me – definitely not about straddling the middle ground to gain some votes. We will never do that and we do not want to start doing that.

So, I say, let us all behave like a herd. We are the Singapore Herd because, united we are strong and divided we become weak.

And, Sir, here I would like to admit and also acknowledge that most of us, it is human nature, we like consistency and continuity. Many of us do not like change, especially when change involves an increase in the cost of living, it involves inflation. But I think it is something we have to accept collectively. It is a global phenomenon and we will overcome this.

Sir, I would like to next move on to Mr Liang Eng Hwa's amendment because towards the last part, he mentioned "without undermining our fiscal sustainability and burdening future generations of Singaporeans." This is very important because every generation must solve its own problems. Every generation has to solve their own problems and down the road.

And just now, the hon Member Mr Leong Mun Wai talked about Reserves again. I just want to say this: actually, in reality, neither him nor me are qualified to talk about our Reserves. We are only the custodians, and you know what? The Reserves are not meant for you; and neither are they meant for me. They are meant for our children and our children's children and that is why it is so important that we safeguard them.

Like in COVID-19, if it was necessary to dip into our Reserves, we had. But I think if every time we come across a problem and a difficulty, we ask for the key to the safe and we start taking out, there is not going to be very much left in the safe, you know. I am always very marvelled by this mahjong table because on every mahjong table, there are four players and there is always a drawer there for each player. Every time I look at it – and some people put their chips on the table and some put theirs inside the drawer – my reading of it is that what is on the table are MAS and Temasek. What is in your drawer is GIC because I do not know how much you have inside the drawer.

And it is very important that we keep our Reserves as strong as possible and maybe as mysterious as possible because when people do not know how much you have, they hesitate to mess around with you.

My mind goes back to 1997 again. During the Asian Financial Crisis, we all know that the currencies around us were all hammered, beaten down. We got off relatively unscathed and do you really think that the hedge funds did not look at us? I am sure they did. But I think they probably say, "You know, this little island, I do not know how much is inside that drawer, I better not mess with them because it is like throwing a boomerang. You throw a boomerang, hoping to hit the other guy, it comes back and it slit your throat."

So, let us safeguard our Reserves and unless it is a real crisis like COVID-19, I think try not to touch it.

Mr Speaker, Sir, please allow me to quote a famous Cantonese saying. Mr Leong Mun Wai will understand this because he is Cantonese. It goes something like "牛不喝水，按不到牛头底 ". When the cow goes to the river and drinks, if it does not want to drink, you cannot press its head down.

Mr Speaker, do not worry, I am not going to talk about meat prices. I mentioned this in the context of our debate today because in a free-market economy, the price is set by willing-buyer willing-seller and it is set by basic demand and supply forces and, honestly, in Singapore, we import most of our products and we have little control. We are, basically, a price-taker although the hon Member Mr Leong Mun Wai just now said the Government is a price-setter. I intend to disagree. It is a price taker.

But, fortunately, for us, we have a strong Singapore dollar and the strong Singapore dollar makes it more economical for us to import our products.

So, Mr Speaker, Sir, my point is that as long as we stay united, cohesive, we will overcome this. We have enough experience and enough resources. There will be sunshine after the rain. We must have the guts, the gumption and the resolve to do this correctly. And rather than seek out the heat, we should look for the light and I am very confident that we will overcome this. My mind again goes back to a radio broadcast that Mr Lee Kuan Yew did, I think it was in 1961 and he said, "It is as inevitable as the rising and setting of the sun." So, it is as inevitable I think that we will overcome this if we stay cohesive, united and collected as a people.

Sir, I think the long-term solution to all these, after we have overcome this cost of living problem, is that we must keep growing our economy and not only keep it going but keep it growing. And we must also continuously bake a bigger a pie so that Singaporeans can all have a bigger slice. The more vulnerable, those who need help will get it more and get it longer.

Mr Speaker, Sir, in conclusion, as we commemorate the 100th Anniversary of Mr Lee Kuan Yew's birth, I like to quote him. And basically, this quote shows how important it is that we stay united as one people. And I quote Mr Lee Kuan Yew, "For the next thousand years, we will still be here, recognisable, identifiable." [Applause.]

Thank you, Speaker, I feel compelled to clarify what Member Sitoh Yih Pin has attributed to me and I will clarify my own.

My proposal actually for tiered electricity pricing is a revenue-neutral proposal. Most IBT systems are designed that way. So, it will be wrong of him to say that I am asking for more subsidies from the Government or raiding whatever fund to do that.

The second proposal which I suggested was about time of use pricing. And I also mentioned that MTI is already in the process of giving financial incentives to households who consume electricity at off-peak hours and they are also doing that with business consumers already. So, unless the Member is saying that conserving energy is not important for Singapore and MTI is wrong, then I think he better make himself clear.

Thank you for the clarification, Ms Sylvia Lim. The Member said something about tiered pricing. Yes, I heard her. But I think when the Government issues the U-Save rebates, they would have achieved the same objective.

As to the Member's second point about pricing relating to time of use, honestly, even though I did not say it just now, I think it is a good idea to consider.

Mr Speaker, as Members of Parliament, feedback from residents about rising costs of living is not uncommon. However, in the last half a year, the frequency of such feedback has really increased tremendously.

I receive such feedback not merely from residents who are in the lower-income brackets. I also receive feedback from across the different income tiers. Recently, I attended a feedback session with some condominium residents in Hougang and concerns arising on rising costs of living were raised by many with whom I spoke to.

Mr Speaker, I believe I am not alone in receiving such concerns and feedback in the House. I therefore support the WP's Motion today calling on the Government to review its policy with a view to lower cost of living pressures on Singaporeans and their families.

There are different issues of rising costs of living which affects Singaporeans. My colleagues in the WP will be focusing on different aspects on the rising cost pressures. I will be speaking on the need to relook some aspects of our means testing criteria in public healthcare and for more help for adults with special needs or disabilities and their caregiving families.

Mr Speaker, with a growing ageing population, healthcare costs are the main concerns of many, including especially many of our seniors and those with no income and yet facing health issues, and find themselves struggling to afford essential healthcare.

The current means testing method based on a per capita household income (PCHI) presents some challenges to certain Singaporeans. The current economic indicators applied to the healthcare means testing criteria may have their limitations. They look at household income broadly. It overlooks or deprioritises two important issues.

One, the formula looks at the rigid household incomes and does not look at deferring or specific needs of specific members of each household when evaluating help which should be given. While it is true that both the young, such as children and the elderly, may not have earning power or contribute directly to the PCHI, the elderly are more likely to require nursing care due to the onset of various chronic illnesses associated with ageing.

According to the National Population Health Survey conducted in 2020, over 20% are respondents, aged 60 to 74 years, had diabetes. Approximately 75% of those aged 70 to 74 years had hypertension and 60% in the same age group had high cholesterol. These chronic illnesses often result in increased healthcare spending, including expenses related to complications. For example, diabetes and high cholesterol are commonly associated with cardiovascular diseases, like coronary heart diseases. In fact, in 2019, approximately 75% of heart attack patients were aged 60 and above.

Furthermore, most corporate medical insurance plans typically allow employees to include two family dependents, usually a spouse and offspring but do not permit the inclusion of elderly dependents. This exclusion is often reflected in corporate insurance plans, such as those by Raffles Medical Group, a major corporate insurance provider in Singapore. These plans specify that eligible dependents must be either a spouse or unmarried or unemployed children.

As a result, some households with elderly dependents may experience higher out-of-pocket medical expenses compared to households with children, even when their PCHI is the same. It is crucial that we consider such disparities in means testing.

One may argue that the seniors in Singapore already have access to a wide range of subsidy schemes aimed at addressing their needs, such as the Merdeka Generation Package (MGP) and the Pioneer Generation Package (PGP).

However, a closer examination of these subsidies offered by these packages reveals room for improvement. For instance, the subsidies entitlement for MG and PG cardholders cover chronic conditions and dental services, but not as extensive in coverage when compared with the coverage of critical illnesses in commonly available medical insurance policies and subsidies for chronic conditions are kept annually.

Two, it does not look at whether a family member actually do receive help from family members for their medical fees and expenses of a family member. The choice of residence for retired elderly individuals, whether they decide to stay with their working adult children or live independently, has little impact on the family's financial dynamics. Financial support from working adult children is a personal decision arrived independently of the elderly person's choice of living arrangement. As a result, a retired elderly may appear to have a high PCHI on paper, but they may not receive financial assistance from their children or adequate financial assistance from their children.

While the Government expects family members to pay for the living and medical expenses of family members, in reality, this may be easier said than done.

Many residents have told me that they do not wish to impose on their children and they try to make do with what they have. Many have tried unsuccessfully to get public financial assistance when they do not receive sufficient money from their children, as their children have told them they do not have enough to contribute to their parents, including those who live with their children in the same households. How can such people receive further subsidy or assistance if help is not forthcoming from family members, without having to request from family members?

I see the same problem with some of my residents seeking financial assistance but were not eligible because of a household income. An elderly male resident saw me a few times, crying with frustration, due to the lack of financial support as he is not eligible for more support, due to his son's and daughter-in-law's incomes and his son said that he is unable to provide more support.

Furthermore, for healthcare means testing, beyond cases of elderly parents living with working children, there may also be other categories of core occupiers in the same household who may not be currently sharing or co-funding medical expenses of other occupiers of the property.

By way of an example, Mr A is in his early 60s and working part-time due to his health condition. He lives with two other higher-earning siblings. They share common household expenses, but not individual medical expenses. The household income will be a key consideration for the amount of subsidy he is entitled under the current PCHI formula. In a case like this, does the Government expect Mr A to reach out to his siblings to ask them to share his medical expenses? Will Mr A get help, maybe applies to the authorities for further subsidy?

Mr Speaker, currently, when the per capita household income of a particular household's PCHI is zero, the Government will look at the annual value (AV) of the property that the household is living in. In July this year, the hon Member for Aljunied GRC Mr Gerald Giam, urged MOH to consider removing the AV component for household so with no income.

Senior Parliamentary Secretary Ms Rahayu Mahzam said in response and I quote, "On the Member's point of considering to remove this, this is a broader point we are looking at." I hope the Government will consider removing this.

Mr Speaker, households with zero PCHI but higher AVs often comprised of retirees who are in their twilight years and may have a family member who is seriously unwell and seeking medical treatment. The Minister for Health himself has acknowledged in a written answer to a PQ in February this year that AV is an imperfect proxy for determining financial need, especially for those who are asset-rich but cash-poor.

There may be a variety of reasons why such individual owners are unable to monetise their property. As we age, we may grow more attached to our homes, the neighbourhoods we are familiar with and the communities we have built over the years and that this may not even be the reasons for some, amongst us, for not being able to move out to a lower priced property. For whatever reasons, monetising, right-sizing or downsizing may not always be feasible or desirable. In addition, we have been encouraged to age-in-place.

But owners living in their own properties are not the only people who are affected by the AV issue. There are also family members who are caught by the rule. Besides non-owner spouses, there are siblings, children, aunts, uncles and cousins who may be living in the same property who may be caught by this rule. Such family members may not be able to get their relatives in the same household to pay for their medical expenses. They may not be able to afford a place of their own just to qualify or more state subsidies.

There are also cases of family members being co-owners of a family property or co-inheriting such property after a parent has passed on. I know a few of such cases where residents inherited a family property together with fellow family members. They continue to live in their own property. Family properties is kept for use by other family members and this could be a residential or even commercial property. And there is no near-term prospect of the property being sold and proceeds to be distributed. These non-occupier owners are caught by the AV issue when it comes to medical subsidies and also for other packages and schemes from other Ministries.

Such people have to appeal every time against their non-access for subsidies or benefits and an outcome may not always be consistent.

Before I leave this point, I would also say that whether a person is an owner or non-owner, it would not be right to expect a person living in a property with higher AV battling a serious disease to have to make arrangements to move out of his or her home or to sell his or her home to raise funds for the very medical treatment he or she needs.

Next, Mr Speaker, I would like to discuss the needs of families who have family members with special needs or with mental health issues and requiring care for family members. The burden placed upon these families is immense and I hope that the state can extend more help.

While the numbers of such families may not be large, their plight is significant and warrants our attention. According to SG Enable, 3.5% of people aged between 18 and 49 in our country are disabled. These numbers are not negligible and we must recognise the challenges faced by these families.

Moreover, data from the Ministry of Social and Family Development (MSF) estimated that in 2022, there were approximately 32,000 persons with disabilities aged between 15 and 64, with about 1,000 of them unemployed and 22,000 outside the labour force. These figures underscore the urgency of addressing their needs.

Moreover, for families where such adults with special needs or mental issues require their ageing parents to continue to care for them, the burden of caregiving, both physically and financially, can be tremendous.

I have some suggestions to provide for better assistance to these families.

One, we should create a list of non-critical illnesses that necessitate long-term care and force individuals out of employment. This list would include conditions, such as early onset dementia, severe autism, Down Syndrome, schizophrenia and Parkinson's disease.

Such conditions can be financially burdensome for families and access to social support for these individuals and their families is currently limited. For example, eligibility for claims on the CareShield Life remains limited to individuals who are unable to perform at least three activities of daily living (ADLs).

However, the abovementioned ailments, while detrimental enough to put one out of employment, do not always impact one's ability to perform the ADLs. Many insurance plans cover critical illnesses and the insurance products available on the market that cover non-critical illnesses remain limited. Besides, some of these non-critical illnesses are congenital, making afflicted individuals excluded from medical insurance scheme, which require that one must be free of pre-existing medical conditions before they are onboarded.

The eligibility criteria of CareShield Life can be expanded to include consideration of those who can still perform ADLs but are unable to earn a stable income due to non-critical illnesses. This aligns with the original intentions of CareShield Life, which is targeted at individuals with long-term care needs.

Two, for such individuals with non-critical illnesses, we should offer more subsidies with medical supplies, consultations, treatment, rehabilitation and daycare services. Medical expenses of such injuries are not limited to specialist outpatient care or inpatient care, but also included other essential areas like medical supplies and rehabilitation.

Three, increase subsidies for inpatient and outpatient specialist treatment for both individuals with non-critical illnesses and their caregivers should be made available. While there are existing subsidies for long-term residential care, daycare and rehabilitation, many families do not meet the eligibility criteria due to the ceiling limit set by the PCHI or even the annual value of their property. For example, the PCHI upper limit to qualify for daycare subsidies set at $2,800. This can make it challenging for working adults taking care of their disabled children as their income may exceed this limit.

Should a working adult take care of his or her disabled child because the child is not capable of independent living and let us say he or she earns about $7,000 per month, taking the median salary of someone in the 40 to 44 years old age group, and the spouse is a full-time caregiver without any income, this works out to a PCHI of about $2,333 per month. The family only marginally qualifies for 30% subsidies and entitlement for daycare services.

Furthermore, the Senior Mobility Fund is targeted as seniors aged 60 and above, leaving out younger persons with disabilities (PwDs) who also require nursing and rehabilitation support. The younger PwDs in spite of their nursing and rehabilitation needs will not be able to access the fund. And even if the age criteria is extended to include younger PwDs, they do not qualify if the PCHI is more than $2,000 and the annual value of their property is more than $13,000.

In short, I am concerned that those affected are not getting enough support. There are PwDs in the working age group with rehabilitation needs and I hope the Senior Mobility Fund is extended to include these. I also hope that PwDs in the working adult age groups qualify for subtleties in daycare and residential care. Beside the opportunity cost of loss income, they should not be penalised just because they live with a working family member out of necessity.

Four, more support should be given to caregivers of adults with special needs or disabilities. While we do have existing grants and concessions, such as the Caregivers Training Grant, Home Caregiving Grant and Migrant Domestic Levy Concession, some of these are limited to households where the care recipient is elderly and exclude families where elderly parents are caregivers to disabled children. This disparity can be addressed.

Can caregiving grants such as the Home Caregiving Grant and the Migrant Domestic Levy Concession for aged persons with disabilities be extended the household where the care recipients are not seniors and may have no ADL issues but are involuntarily unemployed because of their medical condition. After all, the conditions that threaten employment, for example, early onset dementia, severe autism, Down Syndrome, schizophrenia and so on, are neurological or psychiatric conditions that affect soft skills, like cognitive and communication skills, and may not always affect one's ability to perform ADLs. And so, to use ADLs as an indicator and an eligibility determination for the grant is not comprehensive.

Mr Speaker, more help can be given to support caregivers, especially caregivers where to give up their full-time jobs to care for their family members and do not have an income or may need more financial support. For a start, I hope the Home Caregiving Grant can be increased beyond the current $400 for deserving cases.

In closing, Mr Speaker, I hope the current means testing formula can be further improved upon to take into account the specifics of an individual's financial situation, particularly his or her cash flow and health condition, and make healthcare more affordable and accessible for all. More help should be extended to adults with special needs or other forms of disabilities who are in the working adult age group but are unable to work and requires part or full-time care from family members, especially families where the parents are getting on in age. Mr Speaker, I support the original Motion.

Mdm Deputy Speaker, post-pandemic inflation in Singapore has been much higher than it used to be. Announcements of price increases in transport fares, water and utilities came one after another. COE prices rose to record highs and GST is going to be increased by another 1% next year. Property prices and rental continued climbing. All these are adding on to the anxieties of Singaporeans over the ever-rising cost of living that seems endless.

These anxieties cannot be alleviated by the various aid packages that the Government has rolled out, because while the packages are for a limited time, the cost increases are here to stay. The growing sense of insecurity, or even depression for some, over their declining ability to meet expenses or maintain previous lifestyles on their own income, can never be addressed with Government handouts.

The rising cost in Singapore is not only affecting the people, but businesses too. Whilst our low corporate tax was able to compensate for our high-cost space and attracting foreign investments, this tool would no longer be available with the implementation of Base Erosion and Profit Shifting (BEPS) 2.0, which sets a minimum corporate tax rate. This adds on to the urgency to find ways of containing costs in Singapore.

One of our major cost component is cost of property. For most of us, buying a home is the single largest expenditure of our lifetime. Hence, high residential property price has a huge impact on our cost of living. Yet, this cost is not captured in the Consumer Price Index, or CPI, because the CPI does not cover property purchases.

This is why the PSP has proposed a scheme to exclude land cost from the price of HDB flats to make them more affordable. In the retail sector, rental accounts for about 30% of the business cost. So, for each item that we buy from a shop, about 30% of their costs goes towards paying for the rental of the shop.

Prices has been rising in food outlets, like coffee shops and food courts. Hawkers spoke of alarming increases in rents imposed by the landlords. Record prices in the transaction of such properties are caused for concern. In 2022, following the announcement of the GST hike, the Committee Against Profiteering (CAP) was reconvened to investigate feedback on unjustified price increases of products and services.

I was invited by the Leader of the Opposition to be the representative of the Opposition on the Committee and having attended two meetings, I have learnt how limited the scope is for this Committee to act against profiteering.

The Committee acts on complaints received from members of the public. Such complaints are mostly against retailers, especially hawkers. At the retail level, there is much competition. So, I am not surprised that investigation usually reviewed that there are other reasons for the price increase.

For example, the increase in price might be due to higher rents. So, the hawker is not profiteering. But is the landlord profiteering? I raise this point at our last meeting and suggested the secretariat look further up the supply chain. I look forward to hearing from MTI on the progress at our next meeting.

Price Kaki, an app that compares retail prices from different sellers and seeks to prevent profiteering is also only able to check on vendors at the retail level. Places like Ireland, California, Canada, Scotland, Spain and China impose a cap on the rent increase each year. Austria and Germany are planning to do so as well.

Can I suggest the Fair Tenancy Industry Committee issue guidelines on the annual rent increase, similar to the way the National Wage Council issues guidelines on wage increase? The intention is not to depress prices to low levels, but to curb excesses. This can serve to stabilise the property market and pre-empt excessive rent increase.

In addition, real estate agents are commonly paid a commission based on the rent and, hence, higher rents work to their benefit. It would, therefore, benefit tenants to have an alternative source of information on what constitutes a reasonable rent increase.

Another important cost component is transport cost. Record COE prices for private and commercial vehicles, and even motorcycles, are causing pain for both families and businesses.

We understand the need to control the vehicle population in Singapore, because we are a small nation and road space is limited, but we must also recognise that mobility and the benefits that it provides are essential for all and should not be the sole province of the rich.

Skyrocketing COE prices contribute to the cost of living crisis in many ways. If the cost of a motorcycle doubles because the price of the COE has tripled, the Grab delivery rider is going to have to be paid more for his work. The cost of shipping and delivering goods, or a ride in a private-hire vehicle, will naturally also increase.

We urge the Government to consider the following suggestions: one, currently, passenger car and motorcycle COEs are under the zero growth policy, while COEs for commercial vehicles are allowed to grow at a rate of 0.25%. As motorcycles are increasingly used for delivery, we suggest that motorcycle COEs are also be allowed to grow at a rate of 0.25%, similar to commercial vehicles; two, adopt a points-based system, where apart from the bidding price, we also consider other factors, like nationality, and needs-based factors, like families with young children or persons with disability (PwDs); three, impose additional levies on multiple vehicle purchases, similar to the implementation of additional buyer stamp duties (ABSD) on those who buy multiple residential properties.

The Senior Minister of State for Transport said yesterday that this would not change things much as there are not many households with multiple cars. Can the Senior Minister of State show us the comparison of the number of households with multiple cars versus those with multiple properties, to explain the difference in approach?

In any case, imposing levies on second and subsequent cars would either dampen demand for multiple cars and tilt the balance in favour of those buying their first cars, or else raise additional revenue for Government. The most likely outcome is a combination of both. As both outcomes are desirable, I see no reason to reject this suggestion.

Another way to cope with rising cost of living is to have higher wages. Today, I will focus on the training and education for higher-paying jobs. The wage gap between graduates and non-graduates has been widening significantly, suggesting that there is demand for more graduates and we should provide more university places for our students.

Take the Medical Faculty, for example. The annual intake of the local medical schools is about 500. However, every year, on average, about 800 Singaporean applicants were rejected by the medical schools at the National University of Singapore and Nanyang Technological University, even though they meet the admissions criteria. Why do we not increase medical intake more aggressively? Instead, our students end up going to overseas medical schools, incurring huge expenses and we risk unnecessary brain drain when they do not return.

The traditional argument about ensuring fair share of talents in various sectors is outdated when we import foreign talents so readily. The same applies to other faculties as well, where Singaporean students are keen to study and that would lead to good paying jobs.

Mdm Deputy Speaker, the issue of cost of living is a complex one but one of great importance to many Singaporeans. Many suggestions have been, and will be, made today to address this pressing issue and improve the lives of Singaporeans. I hope the Government can keep an open mind to all suggestions and consider them seriously.

Earlier, the hon Member Mr Sitoh Yih Pin commented that the Reserves is for our children and our children's children. I think that it is important for us now to recall that our total fertility rate (TFR) has fallen to 1.05, which is half the replacement rate of 2.1. The number of our children and our children's children is halving with every generation. I think this offers a good reason to review our approach towards our Reserves and how much more do we need to accumulate. If our TFR falls further from cost pressures, who are we accumulating the Reserves for?

Mdm Deputy Speaker, over the last few years, one can barely open the headlines without catching a glimpse about various crises facing our planet, ranging from the cost of living crisis that is the subject of this motion and also the climate crisis, mental health crisis and crises relating to war and conflict.

But even when we may be faced with "crisis fatigue", what affects us viscerally is the surging prices of things that we need on a daily basis. Madam, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] In recent years, many things have troubled Singaporeans, especially the pressure of rising living costs. This also includes rising medical and nursing costs. Among these, mental health is also an aspect that may be easy to neglect in Singapore's medical and insurance systems as it is less visible. However, mental health can have a very direct impact on the lives of individuals and their families. We must remember that if we neglect our physical and mental health for a while, we may need more complex or even expensive treatment later on and the stress we need to endure in life will also increase.

For this reason, the Workers' Party calls for the relaxing of restrictions on using CPF savings and also to increase state subsidies for medium- and long-term care and also mental care. Some may point out that this is a waste of resources, that it will reduce personal savings that can be used for medical care in the future, and also creates dependence on the country and weakens the country's financial resources in the long run. The Workers' Party believes health cannot be understood through a cost lens alone. Health is a long-term investment in our people and the country. Preventive care or regular care today can effectively avoid future health and financial burdens. I will use my speech on the motion today to explore these issues in more depth, with the hope of improving medical services and reducing the challenges faced by Singaporeans.

(In English): The adverse impact of the cost of living crisis is seen on both mental and physical health. While humans have an immense capacity for resilience to get through difficult times, there are measurable, long-term effects on health and overall wellbeing that result from long-term stress. The imbalance in the body's physiology due to long-term stress, such as the constant worries associated with increasing costs, can lead to increased rates of chronic illnesses such as cardiovascular disease, lowered immunity, leading to greater susceptibility to infectious diseases, and also has an adverse impact on mental health.

I would therefore like to focus on the health and care related elements of the cost of living crisis facing us.

There is attention given to the direct link between worries over costs and the impact that it is having our ability to stay healthy and to be able to afford care, be it physical or mental health, long-term intermediate care or even preventive care.

A report released by Cigna in January 2023 about a global survey of 9,000 respondents also warned that cost of living pressures could trigger a global health crisis. The survey found that rising costs of living are top of mind for most people around the globe, with nearly half of respondents in Singapore saying that it was their biggest worry. Almost two thirds of the 1,100 respondents in Singapore also agreed that inflation is making it too expensive to stay healthy, whether it is through paying for care or taking measures to stay healthy.

A study at King's College London's Centre for Society and Mental Health also found that worries about increasing costs pose a major risk to mental health and those with pre-existing mental health issues are more at risk. The study also found that those who are using savings to meet everyday costs and borrowing money to cope were correlated to psychological distress.

In view of this, I believe the cost of health and other forms of care is one of the areas that warrants closer attention as we tackle the broader cost of living issues.

While Singapore, as a nation, has increased healthcare spending as a proportion of GDP in recent years, our current spending at 4% of GDP is still less than half of the OECD average. The health outcomes we have achieved at this cost are rightly a point of pride for policy-makers. However, our country is a densely populated urban city where the cost of healthcare delivery is more easily managed compared with countries with larger and sparser geographies. Singapore's health system also benefits from a generally lower crime and drug abuse rate and road traffic fatality rate than other countries – achievements that are not to be diminished and these should definitely be maintained.

But I believe that our health outcomes could be improved, with Singaporeans living healthier, longer and safer lives.

As an example, my WP colleagues have pointed out that for many years now, even before and without COVID-19, our approach to hospital bed occupancy rates are a cause for concern, with Ng Teng Fong, Khoo Teck Puat and Tan Tock Seng Hospitals operating at near 100% occupancy just in the last week of October 2023, even though the Government has acknowledged that 85% is the academic consensus safe operating rate.

In terms of waiting times, medical manpower per capita, intensive care unit (ICU) bed capacity in the public health system, there remains concerns about what the tensions in these areas mean for our health outcomes.

These areas should bear continuous scrutiny to maintain confidence in our public healthcare system.

Out of pocket costs and waiting times are the most direct interaction that most of us would have with the healthcare system. Around 70% of Singaporeans and PRs have Integrated Shield Plans (IPs) that cover private medical care and two in three have riders to pay at least a proportion of medical bills. This is indicative of residents being extremely cognisant about the potential costs associated with ill health and wanting to take action to guard against these costs.

A Straits Times article published in April 2022 titled "Having an Integrated Shield Plan and rider may not always guarantee peace of mind" warned that even buying IPs and riders may not always guarantee peace of mind and that residents might still face substantial bills should they require expensive treatment for preexisting conditions.

Recent commentary has also focused on private insurance coverage for those with mental health conditions and there is acknowledgement that current coverage is inadequate.

In a reply to a question that I filed in September this year, MOH also stated that insurers cannot indiscriminately reject an application solely on, amongst others, the basis of medical conditions, including mental health conditions. I was also happy to see an article in end October 2023 where private insurers stated that they are looking to include better coverage for those with mental healthcare and treatment needs.

However, the Government should ensure that this does not cause a surge in private sector insurance bills and regulators have to be ready to step in should private insurance discriminate on various medical grounds. This is especially as inflation in medical benefits is already expected to exceed inflation in healthcare post-subsidies.

Insurance broker, WTW, currently projects medical benefits inflation to be 9.8% this year, outpacing the broader inflation after subsidies in healthcare, which has generally risen in line with broader inflation over the last one-and-a-half decades.

Next, healthcare schemes and financing are currently extremely complex and are challenging for the person in the street to negotiate. This complexity imposes a bandwidth tax. For example, an individual in the sandwiched generation will have to understand the differences in schemes for both older and younger dependents. And if they buy IP riders, they will also need to understand the interaction between public and private healthcare for each dependent. In such situations, I hope that we can try and avoid situations where one ends up over-insuring their family in order to avoid the stress of being caught out unawares.

Apart from continuing to work on ensuring individuals feel secure about their ability to cope with the financial aspects associated with future healthcare costs, existing financial education efforts should target this specific point and address what families can do to avoid over-insuring, including demystifying complex insurance schemes which inevitably change from time to time due to developments in the macro environment.

I now turn to MediSave. For those with low MediSave balances, the Government should offer more MediSave top-ups to address healthcare inflation while continuing to leverage its design which reduces wastage while cutting out-of-pocket costs for consumers.

In this vein, we have to ensure that yearly MediSave withdrawal limits are updated yearly to reflect inflation, as medical costs can surge rapidly in a short period of time. The headline limit was increased to $500 from $400 in 2018 and was updated in 2020 to allow patients with specified complex chronic conditions to withdraw up to $700 yearly.

At the time of the 2018 update, the $500 limit was enough to cover the average annual bill of a patient with three or more chronic conditions. However, we have to look to increase withdrawal limits to match healthcare inflation rates and consider allowing greater flexibility to use our MediSave savings.

One way to do this would be to repeat the WP’s proposal to remove the MediSave withdrawal limit for chronic disease management for those over 60, which is contained in our 2020 manifesto. And this was also raised by Aljunied MP Gerald Giam in October last year.

A third MediSave-related point is that our savings earmarked for healthcare expenditure could be used to better support mental health treatment.

Anecdotally, it appears that the wait times for access to counselling, therapy and other mental health care have driven some recipients to private services. Alongside ongoing moves to grow public mental health services, can the Government consider allowing users to tap their own MediSave account for a range of private mental health treatments which would include psychotherapy, counselling and other forms of therapy like speech and occupational therapy? This would mean bringing in practices run by therapists and other professionals to allow their treatment costs to also be covered by MediSave.

Mental health is no less important than physical health and poor mental health can lead to issues with physical health as well.

Since MediSave is already being approved for use for mental health services at places like Institute of Mental Health and polyclinics, I hope that we can consider expanding this to include the use of MediSave to access mental health services in other practice settings aside from purely psychiatric settings. This would be important to assist families from across the board, some of whom need to put in place early intervention strategies for their children's developmental issues, to support a multi-modal approach beyond psychiatric treatment to address neurodevelopmental, mental health conditions and symptoms.

Moving to intermediate and long-term care (ILTC) costs, while the issue deserves a longer intervention on its own, the move earlier this year to provide subsidies of at least 50% to all Singaporeans for palliative care earlier this year is welcome. Likewise, positive are plans to extend drug and vaccine subsidies of at least 50% to all patients of MOH-funded providers of long-term care services.

However, I note that nursing home care costs remain a significant area of concern, with those with per capita household income of over $2,800 a month not being able to get subsidies for nursing home care. These families would instead have to turn to private nursing homes, which can cost $5,000 or more a month.

The WP, in our 2020 manifesto, called for there to be more subsidies for ILTC costs to relieve the out-of-pocket financial burden of social care for families who need it.

With immediate cost of living pressures upon us, can the Ministry share details about the quantitative and qualitative impact the current cost of living crisis has had on the ability of households to pay for ILTC needs and what are the plans to ensure that they do not fall through the cracks and have to dial down on ILTC arrangements?

A next step in this revamp for subsidies would be to look again at related subsidies, for example, the Home Caregiving Grant that was brought up by Member for Hougang SMC Dennis Tan. While the grant was increased recently to now pay between $250 to $400 a month for those who satisfy the means testing criteria, the amount is hardly enough to cover care-related needs.

Mr Speaker, Singapore faces an undeniable upward trend in cost of living, driven by factors such as global inflation, supply chain disruptions, escalating energy prices and labour shortages.

However, contrary to what the Member for Bukit Panjang seems to imply in his amendments to the Motion, domestic policy decisions like the hike in the GST, increases in water and electricity tariffs and rises in public transport fares, coupled with the skyrocketing cost of COEs, also contribute to the increase in the cost of living that Singaporeans are experiencing.

Blackbox Research's recent SensingSG survey found that 59% of Singapore residents highlighted cost of living among the two most important national and community issues.

Public transport costs are also a contributor to the cost of living in Singapore, making up 2.5% of MAS' core inflation basket. Over the last 10 years, the rate of increase in bus and train fares has been faster than that of core inflation. In the 2023 Fare Review Exercise, the Public Transport Council (PTC)'s fare adjustment formula produced a whopping 22.6% fare increase, although the PTC chose to cap it at 7%.

This decision, though, led to the Government providing an additional subsidy to public transport operators, to the tune of about $300 million in 2023 – up from $200 million a year before. This subsidy still does not eliminate the remaining 15.6% of fare increase, which the PTC has deferred to future reviews.

In the meantime, public transport operators (PTOs) have continued to post eye watering profits. Between 2011 and 2022, SMRT and SBS Transit have together posted profits averaging $55 million a year, reaching $110 million in the last financial year. This is particularly jarring against the backdrop of increasing fares and Government subsidies.

The PTOs and our current public transport model face little competition with each other because they operate different transport routes across the island. Even duplications of the same routes for different transport modes are slowly being eliminated as bus services running parallel to new MRT lines are removed.

These prompt questions about the efficacy of the current fare adjustment formula and a broader discussion around the sustainability of Singapore's public transport model.

The current model consists of a mix of Government ownership of transport assets and operating contracts carved out among multiple profit-oriented PTOs. The model is inching more towards nationalisation than the Government would like to admit.

Starting in 2010, all real assets were transferred to the Government. The year 2012 saw the introduction of the $1.1 billion Bus Service Enhancement Plan. In 2013, the Bus Contracting Model saw bus services in certain areas tendered out to PTOs. This was completed in 2016.

The Land Transport Authority (LTA) now owns bus assets and pays the PTOs an operating fee while collecting all fare revenue and setting the service levels. The Government is now subsidising public transport services to the tune of $2 billion a year – or $1 for every journey.

This mesh of responsibilities involving the operators, the regulator and the Government potentially introduces inefficiencies and additional costs. These will eventually trickle down to commuters and taxpayers, manifesting in either increased fares, higher Government subsidies, lower service coverage or all of the above.

Some service coverage is already being reduced. In the past three years, about 30 bus services have been shortened or removed. Such changes have affected my residents in Bedok Reservoir who continue to voice their concerns to me about long wait times and crowded feeder bus rides to the Bedok Mass Rapid Transit (MRT) station. Elderly commuters who favour direct trunk services, which facilitate shorter walking distances for the commute, are also affected by these changes.

As the Leader of the Opposition said when moving his Motion, we need to move beyond one-time fiscal handouts and explore possible structural changes to existing policies to reduce cost of living expenses for Singaporeans.

It is therefore timely to revisit the proposal to establish a National Transport Corporation (NTC). This was first proposed by the WP in 2006. We envisaged the NTC as a publicly owned, nonprofit, multimodal land transport entity which will oversee the planning and operation of all MRT, Light Rapid Transit (LRT) and truck bus services in Singapore.

The NTC offers many benefits over the current public transport model.

First, under the NTC, the substantial profits which go to PTOs and their shareholders could instead be redirected to benefit commuters. Such revenue could mitigate fare increases and subsidise transport for the elderly, people with disabilities and low-income households, directly addressing concerns about the cost of living.

Second, with full access to the NTC's financial records, the Government could set fares just high enough to ensure the NTC's fiscal sustainability, without overly burdening commuters. The complex fare adjustment formula can be done away with. Fare adjustments could be introduced progressively, avoiding abrupt changes during times of economic hardship.

Third, the NTC could manage bus interchanges, MRT and LRT stations and their associated linkways, leveraging the rent from these prime retail and commercial areas to support its operations. This will help moderate fare increases and the need for ever growing Government subsidies.

Fourth, the NTC could hire top transport engineers and managers, both locally and globally, based on their expertise, track records and commitment to public service.

Companies are fuelled by their people. Profit motives are not the sole drivers of efficiency and productivity improvements. By setting stringent key performance indicators (KPIs) and empowering these professionals, the NTC can continually improve service standards.

In contrast, the current penalties for PTOs' service disruptions are trivial compared to their profits and do not directly affect executive pay. The NTC's approach will see a marked improvement in performance management.

Fifth, for transparency and accountability, the NTC should disclose its executive salaries, primary profit sources and major cost drivers, enabling the Parliament and the public to examine its financial health and hold relevant parties accountable.

Sixth, a unified transport entity like the NTC would ensure more uniform service standards, enhanced service integration and comprehensive access to data for service improvement.

Utilising a vast array of commuter data, the NTC can employ artificial intelligence (AI) to forecast travel trends, dynamically directing buses and trains where they are most required. Improvement suggested by commuters in one region of Singapore could be applied island-wide.

Seventh, the NTC would yield economies of scale in procurement, staff allocation and technological infrastructure, leading to further savings that benefit commuters.

Eighth, the NTC would assume operational responsibilities currently held by the LTA, allowing the LTA to focus solely on its regulatory role, eliminating potential conflicts of interest from being both a regulator and an operator.

Lastly, the NTC would be given the freedom to experiment with and spearhead land transport solutions and position Singapore at the vanguard of global transport innovations. This could pave the way for Singapore to be an earlier adopter of advancements like autonomous buses or eco-friendly hydrogen-powered vehicles.

Sir, the NTC is a rethink of Singapore's public transport model. It shifts us away from public transport companies that profit from Government subsidies to a non-profit, unified provider that will be more efficient and affordable for both commuters and taxpayers.

This new model will place the needs and well-being of our commuters at the heart of our transport policy. It will not only address the immediate cost concerns of Singaporeans, but also steer Singapore's public transport into the future.

Sir, I support the Motion standing in the name of my hon friends, the Leader of the Opposition and Member for Aljunied, Mr Pritam Singh and the Member for Sengkang, Mr Louis Chua.

Speaker, Singapore has one of the lowest car ownership rates among advanced economies worldwide. In 2022, there were only 149 cars per 1,000 inhabitants here, a rate less than half that of the United Arab Emirates (UAE) or Taiwan, a quarter that of the UK and Switzerland, and six times less than New Zealand or the US.

The upshot of this, is that our streets are amongst the least congested in the world compared to global cities such as London, Chicago or Paris, where drivers spend more than 130 hours in their cars, sitting in traffic in 2022. Local commuters only lost 26 hours to jams and correspondingly less in terms of economic costs from lost time and petrol. This is admirable for a global city and one that we should not take for granted. This is evident for anyone who has had to endure rush hour in the major metropolitans of our neighbours, whether it be Bangkok, Kuala Lumpur, Jakarta or Manila. The major reason for this favourable anomaly is, undoubtedly, the system of Electronic Road Pricing (ERP) and the Vehicle Quota System (VQS), of which, COEs are the much-reviled offshoot.

COE prices hit a new high in October 2023, following repeated new records set in prior months. The Open category, now changes hands at $158,000, more than five times the recommended retail price of a brand new Honda Civic or Toyota Corolla sold elsewhere in the world. This is one of the major drivers of ever-rising pressures on our nation's cost of living. And COEs were implicated in the most recent increase in headline inflation.

Some may argue that cars in Singapore are a luxury and a car-lite society is both better for the environment and more than made up for, by an excellent transportation system. Surely, the price of COEs is only the concern of an elite few.

But for middle-income families with younger children, as so many of my Sengkang residents are, a car is almost a necessity for getting kids to and from child care and school, co-curricular activities, enrichment class and weekend shopping trips. Similarly, those who are elderly or less mobile may well feel that a car in the family is less of a luxury, and more of a need.

And car ownership is more widespread than we may think; two in five households own one. And even for those who do not own a vehicle, the price of cars and COEs bleeds into our costs every time we hop into a taxi or book a private hire car.

The high prices of COEs for cars had even spilled over into that of motorcycles, at least until recently, where the relatively low costs of ownership used to be a refuge for those with more modest means wishing to have their own private mode of transport.

The VQS and COEs were introduced in 1990. The objective, along with ERP, was to restrain ownership so that road traffic remains smooth. Inherent in the policy is a decision to exchange certainty in congestion management, for uncertainty in prices faced by aspiring car owners, along with the possibility of inequity in access and usage. Put another way, the Government consciously chose a quota system, knowing that it could lead to rising costs. If so, it follows then, that policy-makers should step in to manage prices when they get too far out of whack.

Since its introduction, the system has been repeatedly tweaked. These included minor adjustments, such as tenders became monthly instead of quarterly; but others have been more consequential, such as a decision to go from closed to open bidding, to make COEs non-transferable, or the collapsing of private-car categories into the present two.

But the Government chose to lock in vehicle quotas – with some initial allowance for growth – at the levels associated with the new car registrations established in the years following the roll-out of the VQS. This has led to significant variations in the total quota in different years; the difference in the highest and lowest supply years has been, on average, as high as 4,300 every month.

In 2018, the rate of growth of cars was frozen. This means that the stock of available COEs is now indefinitely fixed, and hence, the allocation of COEs is effectively zero-sum. If you are an aspiring car owner, but are priced out of the market, then too bad for you. If a well-off family can afford to buy multiple cars for each of their children, it will come at the expense of others who are less able to do so. This could be a delivery person who may need a vehicle for work, a household with a sick or disabled member that needs a car for routine hospital appointments, or a family of five who would benefit from one ride to shuttle their kids to and from school. But the Government has emphasised that – while it aims to keep COEs affordable – they were decidedly not a tool for enhancing progressivity.

This capsule history lesson is instructive, because it helps us understand not only the motivations behind why a COE system was rolled out, but also, why this history has unwittingly introduced shackles that inhibits the successful and equitable functioning of the system today.

Perhaps the best way to think about COEs and the VQS is that it is a two-step system for controlling the vehicle population. The VQS first sets the total number of cars that ply our roads. After this is established, bidding via COE efficiently allocates the available quotas to potential car owners.

COE bidding requires each bidder to make offers, but only pay the price of the lowest successful offer. It was inspired by auction theory, and in particular, Nobel Prize winning insights into how best to ensure that each bidder bids as much as their own private valuations would carry them. At the same time, no bidder has any incentive to deviate from the bids that they put forward. The outcome will, in theory, not only raise the same revenue as an auction awarded to the top bidder, but also allocate these COEs efficiently.

This is all here and good, but herein lies the wrinkle between theory and practice. While the COE system was modeled after this so-called second-price, sealed-bid auction, real-world considerations have meant a departure from this theoretical ideal. Bidding is now open, rather than sealed. There are multiple certificates to be issued, not just one. And perhaps, most importantly, to make things easier for car purchasers, we now allow dealers to bid on the buyers' behalf, for multiple COEs.

Sir, the Government has made some efforts to address the recent spike in COE prices. They have tweaked supply, mainly by bringing forward confirmed five-year COE de-registrations and have increased bid deposits for motorcycles, while shortening the temporary validity period. But these have had limited effect, which is unsurprising since the moves are one-off.

Measures that appeared to contain prices in the motorcycle COE markets are unlikely to work for car COEs, since dealer strategies for selling cars and motorbikes differ.

Perhaps most importantly, the freed COEs still constitute only a drop in the bucket of the overall quota shortfall relative to high-quota years. Even with the cut-and-paste measures announced in November, as shared by Senior Minister of State Chee Hong Tat yesterday, my calculations suggest that these adjustments inject about 10% more COEs into supply, on average within each category per month. Whereas a more decisive cut-and-paste is required to genuinely move the needle.

To be clear, the Government is well aware of how relative quota differences are unequal across the years, and has been aware of this for a long time. In response to then-WP MP Mr Low Thia Khiang's query in 1998, about whether COE prices were due to such quota imbalances, then-Minister for Communications Mah Bow Tan simply explained that they were fixed at the beginning of each quota year, conveniently side-stepping the issue of whether a more balanced distribution of quotas were called for.

Members of the public also recognise this. A letter to The Straits Times on 14 October 2023 called for managing COE demand and supply, not alternative, newfangled systems. Another online commenter to CNA claimed that we, and I quote, "are being penalised unnecessarily by a good system gone rogue". Transportation experts also expressed their displeasure that the COE system has not gone through a more fundamental review to deal with changes since being introduced 33 years ago.

And unlike Vegas, what happens in the car COE market does not stay in the COE market. Rising COE premiums affect the prices of used cars, of course. But they also affect the cost of motorcycles, which are frequently used not only for transport, but also to make a living. High COEs also add fuel to other expenses already on fire, ranging from private hire fees to motor repair.

Yet, in response to a PQs filed by the hon Member Mr Yip Hong Weng in 2022, the Ministry of Transport (MOT) stated that they would not be exercising any controls on the private hire car (PHC) market. The response to another PQ filed by my hon friend Mr Louis Chua, likewise shunned the idea of restricting PHCs from the COE bidding process. Indeed, the Ministry has gone as far as to say that "LTA has no plans to review the COE rules".

Now what can we do? One approach, is to further segment the COE market in some way. This decision is not as radical as it seems. Since the scheme was first introduced, there have been changes to the number of categories, before being continually refined to the present five as I mentioned earlier.

Today, there are routine calls to cater to separate, specialised categories of COEs. One way would be to drop the Open category altogether, or further tweak the criteria for the other categories. One could also create a category specifically for vehicles driven primarily for commercial purposes or, as I had suggested in my speech on the Electric Vehicles (EVs) Charging Bill late last year, for EVs.

However, one potential implication of introducing additional categories is that, depending on the distribution of demand among the potential buyers, there could well be greater upward pressure on COE prices. Overall, the evidence suggests that categorisation is often gamed, and as a result, would likely do little more to improve equity considerations. so, for me, it does not offer a substantive way forward, in terms of arresting price increases, even if it could be used to fulfil other objectives.

The increased pervasiveness of private-hire cars, and their number has grown almost fivefold over the past decade, has also been blamed for rising COE prices. One aggressive solution is to ban PHCs from the COE market entirely, managing their quotas separately. MOT has suggested that there is no evidence to support this argument and has even gone as far as to suggest that doing so, could even drive up costs for consumers.

Even so, it makes sense to remove PHCs from regular Category A (Cat A) and Cat B bidding. Instead of banning such vehicles from the bidding process altogether, bidders for high-usage PHCs should be allowed to do so in the Open category, but be allowed to pay the respective Cat A or B prices. This is actually the current practice for taxi and cabs and given how PHCs essentially replicate many functions of the taxi – insofar as road usage is concerned – standardising the COE treatment for vehicles effectively used for commercial vehicles still makes eminent sense.

Of course, the practical question is how PHCs may be properly classified, if this were to be the case. I do not think that with rideshare data easily obtainable, that a data-savvy Government such as this cannot successfully make a determination between low-use PHCs – that is, cars that are only occasionally being operated as PHCs, when they do not exceeding a certain threshold of rides a month for instance – versus high-use PHCs, which are primarily operated as rideshare fleet cars. PHC drivers will be required to comply with their usage group, much like how weekend cars were restricted. And they will be monitored, by asking ride-hailing application companies to furnish these data. Only high-use PHCs would then be required to bid in the Open category.

Another strategy is to alter the bid structure. One such suggestion – which has previously been rejected by the Government – is to pay for exactly what one bids, instead of the lowest successful bid. Alternatively, bids could be set in terms of percentages of the open-market value of the vehicle. This system, the so-called ad valorem system, has been championed by some academics. Relatedly, categorisations could be altered and pegged not to the, say, cubic capacity or engine horsepower, but market value. Proposals of this nature are reasonable and have the added advantage of making the system more progressive. But, in my view, such proposals will make only a small dent on COE prices.

What would make the most impact is to smooth the vehicle quota supply by transferring excess quotas from the high-supply years to the low-supply ones, such that quotas are broadly equal across future years. Importantly, this involves more than just the marginal transfers from expected de-registrations that are largely the focal point today.

As mentioned earlier, the feast-and-famine nature of the COE market has long been recognised as a problem. What has made this approach even more problematic is that, in low-supply years, high COE prices discourage de-registrations since car buyers need to purchase new COEs at the high prevailing prices, whereas in high-supply years, those who have secured COEs at the high prices have incentives to sell their COEs, pocket the prorated reimbursement value while eating some depreciation, and re-enter the COE market. Both practices exacerbate the supply imbalances.

Hence, the existing practice of reimbursing early de-registered COEs at their the book value should end. We may even wish to reconsider transferability, since there is very little evidence that this practice actually increases speculation. But importantly, transferability should be allowed not to other car owners, but to other cars in the same category, for a given COE holder. This preserves the flexibility for car owners to sell early should their circumstances change, without introducing perverse incentives to game the system.

Thus far, I had focused mainly on supply-side proposals. What about demand? Hopefully, it should be clear that the enormous variation in COE prices has more to do with known and alterable supply factors, rather than demand, which the data suggests are secondary. But perhaps more importantly, demand effects should be expected to moderate even further in the future, since increases in per capita incomes – which alter structural demand growth – should already be expected to moderate, given how we have already attained the status as a high-income country.

Still, two demand-side proposals merit further consideration. First, dealers should no longer be allowed to bid. There is substantial evidence that speculators bid up COE prices. Because dealers have a greater willingness to pass on costs – or occasionally absorb loss – they could contribute to upward price pressure, as some have suggested. Others, to be fair, have argued that dealers have an incentive to keep COE bids low, since they sell cars and COEs in a bundle, and can pocket the difference if COE prices are low.

Regardless, the evidence suggests that dealer intermediation has likely resulted in greater concentration in the distributor industry, and such market power is seldom good for competitive prices. After all, price discovery has already improved substantially with open bidding, thereby diminishing some of the benefits of dealer hand-holding. In my view, the presence of distributors – despite the benefits of convenience of having a one-stop shop for purchasing a car – interferes enough with auction prices as to render their exclusion the lesser evil. Better for such distributors to offer advisory and guidance, perhaps, for a fee, than be in a market-making position of collecting and making multiple bids.

Second, require second car purchases to be in the open category. The inequity of second or third car purchases has bothered many, and one proposal has been to apply some form of additional buyer duty on such purchases, as the Member Hazel Poa has mentioned, under the premise that these purchases – however small – could still fuel demand and push up COE prices, as my hon friend Gerald Giam has suggested. While the Ministry has declined to pursue such restrictions, one alternative – which admittedly would require some policing – would be to require households seeking a second or third car to do so in a distinct category, thereby limiting their price pressure on Cat A and B.

Sir, I have focused on solutions in the COE market for cars. Even so, I will reiterate what my hon friend Faisal Manap had previously shared about our position on motorcycle COEs. The issues in this category are somewhat distinct, not least because many riders are lower-income and require access not just for private transportation but to make a living. Progressivity should, therefore, be an even greater concern in this market. To this end, one is left to wonder why motorcycle growth is constrained in much the same manner as cars, given their much smaller vehicular footprint.

I will close, Mr Speaker. I believe that the recent cyclical high in COE prices has come at an inopportune time and has contributed to already rising costs of living. The existing VQS-COE system is broken and, while the Government has made tweaks to the system, these do not address the true underlying problem that has led to boom-bust cycles in COE prices. Let us not ignore the most important driver of supply – the imbalanced monthly quota – and some of the most prominent sources of demand, from PHCs and wealthier multiple-car buyers. Let us better manage the COE system, an important driver of rising costs of living, which is consistent with the goals of the original Motion, which I support.

Mr Speaker, Sir, my esteemed Workers' Party (WP) colleagues have filed the original Motion regarding the cost of living in Singapore at a time when many Singaporeans continue to feel the resulting pressures. The impact has been especially severe on lower-income households, which I believe the Government is aware of.

I welcome the support measures that have been announced to date towards alleviating some of these pressures, such as the top-ups to the payouts under the Assurance Package, the CDC Vouchers, the Public Transport Vouchers and so on. These measures are meant to bolster the existing social safety net.

The social safety net which exists in Singapore is multi-layered, which the Government referred to previously as a "kueh lapis", with each layer meant to tackle a specific area of need. It is an approach meant to prevent dependency, free-riding and abuse of the various measures in place. I also note that Deputy Prime Minister Lawrence Wong had recently said that ComLink would be enhanced towards helping families in non-financial ways, such as coaching. This is meant to aid social mobility and prevent further social stratification.

Having all these systems in place is well and good. However, I believe it is also important that we establish a means of assessing the effectiveness of our social safety net. To this end, I would like to reiterate a call I first made back in 2014 calling for Singapore to adopt the International Labour Organization (ILO)'s Social Protection Framework.

ILO's social protection approach calls for a "fair and inclusive globalisation" involving an "integrated set of social policies designed to guarantee income security and access to essential social services for all, paying particular attention to vulnerable groups and protecting and empowering people across the life cycle". There are four essential guarantees, namely, "access to essential healthcare for all, income security for children, assistance to vulnerable groups, and income security for the elderly and disabled."

If the Government would prefer a more localised framework, then it is notable that a group of academics led by Assoc Prof Teo You Yenn and Dr Ng Kok Hoe have published two reports on the "Minimum Income Standard" for households in Singapore. The latest version was released in September 2023 and provoked discussions in the media and online forums.

The report has a comprehensive definition for what is considered a basic standard of living in Singapore. It is about having opportunities in education, employment and work-life balance, and access to healthcare. A basic standard of living "enables a sense of belonging, respect, security and independence, and includes choices to participate in social activities and the freedom to engage in one's cultural and religious practices."

In responding to the report, three Ministries, namely, MOF, MOM and MSF, released a joint statement. In that statement, they noted that what the report described was, I quote, "what individuals would like to have". The Government also recapped the various measures that had been taken to address the needs of lower-income households, such as the payout increases for ComCare, the Progressive Wage Model and the Majulah Package. According to the statement, the Government, I quote, "regularly reviews the scope, coverage and the payout quanta of our schemes."

I believe that the process of reviewing the various layers of social assistance can be further improved. To this end, I would also like to reiterate my previous call for the establishment of three Social Protection steps, corresponding to 30%, 50% and 80% of the median income per household member. Based on the median income per household member of $3,247 released in February 2023, the three steps would correspond to approximately $1,000, $1,700 and $2,600. Broadly, these levels do correspond to the existing thresholds for the Community Health Assist Scheme (CHAS).

Using the resulting statistics, I would like to propose again that MSF publish an annual Social Protection Report. The report could include information on the number of recipient households and track movements of households from one step to another, amongst other statistics.

There are several good reasons for establishing a more systematic approach towards tracking the effectiveness of our social assistance programmes via the Social Protection Report. It would create accountability for the use of public funds in our social assistance programmes. Rather than report on spot figures on the numbers of recipient households, the report would present a more holistic picture on the state of social protection and assistance in Singapore.

The Government could also set objective KPIs based around the Social Protection Report. A vital KPI could be reducing the percentage of households in Steps 1 and 2 within a reasonable timeframe, perhaps within five years.

If the percentages stagnate or if the report indicates a lack of progress, it could indicate a need to re-examine current approaches and identify gaps in the existing social protection system. For example, some recipient households may be in need of assistance in securing a place in a childcare centre or a student care centre for their primary school-aged children so that the parent can pursue employment without worrying about caregiving.

The Social Protection Report could also be useful in raising awareness among Singaporeans of the nature of the issues faced by our lower-income groups. This, in turn, could foster better coordination between Voluntary Welfare Organisations (VWOs), non-governmental organisations (NGOs) and the Government agencies as they rely on a unified set of statistics and tracking tools. It may also encourage more individuals who are better off economically to step up and help their fellow Singaporeans in need by volunteering their time, energy or just making donations to aid the work of VWOs and NGOs. Sir, in Malay please.

(In Malay): [Please refer to Vernacular Speech.] The Workers' Party (WP) Members of Parliament have tabled a motion suggesting that the Government review its policies with the aim of lowering the cost of living for Singaporeans and their families, especially the lower income group who are more affected.

In 2014, I suggested that the Government adopt the social protection framework of the International Labour Organization. I would like to repeat the same recommendation to the Government. Through the framework, the Government is able to establish policies that guarantee income security and access to essential social services for everyone, giving special attention to the vulnerable group, and protecting and empowering our people throughout their life journey.

There is also another framework in the report on Minimum Income Standard published by academics, Assoc Prof Teo You Yenn and Dr Ng Kok Hoe. I am confident that with the appropriate framework in place, we will be able to monitor and review the effectiveness of the social assistance policies for lower-income Singaporeans. I would also like to once again suggest that the Government establish three levels of social protection, where each level matches the 30%, 50% and 80% level of median income.

I further recommend that the Ministry of Social and Family Development (MSF) publish an annual report on social protection, using information that includes the number of families receiving social assistance, the number of families who have successfully progressed to a higher level, and more. With this information, we can better understand the effectiveness of the social assistance policies that exist in Singapore and also consider the need to change policies so that appropriate assistance can be provided for those in need.

(In English): Sir, the Forward Singapore report that was recently released spoke of the risk of our society becoming more stratified and less mobile as our society develops. The Government pledged to do more to ensure equal opportunities to temper unequal outcomes and prevent the creation of a permanent underclass. These are objectives I support as well.

The Social Protection Framework I have proposed would complement the Government's effort to achieve this objective and track the progress of efforts undertaken towards achieving them. Sir, I support the original Motion moved by the Leader of the Opposition.