Debated in Parliament on 7 Nov 2023.
Debate resumed.
Senior Minister of State.
Mr Speaker, cost of living is a major concern around the world. Food and energy prices have risen significantly, caused by disruptions following Russia's invasion of Ukraine and extreme weather patterns.
Many countries were affected. For instance, Germany saw natural gas prices peak in 2022, at nearly tenfold of the 2021 average. While prices have since moderated, they remain significantly above the pre-war prices. India continues to see prices spike across various food items, including essentials like rice and vegetables. From June to August this year, tomato prices surged by 1,400% at some wholesale markets.
We have experienced price increases in Singapore, too. But, thankfully, not at such magnitudes.
But we have to acknowledge that inflation has affected all Singaporeans. Families need to spend more when they go to the market to buy groceries or when they have their meals in hawker centres and coffee shops.
My residents in Bishan-Toa Payoh are affected, too, including lower-income families, retirees and couples with young children and elderly parents to support. As MPs and Grassroots Advisers, we understand the pain that our residents are going through, and we feel for them and their families.
On top of imported inflation, we also face rising domestic cost pressures.
We have a tight labour market and low levels of unemployment. Real wages have been rising for workers across the board. We are committed to raising the income and skills of our lower-wage workers – something I trust Members from both sides of the House will support. Through the Progressive Wage Model and other measures, the earnings of our lower-wage workers have increased faster than median wages.
But wage growth means higher business costs, especially in more manpower-intensive sectors from healthcare to food services. This has contributed to overall inflation.
Right now, inflation has peaked and is on a broad moderating path. Core inflation fell from the peak of 5.5% in January this year to 3% in September 2023. It is expected to edge down further to between 2.5% and 3% in December.
MAS expects the moderation to continue for 2024, with core inflation forecast at 1.5% to 2.5%. If we include the impact of the GST rate increase in January, core inflation for 2024 is projected at between 2.5% and 3.5%.
Fortunately, the impact of the GST increase is one-off. It should not cause an ongoing increase in the Consumer Price Index (CPI) in future years.
These are positive signs, but the Government remains cautious because the global situation is uncertain and there are dark clouds on the horizon. Further shocks to global energy and food prices could bring additional inflationary pressures and economic slowdown. There are many uncertainties in our external environment. But what is clear is this: the Government understands the concerns of Singaporeans and we stand ready to support Singaporeans where needed.
Sir, the Government has cushioned the impact of global inflation on households by adopting an effective multi-pronged approach.
First, MAS moved early to tighten monetary policy significantly, substantially strengthening the Singapore dollar. This has helped to contain imported inflation and preserve our international purchasing power. Had we not done this, core inflation this year in 2023 would have been about 2.5 percentage points higher.
Second, we keep our economy competitive to create good jobs and sustain real income growth for Singaporeans. Between 2017 and 2022, real median income grew by 1.8% per year. Real income at the 20th percentile, that is, lower-income households, rose even faster, at 2.9% per year over the same period.
Unfortunately, in the first half of this year, median real income declined, even though nominal income rose slightly, as the Senior Minister of State for Manpower updated the House earlier today. This is due to the weaker economic outlook and elevated inflation.
It is understandable for median real income to have ups and downs, depending on the overall economic performance. But our experience in Singapore is that so long as our economy grows and remains competitive, real income can continue increasing for a broad segment of our workers.
In the long run, the key to sustaining real wage growth is to raise productivity and upgrade the skills of our workforce, to take on better jobs with higher pay. The Government has invested in many initiatives to support businesses and workers in this transformation and we will continue to do so.
Third, we ensure that basic needs like education, healthcare, housing and public transport remain accessible and affordable for all.
Everyone receives some help in these areas, but those with less receive more support. It is a fair and progressive system.
Even as inflation is moderating at the macro level, we recognise that many Singaporeans feel the pressures from higher costs of living. MPs from both sides of the House have raised this topic in Parliament, reflecting the concerns of our residents.
To our fellow Singaporeans, the Government hears you and understands your worries. That is why we have been doing more to support Singaporeans, to cushion the impact of rising prices. We review our support regularly and step in to enhance it when necessary to provide additional support, especially for lower- and middle-income families.
The Government enhanced the Assurance Package in Budget 2023.
As Members will recall, 2022 saw the fastest rate of increase in prices since 2008, with consumer prices going up by 6.1%, compared to 2021. To help households cope with this increase, the Government enhanced our support from the $6.6 billion announced at Budget 2022 to $9.6 billion.
This way, we fulfilled our commitment to offset additional GST expenses for at least five years for the majority of Singaporean households and for about 10 years for the lower-income households.
Recently, in September 2023, the Government announced a $1.1 billion Cost-of-Living Support Package. This includes a $800 million enhancement to the Assurance Package, bringing it to over $10 billion.
Singaporeans will receive the additional support from these packages soon. Every adult Singaporeans will get at least $200 in cash next month. Amongst them, about 2.5 million eligible Singaporeans will get $500 or $800 in cash. And every Singaporean household will receive $500 in CDC vouchers in January 2024. HDB households will also get more help in U-Save and S&CC rebates.
Many of my residents, including retirees who are staying in private properties, said they appreciate the additional support provided and look forward to receiving the $800 special payment in December and the $500 CDC vouchers in January next year.
Through all of these packages, the Government will fully cover the increase in spending by lower-income households this year due to inflation and the GST and substantially cover the increase in spending by middle-income households.
The Government provided this assurance at Budget 2023 and we will honour it.
Sir, different families have different circumstances and challenges. The broad-based support that we provide will help every family, but we recognise that there may still be gaps for some households. For families who need more help, we have other supporting measures, such as ComCare and the Silver Support Scheme.
We will continue to monitor the trends closely. As we have often said, we are prepared to do more to support Singaporeans should it become necessary and we will do so in a manner which is fair, effective and sustainable for both current and future generations.
The Government will continue to do our best to operate key services efficiently and keep costs of providing services as low as possible.
In the case of water, PUB incorporates successful R&D efforts into its operations to reduce costs. For instance, the upcoming Tuas Water Reclamation Plant (Tuas WRP) will generate 80% of the energy it requires for used water treatment, compared to only 25% for the conventional WRPs. This will reduce energy costs and is made possible through enhanced primary treatment of used water and co-locating with the Integrated Waste Management Facility.
Tuas WRP will also adopt membrane bioreactor technology to produce higher-quality effluent, which can be directly discharged to the sea. This avoids the need to construct a long and deep discharge pipe, which could have cost an additional $650 million.
But despite our best efforts, the cost of providing key services will be affected by rising inflation, including higher energy and manpower costs. So, the unavoidable question for us is how we want to pay for the cost increases.
It is fair for these cost increases to be borne by the users and beneficiaries of these services – if not in full, at least partially, so that they are prudent in their usage. For example, when the cost of providing electricity or water goes up, we do want users to find ways to improve energy or water efficiency and to reduce their consumption.
Even as some of these cost increases are passed on to users, the Government is mindful that we must keep basic services affordable. For essential services like public healthcare, users only bear part of the cost. When costs go up, a large part of it is paid for by the Government through increased subsidies so that the bills facing users remain affordable.
When fee increases cannot be avoided, we also provide targeted and direct support for more vulnerable groups in society, such as lower-income and retiree households. Examples would include U-Save rebates and public transport vouchers.
Sir, it is always tempting to ask: why not have Government simply subsidise the services themselves?
But we need to remember that the cost increases do not magically disappear as a result. They still need to be paid for, whether by taxpayers today, or by our children and grandchildren in the future.
We know from the experiences of other countries that subsidising petrol, electricity or water directly causes problems.
First, it blunts the price signals and results in over-consumption because there is less incentive to improve efficiency and reduce wastage.
Second, households will get the subsidies whether they need them or not. Furthermore, the wealthier segments of society are likely to end up getting the larger share of the subsidies, because they consume more. That is what happens when governments give out more subsidies for water and fuel. I am referring to direct price subsidies.
Who benefits more? It is inevitably the higher-income groups with bigger homes and bigger cars, swimming pools and jacuzzis.
So, the way we design our subsidies is important. Instead of subsidising the services themselves or designing tiered pricing schemes, we price the services fully, but give direct help to households that need financial assistance, in cash or vouchers.
This way, we can target more help to lower- and middle-income Singaporeans. It is more cost effective and we can achieve better outcomes for society as a whole.
Sir, let me now respond to some of the issues that Members have raised on water prices. I think Mr Pritam Singh would agree with me that water security is a matter of national survival. Today, Singaporeans enjoy an uninterrupted supply of high-quality water. This did not come by accident, but is made possible by long-term planning, innovation and gumption. Our founding Prime Minister Lee Kuan Yew famously said once: "every other policy has to bend at the knee for our water survival".
And that is precisely what happened – one of the most remarkable achievements in modern Singapore. We now have a sustainable and robust water supply system based on four National Taps. These are imported water from Johor, local catchments, NEWater and desalination. Each of these taps plays a vital role in ensuring a safe and resilient water supply. But each of these taps also faces rising costs.
To safeguard water security, we need to continue making investments to upgrade and maintain the system, while stewarding our limited resources. Otherwise, the miracle that Mr Lee achieved will be short-lived.
Therefore, we must first right-price water to reflect its scarcity and to encourage its sustainable and prudent use.
I was listening carefully to Mr Pritam Singh's speech earlier I do not think Mr Singh will disagree with me on this point.
Water is priced to recover the cost of its supply and production and to reflect the cost of producing the next drop of water from NEWater and desalination. Even with active cost mitigation measures by Public Utilities Board (PUB), the total cost of supplying and producing water has increased significantly.
Singapore cannot compromise on having a high-quality and reliable water supply. It is for our national survival. It is necessary to revise the water price now to catch up with these cost increases. Deferring the price increase now will only result in a widening cost gap, that has to be made up by larger, more significant price increases in future.
To cushion the impact of higher water price in 2024 and 2025, the Government will provide eligible Singaporean HDB households an additional $20 per quarter of U-Save from January 2024 to December 2025, or a total of $80 per year for two years.
The additional U-Save rebates will, on average, fully offset the increase in utility bills for 1- to 2- room flats and about 80% for 3- to 4- room HDB flats and about 65% for larger flats. On average, this translates to 3- to 4- room HDB flats paying about $2 more per month and 5-room HDB and larger households paying about $4 more per month.
Sir, the WP also suggested having additional tiers for water price. As I mentioned earlier, we price water to reflect its scarcity value. This means the same rate is paid by everyone, from the very first drop used by the household, so that all users take into account the scarcity value of water. To discourage excessive use and to send a message to households on water conservation, we set a higher price for water consumption that far exceeds the average household consumption level. And as Mr Pritam Singh pointed out, this threshold is set at 40 cubic metres a month to accommodate most household needs. Over 96% of households consume less than this threshold.
Having additional tiers below 40 cubic metres would mean that all households, rich or poor, pay a water price lower than its scarcity value for the first block of consumption. Or, if you have even more tiers, then, across the different tiers, the water that is being consumed at the lower tiers will also include a subsidy to the wealthier families that consume more water.
This would distort the households' incentive to conserve water from the very first drop. It also means that the Government will have to subsidise everyone for water, not just the lower- and middle- income, which is more costly and inefficient.
Instead, the Government's approach is to price water fully. Then, we provide targeted and tiered support though our U-Save rebates to those who need it most. Lower-income families staying in smaller flats get a larger rebate, as I shared earlier, which effectively translates into a lower price for them.
Businesses do not receive U-Save rebates. We do not subsidise their water or electricity consumption. Instead, we work with them, including helping our SMEs to be more energy and water efficient.
Sir, we also cannot have our cake and eat it. If the Government provides broad-based subsidies for all households through a multiple-tier water price, we cannot then also give out U-Save rebates for the same purpose.
The experiences of other countries have shown clearly that broad-based subsidies can lead to wasteful and ineffective outcomes. The Government is unable, after spending on these subsidies, to have sufficient resources left to provide more targeted help to those who really need it.
Mr Speaker, the same rationale applies to electricity. We have taken steps over the years to strengthen our energy resilience to ensure supply stability and continuity, and this is an important task that MTI, EMA and the power sector has taken on.
The tariff, as Ms Sylvia Lim mentioned, should reflect the cost of producing electricity from the first electron. Just as water, we want to price it correctly from the first drop. And then, what we do, similar to water, is we then provide means tested U-Save rebates to help families, especially lower- and middle-income families, give them more help, give them more support.
Sir, Ms Sylvia Lim's idea of time-of-use pricing is something which we do agree with. And that is why MTI and EMA have also announced an initiative as Ms Lim had mentioned in her speech. This is an accurate reflection of the actual cost of producing electricity during different periods of the day.
Sir, I would now turn to GST. Overall, we have provided high quality public services to Singaporeans and we have achieved good outcomes for our programmes, and we were able to do so, despite having an annual Budget that is less than 20% of Gross Domestic Product, which is much lower than most advanced economies.
Nevertheless, the Government's spending needs are rising steadily, especially healthcare costs as our society ages. There is therefore a need to raise revenues to pay for these higher expenditures. We have explained this in the House and also elsewhere many times.
The Opposition has once again asked if we can defer the GST increase, especially given our higher-than-expected revenues. This too has been debated thoroughly in this House. I think it is important to set out once more the Government's philosophy behind the GST system.
First, the GST is a critical component of our tax system and we are raising the GST not for immediate funding needs, but for our medium-term needs. This includes rising social spending in areas such as increased healthcare for our ageing population and more support for vulnerable segments of society.
Second, we design our GST system to take care of the lower-income. In 2012, we made the GST voucher (GSTV) scheme permanent. The GSTV provides bigger offsets to lower-income households. Coupled with the absorption of GST on publicly subsidised healthcare and education, we achieve an outcome where lower-income Singaporean households face a lower effective GST rate than higher-income ones.
As we had shared in this House previously, the bulk of the GST revenues are paid by higher-income groups, as well as foreigners and tourists.
Third, we are able to defer the impact of the GST raises because of the comprehensive Assurance Package which benefits all Singaporean households. The Assurance Package will defer the GST increase for the majority of Singaporean households by at least five years. For lower-income households, we will defer the GST increase for them by about 10 years. Since launching the Assurance Package in 2022, we have enhanced it twice to uphold this Government's commitment.
Sir, we have gone through these points in this House before many times. And while the WP has consistently objected to the GST in previous years, we are glad that at the debate on the President's Address in April this year, the WP has acknowledged the need for a 7% GST. And earlier, I heard Mr Leong Mun Wai saying he also agrees with the 7% GST.
But the WP and the PSP should be upfront and consistent. It cannot have it both ways, objecting each time the GST rate needs to go up, but wanting to keep and spend the revenues from previous GST increases. The only disagreement, based on my understanding that the Opposition now has, is to ask if we could defer the GST increase, because we have higher-than-expected revenues.
Sir, I ask the Opposition to please look at the broader and longer-term fiscal trends. We may have had a good year this FY, but we do not have a structural surplus.
Our fiscal expenditures have been rising steadily and will continue to increase and we are almost certain to face a funding gap in the coming years if we do nothing about it. MOF had published an Occasional Paper earlier this year to highlight this trend.
We are expecting more social spending, in healthcare for our ageing population and to better support vulnerable groups in Singapore. Without the GST increase and tax measures announced in the last two Budgets, we would not be able to close the projected fiscal gap.
We have been fortunate to have higher-than-expected revenues in FY22. The Government did not plan its Budget on the basis that we will have these unexpected upsides in revenue collections. These were either sentiment-based revenues which are volatile from year-to-year, or due to higher-than-expected economic growth.
And when we have these surpluses, the Government has made good use of them by flowing back these upsides to support businesses and households. We have done this during Budget and through off-Budget support packages.
We also allocated some of these surpluses into Funds for specific needs, such as the ComCare Endowment Fund to provide support to our lower-income families, or the Coastal and Flood Protection Fund to protect ourselves against sea level rises.
But we should follow through, to raise the GST to 9% on 1 January 2024. We can be confident that households will be amply cushioned by the Assurance Package, while we will have the higher GST rate in place, and can start to collect additional tax from non-citizens and visitors.
Mr Speaker, I will now turn to transport-related issues, and I will start first with public transport and then I will cover some of the points raised regarding COE.
Sir, on public transport, we had a session in October, during the Sitting, I think I answered a series of PQs, and I remember having supplementary questions from Mr Gerald Giam as well.
Sir, Mr Giam spoke about the profits earned by the public transport operators. I had mentioned this previously when we were discussing this issue, and I explained to Mr Giam and the House that we have to look at the different types of public transport service.
For buses, for example, the revenue that is being collected from commuters does not go to the operators. The revenue comes to the Government, and the Government then pays the operators. We pay them a rate that was agreed through the bus contracting tenders. And I also shared with Mr Giam and the House that over time, as we gain experience in doing bus contracting, we had been able to squeeze out more productivity improvements and reduce the payments and the rate of return for the bus operators.
For trains, the operators do collect fares to cover their operating costs, so the fares do affect their overall financials. And I shared, during October's Sitting, that in the latest financial year, after accounting for Government grants, SBS Transit reported a loss of several million dollars for their rail operations, while SMRT Trains reported an operating profit of $6 million dollars, which represents a profit margin of less than 1%.
So, just to be very clear, these are the kind of returns for the rail operations. And I also shared what we are doing, an ongoing process to try and improve the way we do bus contracting, to be able to squeeze out more savings for commuters and taxpayers.
Sir, Mr Giam had a second point where he mentioned about whether we can nationalise our public transport system. Sir, I think, first, we take a look at where we are today.
Do we have a well-functioning public transport system overall? I think so. Public transport fares, if you look at the lower-income households in 2013, public transport expenditure was about 3.1% of their household income, it has fallen to 2.4% in 2022.
So, from accessibility, affordability and also network improvements, system improvements, I think over time, our current system has achieved good outcomes for commuters, and this is also reflected in the overall survey results and ratings that commuters have given us.
Of course, I am not saying that there are no areas for improvement; there are, and we will continue to look at what we can do to improve. But overall, compared to many other cities, I think, to be fair to our public transport operators and to our public transport workers, who have been working very hard to achieve this outcomes, they have, overall, done a good job.
So, what Mr Giam mentioned about nationalising, and I think he calls it the NTC, is actually not a silver bullet. I hope Mr Giam can agree with me that nationalising is not an assurance or guarantee that outcomes would be better. Yes, you can take away the profit element if you nationalise and turn it into a Government department, but just because a nationalised entity does not make profits, does not make money, does not necessarily mean commuters will get better outcomes. I think we have to be quite clear about that. What we want, at the end, is to have better outcomes for commuters, to have a better transport system for Singapore.
Mr Giam also spoke about setting KPIs. Sir, we have seen from the experiences in other countries, how this approach sometimes may not work. I mean, if you look at history. The then-Soviet Union, under the previous central planning system, uses KPIs to try and track performance, and I think that I do not have the elaborate further. I think Mr Giam will agree with me that it is not a good outcome.
So, KPI is not a substitute for the profit motive that we need and the competition that we need, to spur the players to continuously improve. And we are adding additional pressure on them to improve their productivity. The new fare formula has a productivity component. We will exert pressure on them through this fare formula productivity component, to look at ways to continuously improve their productivity.
Sir, Mr Giam also mentioned about the coverage of service. I understand, and I think I did explain this to him previously, that when we do some of the changes with the bus services, some of the commuters will be affected, and I do recognise that – my residents, too, have been affected by such changes.
But the reason why we make these changes is because we have limited resources available to serve different needs, different groups of commuters. In different towns including, I am sure, Mr Giam's constituency, there will be new developments, new BTO flats, and the residents there will need new bus services to connect them to the bus interchange or to the MRT stations. So, where do we get the resources to serve these new demands? We have to look at how can we re-allocate some of the existing services.
It is not a simple exercise. We do not do it in a very drastic way because we do recognise the impact. We do it in a very calibrated manner, we look at which are the bus routes that run parallel to MRT lines, and where there is an option for people to take the bus, go to MRT station and then complete the longer part of their journey, the trunk service on the MRT. So, the bus then can provide better connectivity within the town as a feeder service.
But having said that, I have mentioned this to Mr Giam before and I still make the offer to him today, if there are some specific areas of concern faced by his residents, please do let me know, please do let LTA colleagues know. And we will discuss with you to see what we can do to improve the situation on the ground.
Sir, allow me to now turn to COE. I want to start by saying that we just had a session on this yesterday. I answered a collection of PQs. I think we took quite some time. And I think Ms Hazel Poa and Assoc Prof Jamus Lim were both present in the Chamber. I do not know whether they heard my reply yesterday, because some of the points that they raised seem to have reflected that they heard me. But again, some of the points that they raised, they may have missed out or maybe they have forgotten what I have said. So, it is okay. Let me please have this chance to address some of the points that they raised.
Sir, I will start by actually thanking Assoc Prof Lim for acknowledging that — well, he raised many different ideas. They are all the different fancy ideas for improving the COE system, that in the end, actually only make a small difference, or in his words "small dent". And what he feels, if I had heard him correctly, is that the more effective way is to do the smoothening of the supply of the COE.
Sir, that is exactly what I said yesterday in my reply. We are going to use the "cut and fill" method, not "cut and paste". "Cut and paste" is what you do on Microsoft Word. We are going to do the "cut and fill" method, where we "cut" the supply from the peak years, and then we fill the troughs, the short-term trough years.
So, by doing this, we are able to reduce the peak-to-trough ratio and achieve the outcome that I believe Assoc Prof Lim is also advocating for.
But I also, in response to Mr Saktiandi, gave a qualifier that we cannot overdo this, because you are effectively borrowing supply from the future. These cars that we are now borrowing the COEs from, are still on the roads. They have not yet been de-registered. So, if you overdo the "cut and fill", it means that in the short term, in the short run, you do have many more cars and it could lead to congestion.
So, therefore, yes, we are looking at ways to do more "cut and fill" and we have announced increases in the quota for this coming quarter – 35% more than the last quarter for Cat A, 35% more for Cat B, 65% more for Cat C. We are doing that, but we also need to be mindful of the impact if we overdo it.
But I do thank Assoc Prof Lim for actually agreeing with us, that this is the most effective way to be able to deal with these concerns that we see in the COE market.
Sir, Assoc Prof Lim also spoke about whether we could, if I heard him correctly, ban PHCs from COE bidding, and I think what he meant was then to have a separate category, because you cannot simply just ban them. I mean, there is genuine demand for these cars, so you cannot just ban them. I think what he meant was to have a separate category that they do not have to participate in the COE bidding with the Cat A and B. There is a separate category for PHCs.
Sir, I explained this yesterday that, of course, conceptually it is not unthinkable to do something like this, but the trade-off is this: when you create a new category for PHCs, the supply for the COE does not magically appear. We still have to look for where to re-allocate the supply of COEs to put into this new category.
We are not talking about a magical solution, where I suddenly have new supply coming in. So, if we accept that point, Sir, then we are looking at a re-allocation from Cat A and B when we create this new category. And when we do that, as I explained yesterday, it is difficult to ascertain at what level of the supply should you shift into this new category, because the PHC market is still evolving and there are fluctuations from quarter to quarter, as we can see from the data.
If you allocate too much, you shift too much, it will actually affect the supply of COEs in Cat A and Cat B, and that will cause prices to spike even further. I think Assoc Prof Lim understands this point. But if you do not allocate enough, you do not shift enough, then there could be a problem for the PHCs, and which will, in turn, affect the drivers and commuters.
So, this is something that, I think, we have to be quite careful. But, Sir, I did mention in my reply yesterday that we are studying whether there are other ways to address this concern, maybe not through the COE system, but whether there are other ways, taking into account the reality that PHCs do travel more on the roads, a point that Assoc Prof Lim also mentioned. But they also serve a useful role in society, for commuters to meet their point-to-point journeys.
Sir, Assoc Prof Lim also mentioned about pay-as-you-bid. Sir, this is not going to give a different outcome from the current system. Let me explain.
Our current system is open bidding. This is not a closed bidding, where I do not know what people are bidding and I just go into the bid without knowing what other people are bidding. The COE system is online, you go in, you can see very clearly what other people are bidding, and you decide then how much you want to bid, based on your willingness to pay and you look at where that bid price is right now, and whether you are willing to pay more than that, to be able to secure the COE.
So, whether we do pay-as-you-bid, or we do the current system, I think that the outcome will be the same. The second point that Assoc Prof Lim mentioned is, can we use open market value (OMV) instead of other criteria to determine the COE bidding?
Sir, we already have Cat A and Cat B to sort of proxy measure the kind of cars that people are buying. It is not a perfect correlation, of course, but many of the cars in Cat A do have a lower OMV compared to the cars in Cat B, so I think to some extent, this already achieves that purpose of being progressive.
But more importantly, Sir, we have the Additional Registration Fee (ARF). So, car ownership is progressive, the COE system has some elements of progressivity, but beyond that, if you look at the car ownership policy as a whole, the ARF is the other tool and perhaps the more effective and more direct way of having a progressive car ownership policy.
We, only very recently in Budget 2023, raised the ARF for luxury cars. And yesterday, I answered a question that after doing that, the number of luxury cars responding to the policy signals have actually come down.
I go back to my earlier point that Assoc Prof Lim mentioned as well, that he recognises that all these fanciful ideas are just going to have a small dent – in fact, I would say a very small dent – and this is not going to solve the fundamental issues. He agrees with us that the more fundamental approach, the better approach, is to look at how we can do more smoothening of the supply using the cut-and-fill method – which we are already doing.
Sir, let me now turn to some of the points that Ms Hazel Poa raised. Unfortunately, she is not in the Chamber right now. Ms Poa asked whether we can have a 0.25% growth rate for Cat D. I think this is similar to the question that the Leader of the Opposition asked yesterday and Mr Murali Pillai also raised in November last year.
As I had explained yesterday in the House, we have to look at the usage of motorcycles. It is similar to how PHCs are being used – because it can be dual use. People do use it for their personal use and also to do business, unlike, say, Cat C, where it is predominantly used for business needs.
But I do acknowledge the concerns that Mr Pritam Singh, Mr Murali Pillai and Ms Hazel Poa have raised – which is that the buyers of motorcycles tend to come from more lower-income households compared to car buyers. I had mentioned this in my reply yesterday. That is why we have lower ERP charges, we have lower ARF for motorcycles.
We will look at whether there are other ways to address this concern, to reflect the intent of what Mr Pritam Singh, Mr Murali Pillai and Ms Hazel Poa would like to achieve. But I do not think we should go down the path of having a growth rate because they are quite different from Cat C in that regard.
Ms Poa also asked about the point-based system. By this, I think what she meant is whether we can do the allocation by giving certain weightage to certain categories of families and buyers.
Sir, I understand where Ms Poa is coming from, but I think if you think about it in practice, if you are going to implement this idea, it is not so simple in practice. There are many Singapore families who would have a dependent, whether a young child or elderly parent. It would be very challenging to determine who is more deserving of a car. How would the person sitting at LTA be able to decide who is more deserving when all families would have different circumstances and needs?
Instead, our approach is to make mass public transport affordable, accessible and convenient, and also to complement this with shared point-to-point transport services, including taxis, private hire vehicles and car sharing and through this multi-pronged approach, be able to better meet the needs of our Singaporean families, who may not need to own a car all the time and use it all the time but they may need it during certain times of the week to bring the family out for an outing or to send their parents for medical appointments. If we can create more options for them to be able to use the car without necessarily having to own the car, I think that is one way in which we can help more families.
For certain categories of families and individuals, for example, persons with disabilities who need a car for their livelihood, we do have a Government scheme called the Disabled Persons Scheme where we waive the ARF, we waive the COE. This is something which we do on a very targeted basis to help these individuals.
Sir, on the point about foreigners or families who own multiple cars, I have addressed it yesterday, but since Ms Poa brought it up, allow me to explain this point again.
I shared yesterday that foreigners win about 1% of the bids for Cat A, 4% of the bids for Cat B. If you combine this with what I said earlier about the bidding system, they are not going to be the ones who are going to influence the bid price. Likewise, families who own multiple cars – they make up 5% of the total number of resident households.
So, again, the numbers are not so significant. We do not think that these two categories of buyers – foreigners and families that own multiple cars – will be the ones who actually end up driving the COE prices.
Because of that, introducing something like the ABSD may sound good, may make us feel "shiok" for short while, but it is not really going to solve the problem if our concern is about cost of living and high COE prices. It is not going to solve the problem. What Assoc Prof Lim mentioned earlier and what we are doing, the cut-and-fill, that is a more direct way of solving the problem.
Sir, I just want to end off on one final point on COE before I move on to my next topic, which is what Mr Leong Mun Wai mentioned. I think he may have misunderstood my data. Yesterday, I shared that the percentage of households that own cars has fallen gradually over time, from 40% to about one third now.
Maybe just allow me to clarify, Sir, that this trend has been happening not just in recent times when COE prices are high but even during the time when we have plentiful supply and COE prices were much lower. So, even then, we see the shift. It could be a generational shift. Maybe more people now may not feel that driving is necessary. Or like what I mentioned earlier, they may not need to own a car, they can just use the services of car from time to time when they need it. It could be that maybe they find that the public transport system has been improving over time and they would prefer to use public transport, which is also more sustainable for the environment.
Whichever the case may be, Sir, this trend has actually been consistent, whether COE prices are high or low. So, I thought I just clarify that point that Mr Leong mentioned.
Mr Speaker, we have been able to keep our public services and finances sound through this combination of not delaying necessary adjustments while providing needed support to households.
Even in years when inflation is high, we still have to raise some charges and taxes because it is necessary to do so. It is not prudent or sustainable for the Government to avoid or subsidise every cost increase. Doing so will entail either a high burden on current and future generations of taxpayers or a deterioration of service standards.
It is not the responsible thing to keep kicking the can down the road or to avoid introducing painful but necessary increases. We may make some people happy by pursuing such policies but when the financing gap starts to accumulate over time, we will make everyone worse off because it will be even more painful to fix the problem later.
Importantly, the Government's policies should be seen together and not in isolation or piecemeal. The different policies and measures work together as a whole to collectively help ease the cost pressures on Singaporeans without undermining our fiscal sustainability. This is why I support the proposed amendment from Mr Liang Eng Hwa because he is right that the Government should continue pursuing policies that together lower cost of living pressures on Singaporeans and their families.
Our policies need to be sustainable because we care for Singaporeans now and also for our children and grandchildren.
I also applaud and encourage the community and kind-hearted sponsors to continue stepping forward with philanthropic donations to help support vulnerable groups in society. There are many ground-up initiatives, including from the NTUC and community groups, which provide local-level assistance to vulnerable residents, on top of Government subsidies. You heard from some of our MPs earlier.
The CDC Mayors and many of our grassroots advisers do this regularly with community partners and donors. Community and corporations do their part alongside the Government in a whole-of-society effort to support the vulnerable.
This is our Singapore way – not just enabling ourselves and our family to do well, but also helping to support others in society so that we can progress together and leave no one behind.
Mr Speaker, the reality is that global inflation will remain elevated for some time to come. We cannot fully insulate ourselves from these global forces. Prices of goods and services will rise to reflect higher costs.
If we do what is politically convenient and prevent prices from rising, I am afraid we will create more problems. Giving more price subsidies will benefit certain groups at the expense of others. In particular, we end up helping the rich more than the poor. We will lose fiscal discipline and erode self-responsibility.
The fiscal deficit that gets created cannot be wished away and the burden will fall on future generations of Singaporeans. In the long run, it will hurt Singapore and Singaporeans.
Overall, the Government has moderated considerably the impact of inflation on Singaporeans, especially for lower- and middle-income segments, and we have done so on a sustainable basis, spending within our means and helping as many people as possible.
We will continue to monitor the need for more targeted support if inflation or economic outlook worsens. We will do so while maintaining discipline in ensuring that our interventions are fair, sustainable and effective.
Sir, we welcome the Leader of the Opposition's call for a review to make sure that our policies are fit for purpose in a new era of higher prices. The Government has been reviewing our policies, including as part of Forward Singapore. Some changes have already been announced, for example, the Majulah Package for young seniors and the new housing model. Existing schemes such as Workfare are being enhanced and new initiatives such as re-employment support have been proposed.
We welcome further inputs into these policy reviews as we chart our way forward, but not all ideas will be feasible or will achieve our shared goals of a fairer and fiscally sustainable system.
To Members of this House and to all Singaporeans, I want to assure you that this Government will be responsive to the concerns of our people. We will continue to do our best to mitigate cost pressures for businesses and families. Importantly, we will do this in a way that is responsible and right for Singaporeans, today and tomorrow. [Applause.]
Mr Pritam Singh.
Thank you, Mr Speaker, and thank you to the Acting Minister for responding to my intervention on relooking water pricing tiers.
As I heard him, when he spoke about broad-based subsidies, I was concerned that he may have misunderstood my proposal. As we know, the price of water has three components. That is how it is priced in Singapore. There is the tariff, waterborne fee and the conservation tax. I had not been talking about the tariff and the waterborne fee. I understand they have specific purposes. For example, the waterborne fee is a charge to offset the cost of treating used water and to maintain the public sewage system.
When I spoke of tiers for water conservation tax, I was not suggesting that, for example, a user at 35 cubic metres per month is going to be charged zero to 10 at one rate, then 10 to 20 – once you hit 35, if you pay the water conservation tax, that would be tiered for users who consume between 30 and 40 cubic metres of water. That progressivity, in my view, would serve the purpose of the water conservation tax, which is to reinforce the water conservation message. That was the suggestion.
The Acting Minister was talking about broad-based subsidies and the rich also getting subsidised. That was not the focus of what I was driving at. I hope I made myself clear. I will be happy to clarify if the Acting Minister has his queries on this.
Mr Speaker, I thank the Leader of the Opposition for his clarification. I understand where he is coming from. I think we are all on the same page when we want to look at how we mitigate the impact on lower-income families. We share the same objective.
The way that we are doing it now, all three components – the tariff, the water conservation tax and the water-borne fee – all three components actually add together to reflect the true cost of producing water, the next drop of water. And because of that, we feel that it is better to let this true cost be reflected from the first drop. But then, we help the lower-income with means-tested U-Save rebates.
So, I think our objectives are similar. But it is just the way in which we achieve it, we may differ somewhat. But I think, with Mr Pritam Singh's clarification, the gap has narrowed.
Mr Gerald Giam.
Sir, I thank Senior Minister of State for responding to my proposals.
I wish to, first, make a correction to one of the figures I cited in my speech earlier. I said between 2011 and 2022, SMRT and SBS Transit together posted profits averaging $55 million a year and reaching $110 million in the last financial year. The $55 million figure is incorrect. For that date range, it should actually be $74.6 million. So, the sentence, should read, "Between 2011 and 2022, SMRT and SBS Transit have together posted profits averaging $74.6 million a year, reaching $110 million in the last financial year." These numbers are from two companies' financial statements.
Sir, just some clarifications on Senior Minister of State's response just now.
I am surprised that the Senior Minister of State is saying that setting KPIs does not work and he cited the Soviets. Surely, he is aware that setting individual and team KPIs is an established practice in many organisations. Even the Ministerial salary framework includes KPIs.
But my point was that tying an executive's salary to their achievement of performance targets is a better motivator of that executive's performance than a company's profitability. It is also more aligned with commuters' interests.
Next, the Senior Minister of State said that with our NTC, there is no guarantee that it will get better outcomes. But what we are seeing now is a public transport model that is sucking up Government subsidies while still posting million-dollar profits which benefit shareholders, not the commuters. Can the Senior Minister of State then assure us that the current model is fiscally sustainable and will produce better outcomes in the long run?
Finally, just one last point. I was not criticising the public transport workers in any way. In fact, I think they are doing a fantastic job in terms of keeping our public transport system working. What I was talking about was the public transport model, not the workers.
Mr Speaker, first, let me thank Mr Gerald Giam for his clarification and showing appreciation to our workers; 4 November is Public Transport Workers' Appreciation Day. So, thank you to Mr Gerald Giam for acknowledging their hard work.
Sir, the profit numbers that Mr Gerald Giam cited represent the profit numbers for the group as a whole. So, if we look at SBST, for example, they have both local and overseas operations. Locally, they have bus, they have MRT. They also have taxis. They also have other operations. I am sorry, SMRT. I was referring to SMRT, not SBST. SBST does not have taxis. SBST has MRT, bus and also overseas operations.
So, if we take a look at the total package of the scope of what they do overall, I think those numbers would have to be looked at more specifically when it concerns the component that has to do with fares, because we are talking about fares here. Right? So, there is no point we have an argument about how much money they make with their advertising or their overseas investments. Those are separate. It is part of the numbers that you see as a group. But for the purposes of our debate here, we should be looking at the numbers that are linked to fares.
And as I explained earlier, Sir, for buses, yes, the profit numbers today that you see reflect some of the older contracts that we did previously. But if we look at the newer contracts, we have, with experience, actually tightened the terms and conditions. And there is now also more competition. We now have four bus operators. So, as a process, achieving savings for commuters and for taxpayers, that will take time to achieve, but we are making steps in the right direction. We are seeing a reduction in the returns for the newer contracts.
For MRT, I need to highlight that what we are talking about here again —
I am sorry, Sir, just to reiterate one more point on the bus is that the fares do not go to the bus operators directly. I mentioned this a few times. The fares come to LTA. LTA then pays the operators. So, if we collect less than what we have to pay them, that is actually Government subsidy.
The trains, I mentioned that the train operators do collect the fares and that is part of their revenue. But if we look at the train operations for both SBST and SMRT trains, the numbers, as I shared earlier, SBST making losses of several millions; SMRT trains making a profit of 1% return, $6 million.
So, I think we have to look at it in the right perspective rather than look at the macro numbers, which may not be relevant to the discussion that we are currently having with public transport fares.
On the second point about KPIs, Sir, I did not say that KPIs are not relevant at all. I did not say that. What I said was that KPIs should not be a substitute, because if you only rely on KPIs and nothing else, then you will have a problem. But I do not think that is what Mr Gerald Giam is saying as well. So, we may not differ that much. I think we can both agree that KPIs can form part of the overall performance management tracking, but they should not be the only way of improving performance.
And in the case of the public transport operations, if we look at buses, for example, one of the reasons why we are able to have better outcomes, partly, I want to give credit to our LTA colleagues. It is because, over time, we do learn how to do the contracting better. But it is also because there is more competition.
So, if you nationalise, you take away this competition element, you may not actually achieve the same outcomes as what you are able to achieve now. It is an assumption that nationalising, taking away the profit element, means better outcomes for commuters. Need not be.
Assoc Prof Jamus Lim.
Speaker, two clarifications from me.
The first has to do what Senior Minister of State Chee mentioned. He said he wondered if I heard him yesterday. Indeed, I did. And that is why I referred to the cut-and-fill method. But I also wonder if he heard me just now when I also pointed out that the Government action in the cut-and-fill method did not strike me as decisive enough. And by my calculations, it would not move the needle.
So, if the difference is one of degree, I wonder if the Government will commit to an eventual target of a more or less equal vehicle quota for every year sometime into the future. And if they are willing to do so, how will they actually avoid the existing incentives for individuals to sell COEs in shortage years and to buy them in abundant years. That is my first question.
The second one has to do with what the Senior Minister of State mentioned about PHC participation in Cat E. Just to be clear, my suggestion was that PHCs should – it is not that they should not be allowed to bid, but they should be treated the same as taxis rather than being banned altogether. So, on that, I wonder if Senior Minister of State Chee will agree that the common treatment of PHCs as well as taxi cabs makes much more sense than the current approach.
Mr Speaker, I did explain earlier in my response that, to do cut-and-fill, we have to also be mindful of the trade-offs because we are effectively borrowing from the future.
So, I did hear the suggestion from Assoc Prof Jamus Lim. Same concept but the Member wants us to do more. And I clarified that it is not that we do not want to do more but there are trade-offs and we need to be careful because, if you borrow too much, you actually may introduce more volatility. Please do not forget that the cars that are being deregistered in future, some of them may want to buy another car. And we are also borrowing from the future. So, you are effectively shifting some of the supply to now before the cars are deregistered. So, you are adding to the short-term congestion.
So, yes, we accept those trade-offs and we are willing to do some, but to what extent? There is a balance.
But the more important point is that we do not disagree on the method. We both agree that cut-and-fill to reduce the peak and trough is the more effective way.
If I may add, Sir, on PHCs, because that is the second question from Assoc Prof Jamus Lim. The injection that we have done, 35% increase for Cat A, 35% increase for Cat B, compared to third quarter, which is injected some already. So, this is in addition to that, we are injecting 35%, compared to third quarter. That number is actually more than for the previous few quarters the percentage of car-leasing companies that were bidding.
So, if you look at the companies that are bidding PHCs, I shared yesterday that, for Cat A, it is about 21% or thereabouts, it dropped to 16% in the last quarter. Cat B, I shared also that it is about 23% or thereabouts.
So, what we have injected, 35% for Cat A and Cat B, it is actually more than the bidding, the bids that were won by the car-leasing companies for the past few quarters.
Of course, I did qualify that I cannot predict how prices will move because that depends on demand, and demand is not within the Government's control. But in terms of planning and injecting, we are doing our best to try and inject as much as we can without affecting the future supply volatility and without affecting short-term congestion on the roads.
Sir, I think the point about having a separate category, I also explained this yesterday and also earlier. Allow me to just quickly recap.
It is not that it is undoable. But whether you treat it like taxis or you put it as a separate category, that means, different from taxis, the reality is that you still need supply to come from somewhere, right? You cannot just suddenly have new supply magically appear. It has to come from somewhere. And where would that be? It will be Cat A and Cat B.
So, if you create a new category, whether you put it together with taxis or you put it separately, you have to move some of the existing supply from Cat A and Cat B to this new category.
It is not that it is undoable or unthinkable but it introduces complexities because we run the risk of either over re-allocating or under re-allocating and that would have unintended consequences.
Ms Sylvia Lim.
Thank you, Speaker. I have one clarification for the Acting Minister. Does he not agree that when we talk about utilities in the current climate, conservation is a key aspect of it. I think the Government has recognised this. We have seen recent statements about the need to conserve energy and water.
In this respect, U-Save vouchers, no doubt they are appreciated by the residents who receive them, but it actually does not really encourage conservation of the utilities. So, I am just wondering whether the Acting Minister would agree that we may have to keep an open mind as to whether we need further tools to encourage residents to conserve on the use of utilities.
Mr Speaker, I am not sure why Ms Sylvia Lim felt that U-Save rebates are not encouraging people to conserve electricity and water. If we look at it from the recipient's point of view, this is a fixed amount, means-tested. But what they receive is a fixed amount. If they consume a lot, actually, the amount of subsidies they receive is still the same. If they consume less, then actually, the amount of subsidies can help them to sometimes even fully offset the electricity bill or to reduce it substantially.
So, the incentive to want to save is still there because it is a fixed amount. It is not embedded in the price, unlike a price subsidy, whereby if I consume more, actually, I do end up getting a higher quantum of subsidies because it is embedded in the price. In our case, we reflect fully the price so as we incentivise the right behaviour to conserve electricity and water, a point that we both agree. That is important. But the way in which we then provide the help is through the U-Save rebates. It does not distort the behaviour. It does not change the incentive to want to conserve, but it provides the help in a means-tested manner to our lower- and middle-income families.
Ms Hazel Poa.
I would like to seek two clarifications from the Senior Minister of State.
First, the Senior Minister of State mentioned that the bus fare goes to LTA, not to the bus operators. Can I clarify then who proposes the revision in bus fares? Is it LTA?
Second, I thank the Senior Minister of State for responding to my suggestions about the points-based system. He mentioned that it would be difficult because there are many families with children and, therefore, a bit difficult to decide. Would he consider a system whereby, say, the bidding price is given a certain number of points, say, every $1,000 is one point, and then every child that the family has is allocated a certain number of points, so that those with more children get more points and those families with people with disabilities (PwDs) also get additional points? And then COEs are allocated based on the total number of points. Would he consider a system like that?
The Senior Minister of State mentioned the Disabled Persons Scheme (DPS), which I understand is only for livelihood purposes, not for families with disabled people, and for them to move around.
Mr Speaker, the public transport fares are set by the Public Transport Council. So, it is a very transparent process. There are some indicators that we look at – what is the national benchmark for wage increases, what is the CPI, what is the energy cost. And, of course, as I mentioned earlier, there is that productivity component to incentivise the operators to want to improve productivity over time.
Sir, the second point that Ms Poa raised, I think it goes back to the earlier reply that I gave. You cannot run away from some judgement call if you go down a points system because who would be more deserving? It is really going to be very, very difficult to differentiate. If you use the number of children, for example, I have four children, but I think Ms Poa will agree I should not get additional subsidies or priority just because I have four children. So, there are many, many situations that you look at; it is very difficult to then say how many children as the only yardstick or as the only criterion. So, the way that we think about it is this: how do we help the families through different avenues – not just COE alone, because COE is really more for allocation of a scarce resource – but how do we help different families who may need the car not all the time, but at certain times of the day or certain times of the week.
So, one way is to use point-to-point service, and we are doing a review on that; a point-to-point review. I mentioned this yesterday as well. How do we enhance the services for commuters to meet evolving commuter needs? And it will include families that Ms Poa and others have highlighted, where there is a genuine need for point-to-point service and instead of just relying on car ownership alone. Some of them can own a car but some of them may not be able to own a car. Can we help them in other ways? Point-to-point service, car sharing, and I think it takes a whole-of-society approach, not just the Government because for many of these families that need help, sometimes they also receive some help from the community and from voluntary welfare organisations (VWOs). So, it is a whole-of-society effort; that we do our best to support these families.
Ms Lim, do you have a further clarification? Okay, Mr Leong Mun Wai.
Mr Speaker, I think we have gone through a lot; we covered a lot of ground. But as I hear the debate go on, I just felt that probably it is about balance. Policymaking is about balance. So, I would like to ask the Acting Minister two questions with regard to that.
I think the way the Government conducts policies today, a lot is profit-seeking and using the market model. So, I think, as the alternative parties, what we are bringing to the House is that we hear a lot of feedback about problems. So, the angle must be, besides using the market model completely, there must be more consideration for the social aspects of a lot of the policies. So, let me ask the Acting Minister two questions in relation to that.
One is, for example, the water price. We know from the statistics provided by the Government that most of the increase in the water demand comes from the big users – the water-intensive industries and all that. So, maybe the Government wants to make ourselves more competitive —
Mr Leong, you should just ask your clarification and not make another speech.
— make ourselves more competitive. So, we want to know whether if we alter the way the water is priced, the Leader of Opposition talked about having another category under 40 cubic metres. Is it possible to have another category, between 40 cubic metres and 80 cubic metres, so that we differentiate and we push the cost more to the big users? Because right now, you look at the water prices we are doing and whenever we need to increase our water supply, we need investments. And so, as a result, the burden of the investments comes back to the average Singaporeans. Do you agree with that? That is one point.
Second point about the COE, it is the same thing. Cars are a scarce resource. So, we have to allocate that. But if we use the market system, the Singaporeans will be squeezed out of the market very soon, the average Singaporean. So, as a result, do you agree that we ought to see how we allocate this scarce supply of cars, not just by the market price but by the Government coming in? Maybe one of the solutions, do you agree, is to adjust the allocation to, like what I said in my speech, those that go to Cat B, shrink it; increase the supply for Cat A and C drastically.
Currently, I think it is about 50/50, right? Maybe 70/30? Will that solve the problem? "Solve the problem" meaning, will that allow average Singaporeans a better chance of having a car, even going into the future?
Senior Minister of State Chee.
Mr Speaker, I first need to say that I reject the way that Mr Leong has characterised the way the Government operates. I think that is quite uncalled for. I just spent a good 40 to 45 minutes explaining our approach to helping Singaporeans cope with the rising cost of living and what we are doing through different ways in a fair, effective and sustainable manner. We can debate about different ideas. We can discuss different possibilities, like what the Leader of Opposition and I have done just now on water. That is okay, Sir. But I reject what Mr Leong has said, that the Government is profit-seeking.
Sir, if we look at public transport, just now Mr Giam mentioned, if we are indeed profit-seeking, the way to do it is to pass through all 22.6%, as recommended by the formula. Did we do that? No, we did not. We passed through less than one third and we absorbed the rest, because we understand that in this current environment, we do not want to add further stresses on Singaporean families. And this cost the Government $300 million to plug the delta, the 15.6%. And on top of that, every year we give $2 billion for public transport, $1 billion thereabouts for bus, $1 billion for MRT. Again, this is profit-seeking?
So, Sir, I respectfully ask Mr Leong to withdraw that comment as I think it is not fair and it is not the right way to describe the way the Government operates or to conduct this debate. Can I pause here to ask if the Member agrees to withdraw that comment first before I answer the rest of his questions.
Mr Leong.
Mr Speaker, Sir, I think one of the basic approaches adopted by the Government is still to make sure that public services are profitable. I will stand by that. So, if they want to ensure that the public services are profitable, then it is profit-seeking.
So, if there are certain industries like the bus services that you cannot make a profit yet, then it might be because that you are still trying out the model. Because this contracting is a new model, when compared to other things. But whereas in the established areas, like water and COE, you definitely have —
Mr Leong, actually all Senior Minister of State Chee is asking is: are you withdrawing? If you are not, then the short answer is no.
No, I am not withdrawing.
Yes, thank you.
Sir, since Mr Leong has refused to withdraw, I would have to put on record that we reject the way he has characterised the way the Government operates and then I can give many more examples. But in the interest of time, maybe just allow me to comment on one thing.
Sir, the bus contracting model that Mr Leong mentioned, I do not know if Mr Leong is aware that, at the moment, for bus services, LTA, as I mentioned earlier, provides $1 billion every year because it is loss-making. Almost all the bus services that are running on our roads today are not making profit. They are all losing money.
Why do we continue to run them? Because they meet the needs of our residents. Because they meet the connectivity, commuting needs of Singaporeans. So, even when the bus service is not making money, we know this is a public good. This is a public service. It is an essential service. We continue to run that service even though it is not making money. And then to make sure that we are able to run this on a sustained basis, the Government then provides the subsidies to the tune of $1 billion for bus and $1 billion for MRT. So, Sir, we are looking for financially and fiscally sustainable outcomes. It is different from profit-seeking.
Sir, the social aspect in policy formulation, I think it is very much top-of-mind for the Government. If you listen to different generations of Finance Ministers during Budget, there will always be one segment on the economy because we do need to grow the economy to earn a living, to create jobs. But there is always an important segment also on social policies. National Day Rally – the Prime Minister has always focused as well on different ways of improving our social policies – housing, education, healthcare.
So, again, Sir, I reject the way that Mr Leong has characterised the Government's way of working to say that we only care about profits and there is no social aspect in our policymaking. It is absolutely untrue.
Sir, I now turn to the point that Mr Leong mentioned about water, and I am not sure whether I heard him correctly. He said that we should have a different category from 40 cubic metres to 80 cubic metres. Sir, I explained earlier, and I think Mr Singh also mentioned in his speech, that, today, 96% of households consume below 40 cubic metres. So, I am a bit puzzled why Mr Leong is proposing that we should have a different category between 40 cubic metres to 80 cubic metres, catering to some of this 4% and then to provide subsidies for them.
I find it quite strange why he is proposing something like this. I thought the right thing to do, Sir, is to price the water correctly from the first drop, starting from the first drop. But we understand that there are different families with different needs, different financial circumstances and we want to then provide more help and support to the lower- and middle-income families. And the way to do this, the most effective way, in our view, is to then provide means-tested U-Save rebates that are fixed in a the quantity, so that if you consume more, actually beyond that, you pay. So, there is a strong element, strong incentive to encourage people to save water. I think that is the better way to do it and not to create a new category between 40 cubic metres to 80 cubic metres.
Mr Leong.
Mr Speaker, Sir, I hope the Prime Minister does not think that this is developing into a brawl. But we are just trying to clarify further. So, can I reply to the Acting Minister through you, that one, I did not say that the Government did not consider social factors at all. What I am saying is that, when we are debating here, maybe we are trying to push and say that, let us consider the social factors a bit more? So, as a result, I think the Acting Minister has also misunderstood me.
What I mean to say is that for water, for example, the water demand is increasing very fast but it is because of the big user. So, recently, when we announced the 18% increase in water price, if we have another category for the bigger user, then maybe the lowest 40 cubic metres do not need to have price increases. Push the price increase to the next category. So, is that possible or not?
Of course, it will affect the competitiveness of the water-intensive businesses in Singapore but it is unfair for Singaporeans, right? When the big users are the ones who are increasing the demand and we have to put a lot of investment into water supply and then the costs are borne by the smaller user because of the price increase.
Mr Speaker, I think first, we have to get our facts correct. The demand for water in Singapore is predominantly actually from households. The majority is actually not from businesses.
So, when we look at businesses, we charge them the full price of water from the first drop and we do not give them any U-Save rebates unlike households. So, that is the difference. Contrary to what Mr Leong seems to have understood, it is actually the other way round. We charge everyone the full price of water from the first drop and then we give means-tested subsidies through U-Save rebates to households, lower-income households getting more but for businesses, they do not get any U-Save rebates. What we do with them is to help them to improve their energy and water efficiency.
Mr Leong, if it is a clarification, I will allow it. Is it a further clarification? [Interruption.] Ms Hazel Poa.
Thank you, Mr Speaker. I like to seek a clarification from Senior Minister of State when he said that the bus services are making losses, can I clarify whether that takes into account advertising revenue from advertising on the bus surface, the panels behind the bus, in the bus, panels at the bus stop, at the bus interchanges, rent from kiosks at the bus stops, at the bus interchanges and so on?
Sir, the buses are running because they provide an essential service, they are not making money and we are providing subsidies to the tune of $1 billion every year. I do not know which advertising firm Ms Poa has in mind but if you think you can make $1 billion dollars in advertising revenue, please let me know.
Mr Leong, if it is a clarification, yes.
One more clarification for the Senior Minister of State. As far as I know from the statistics, currently the big users account for 55% of the demand, right? The households 45%, right? Is that statistic correct?
Sir, I am sorry if I mis-spoke and I got my facts wrong. I need to go back and double check this. But if the data is the other way round, I apologise for the factual error. But it does not change the point I was making and I hope Mr Leong can agree with me on that, that we charge businesses and households the true cost of water from the first drop and we do not provide U-Save rebates to the businesses. That part I can confirm and double confirm.
Mr Saktiandi Supaat.
Mr Speaker, Sir, I rise in support of the amendments proposed by Member Mr Liang Eng Hwa, as they reflect the existing global drivers and efforts so far as well as trade-offs. Mr Speaker, Sir, in Malay, please.
(In Malay): [Please refer to Vernacular Speech.] I am concerned about the rising cost of living that our people are experiencing. Therefore, the issue of cost of living has been a core priority in this House this year, and I, as well as other Members, have previously raised it, together with the impact of high interest rates.
It is evidently front-and-centre in the Government's policy making efforts with the announcement of the $1.1 billion Cost-of-Living Support Package last month, building on the Assurance Package, and other measures announced at Budget 2023. Singaporeans will be receiving at least $400 in cash and CDC vouchers, with lower income Singaporeans receiving up to $800 cash in December 2023. There will also be rebates to manage Service & Conservancy Charges (S&CC) and U-Save rebates.
Some of the inflationary pressures that Singaporeans are facing are also happening worldwide, due to the Russia-Ukraine war and bad harvests related to climate change, for example, driving up energy and food prices. Not to mention the risks of supply chain disruptions, higher interest rates in a longer environment and the possibility of an escalation of the situation in the Middle East.
Aside from specific government support through fiscal assistance, which have been very helpful to our people, many Singaporeans may not know that our government and financial agencies actually play a big part in shielding their wallets from some of these economic spillovers. The effectiveness of a strong SGD currency policy, for instance, as result of MAS tightening monetary policy five times in a row, including in two off-cycle moves last year, has enabled MAS to contain imported cost pressures, and some economists such as OCBC’s chief economist is of the view that this will be sustained for several quarters ahead. While inflation is still elevated, MAS' five successive monetary policy tightening moves since October 2021 have tempered the momentum of price increases. The effects of MAS' monetary policy tightening are still working through the economy and should dampen inflation even further.
I am also concerned and have asked many questions alongside other Members in the House about the increase in transport costs including high COE for motorcycles and cars. The Government recognises that some Singaporeans and the Malay-Muslim community rely on motorcycles for their livelihood, and there is a higher proportion of lower-income individuals among motorcycle owners than car owners. This is one of the reasons why the ARS Additional Registration Charges, road tax and Electronic Road Pricing (ERP) for motorcycles are lower than other types of vehicles. To protect against speculative bidding behaviour for Category D COEs, MOT introduced several measures in the last two years. These are very much welcomed. It includes raising the bid deposit for Category D Temporary COEs, or TCOEs, to $1,500; and reducing the validity period of COEs to one month.
The price of Category D COEs has dropped from over $13,000 in November 2022 and remains at around $11,000 in the recent bidding exercise. The Government has said it will continue to study ways to improve the COE system for Category D, including new ideas. Hence, I am waiting whether they will look at ways to improve this system.
(In English): Sir, some of the inflationary pressures that Singaporeans are facing are worldwide – I mentioned this in my Malay segment – due to the Russia-Ukraine war and bad harvests related to climate change, for example, driving up energy and food prices. I think many are not aware – I mentioned in my Malay segment about how MAS policy has helped to mitigate imported inflation.
According to a study by NUS, Singapore’s food prices are also much less volatile than global food prices. This in part is due again to our exchange rate policy accordingly and is helping us in terms of purchasing power in the world market, thereby, providing a greater buffer towards global food price shocks.
As cited by the NUS study, our various policies such as increased local production, diversification of food sources and stockpiling are all working to help insulate Singaporeans from externally driven cost of living pressures, albeit the cost of living pressures continued to be there because of global factors.
Mr Speaker, the Government has also rolled out a suite of policies to keep day-to-day costs down, such as HDB’s requirement for all coffee shops leased from HDB to offer budget meal options to diners by 2026. The issuance of CDC Vouchers to households is of special mention – I mentioned it in my Malay segment as well – these are complemented at the local level by individual constituencies’ grassroots efforts. I think Acting Minister Chee highlighted that in his speech as well as other Members as well.
I just want to share the experience at Toa Payoh East, at the local level, for example, I launched the Cost of Living Assistance Programme, called CLAP, sometime in the third quarter of 2022, a ground-up initiative working together with hawkers and donors and grassroots to assist lower- to lower-middle income households – we wanted to capture the lower-middle income households – in Toa Payoh East with their daily expenses.
Ground-up initiatives with the merchants and grassroots supported initiatives to assist residents who are affected by high cost of living especially groceries and essentials. I just want to highlight, it is a tripartite involvement – merchants, residents and Toa Payoh East Citizens’ Consultative Committees (CCC) – to help residents as much as possible and also to make sure that the hawkers actually do have business. This initiative also hopes to bring back some business opportunities to the heartland shops and convenience for residents. So, they get about $100 worth of CLAP vouchers, which can be used to offset their purchase for meals and essentials items at the participating hawkers and heartland merchants.
The aim is to target low- to middle- income residents, as I mentioned. I think we expect to help up to about 500 families from last September in 2022 when we first launched up to end of this year. So far, we have given out close to about 200 and has benefited merchants and hawkers at Lorong 7 and Lorong 8 Toa Payoh.
The purpose I am sharing this is to highlight that there are discretionary measures that advisers and MPs can do on top of the ComCare and welfare assistance that are available that the Government has provided to alleviate cost pressures which includes CDC Vouchers, GST rebates and transport vouchers.
I am wanting to highlight that the CDC Vouchers are not means-tested. It is the Government spending about $600 million, I think, if I am not mistaken – up to about $600 million so far and is not means-tested.
So, on top of that, we have these discretionary measures that, I think, all the advisers and MPs can undertake in their respective constituencies.
Against this global backdrop, Mr Speaker, the Government is also implementing tough decisions for longer-term economic policies and fiscal measures. Acting Minister Chee has highlighted extensively the impact of the increases in the GST and how they matter for Singapore – carbon tax and water prices, COE quotas, for example, with specific objectives. The main thing is it helps to ensure long-term fiscal sustainability and reduces burdening future generations of Singaporeans.
These are necessary to achieve other policy objectives beyond just keeping inflationary pressures for Singaporeans' day-to-day lives in check. It is essential that Singapore continues to address our medium- to long-term challenges head on even as we face inflationary challenges now. That is the Singaporean way, and I think Acting Minister Chee mentioned it, that has ensured Singapore’s survival, gelling a very long-term strategic perspective even as we face short-term challenges but with the welfare of Singaporeans taken care of and negative impact mitigated, especially for the more vulnerable groups.
These policies will invariably lead to price increases in the short term, but ensure fiscal sustainability and environmental sustainability measures are needed now and I think we need to address them now before things get worse in the medium to long term.
Sir, the current approach to ensure affordability for Singaporeans amid these price increases is more prudent as they also minimise the cost pressures on Singaporeans who are most feeling the pinch in terms of cost of living through measures, such as providing targeted assistance to lower-income groups, providing offsets and subsidies to help ease the burden on households and staggering the implementation of policy initiatives as well as increasing wages progressively for low-wage workers. All these are already mentioned by Members as well as Acting Minister Chee earlier.
One example I just want to highlight again, as what the Acting Minister has mentioned, is the recent announcement by the Public Transport Council to allow a 7% fare increase in 2023. This is one example reiterating again what the Acting Minister mentioned, one instance where the Government has calibrated the impact of cost of living pressures.
The Acting Minister for Transport has also explained the recent decisions and the Government's core consideration that fares remain affordable while the public transport system remains financially sustainable. That is quite important and he has shared this with the House last month as well.
I will not belabour these points. But what is key are actually the 10% reduction in the cost of monthly concession passes, implementation of a new discounted monthly pass for Workfare Transport Concession cardholders and the $50 Public Transport Vouchers for lower-income households. These further measures accompanying the fare increases demonstrate the Government's approach to targeted help in ameliorating cost of living pressures for the lower-income group.
In general, I am reassured in terms of public transport, that the Government has kept public transport fares affordable. Public transport is already heavily subsidised. The Government is actually spending quite extensively with the additional subsidies to lower the proportion of household income spent on public transport, which has fallen as well.
Before I go into my last segment and conclude, I just want to reiterate some feedback from residents, highlighting thanks in terms of efforts from MOT and LTA in providing those transport vouchers to residents. Many of the residents have come forward to seek help in terms of transport vouchers. I think that sort of additional help on that front has helped, especially with the recent changes in the monthly passes as well.
Another example I want to highlight before I end is the additional U-Save rebates announced last month that will serve to cushion the impact of increases in carbon tax and water price.
Mr Speaker, Sir, the carbon tax itself is something that the WP has also agreed on in this House, that there is a need for Singapore to implement for the sake of our planet and also for our country.
Over the next two years, the additional U-Save rebates will, on average, fully offset the increase in utility bills for 1- to 2-room HDB flats, about 80% for 3- to 4-room HDB flats, and about 65% for larger flats. This is another way that the Government is making sure that the cost of living pressures on the lower-income households are moderated even when we need to make the hard decisions of implementing such policies at this juncture.
Mr Speaker, the Government has taken active wide-ranging steps to cushion the impacts of inflationary pressures on ordinary Singaporeans and has helped reduce their vulnerability to price increases through various measures, through monetary policies, fiscal assistance and also at the grassroots and through discretionary measures that can be undertaken on top of ComCare and welfare assistance.
Ultimately, the global inflationary environment and pressing needs from Singapore society, such as an ageing population, mean that there are multiple fiscal demands that the Singapore Government needs to meet. As a society, we will all need to take on a fair share of these cost pressures where the Government will ensure that it is affordable for the average Singaporean while taking special targeted measures to provide more assistance for the lower-income groups who have heavier financial burdens.
Mr Speaker, Sir, it is my view that this approach is more prudent than deferring these real demands to future years, which would simply be kicking the can down the road where we do not know if the same or new inflationary pressures would be around. There is no guarantee that we may already have shifted into a new normal of higher prices. In this vein, there may not come a better time to implement some of these policies. Mr Speaker, I support the amended Motion.
Senior Minister of State Chee.
Thank you, Mr Speaker. Mr Speaker, I have checked and would like to confirm that if we look at the total water consumption in Singapore, 45% comes from the domestic sector and 55% is from the non-domestic sector. I apologise for my error earlier. Sir, for potable water, the split is 60% domestic and 40% non-domestic.
Mr Xie Yao Quan.
Mr Speaker, in Mandarin, please.
(In Mandarin): [Please refer to Vernacular Speech.] Official data shows that since July 2021, which is in the past 20 months, the price of eggs has gone up by almost 40%. Price of chilled chicken saw similar increases. Food and food ingredient prices have gone up by 11%. For F&B establishments, including hawker centres, coffee shops and restaurants, prices have gone up by 12.5%.
Many residents have told me that the extent and speed of cost-of-living price increases have become unbearable. Previously, you can buy a lot of things with $50 at the wet market, but now it does not buy you much.
As Members of Parliament, we feel keenly the impact of cost of living on Singaporeans in the past two years. Thus, today's debate is of great significance and precisely because of this, our debate should stick to the facts and analyse the factors behind the rise in cost of living objectively and accurately, and take a realistic approach to alleviate concerns of Singaporeans. This includes various considerations, trade-offs and compromise so as to avoid politicising this issue.
This is the responsibility that Members of Parliament and political leaders should take upon themselves. The first point I want to make is that GST should not be made the scapegoat of the increase in prices.
In the last two years, prices have gone up by more than 10% overall, but during this period, GST have gone up by one percentage point. A crucial point is that the Government has increased the subsidies for the lowest-income Singaporeans under the permanent GST Voucher scheme. This will fully offset the impact of GST increase on the 30% lowest-income Singaporeans. This means that the actual impact of GST increase on these Singaporeans is not two percentage points, but zero.
Even for middle-income Singaporeans, the actual impact of the GST increase is also much lower than one percentage point. Because the Government boldly launched the Assurance Package, the impact will only be felt five to 10 years later.
This means that the cost-of-living pressure that Singaporeans are experiencing now is due to other reasons, not GST. One key reason is the global market volatility and the rise in global prices. Singapore is a small country and we import many of our raw materials and goods, so we will be inevitably affected by fluctuations in global prices.
For example, global chicken feed price has increased in the past two years. So, we have experienced an increase in egg and chicken prices. Global oil and gas prices have also increased and directly affected our electricity price, MRT fare and prices of public services. As a small country, what can we do?
The Government has one major weapon, which is the Singapore dollar. Through strengthening the Singapore dollar exchange rate, we have managed to offset 2.5% of inflation.
I believe Singaporeans know that the strength of the Singapore dollar did not occur by chance. It is due to the Government's prudent management of the economy and finance. Individually, we can also take steps to cope. In fact, a lot of residents know that domestic prices are affected by the global market. Singaporeans can also take a prudent approach in spending.
When we talk about inflation, it is actually an aggregate of the price increases of all goods, but in this basket of goods, there are still cheaper choices available. For example, seafood. According to official data, average prices of red snapper and batang have indeed increased by 20% and we have seen this at the markets. But according to official data, the price of sea bass has remained stable during the same period. So, we can eat sea bass instead of red snapper and batang. Savvy saver are still able to save money.
Another important aspect is the increase in the prices of public services. The cost of public services is also affected by the global market and prices. For the increase in cost, the Government has chosen to increase prices to maintain high quality public services. This is the responsible way.
For Town Councils, although they are not Government departments, they also provide public services. Thus, the recent increase in Town Council S&CC charges also reflects these increases in cost. This is a responsible way to deal with cost increases. Besides the global market, another factor for the increase in the cost of living is our domestic wages. In particular, I would like to point out the increase in the wages of low-income Singaporeans.
Increasing the wages of low-income Singaporeans is the aim of the Government's Progressive Wage Model (PWM). This is an important policy. Because of PWM, between 2017 and 2022, the wages of low-income Singaporeans have increased by 2.9% annually. This is higher than the 1.8% annual wage increase of middle-income workers.
In the next five years, the Government will go one step further and aim to increase the wages of low-wage Singaporeans by up to 80%. This will benefit hundreds of thousands low-wage Singaporeans.
Sustaining this wage increase of low-income workers at a faster pace than middle-income workers so as to close the gap between the two is something that the Government has put a lot of effort into.
As a Jurong GRC Member of Parliament, many of my residents have benefited from the PWM. So, I strongly support this policy, but this policy also implies that the overall domestic wage will increase and ultimately businesses will have to increase prices. A crucial consideration is whether Singaporeans support the PWM and whether they are willing to pay a little more so that low-income workers can earn more.
This also applies to hawker food prices. Hawkers are self-employed persons, so they are not included in the PWM, but they also work hard to make a living. They also want to earn more. After all, other Singaporeans are enjoying wage increases.
I believe that in the past two years, hawker food prices have increased by 13% on average. This reflects the reality. Hawker food prices have increased not just because food and electricity prices have increased. I have a resident who runs a noodle stall. He recently increased his prices by $0.50. I asked him, "So, you have increased your prices." He said, "I have no choice." What I was hesitant to ask was, actually, "Others have increased prices and you are only increasing prices now?"
So, Singaporeans have to face the same question. Are we willing to pay a little more at hawker centres so that hawkers can earn a little more? Regardless whether they are low-income workers or self-employed persons, Government has another major initiative - Workfare. This provides direct payout to those Singaporeans who earn low income and it helps to supplement their income.
Through Workfare and PWM, on one hand, the Government directly supplements part of the wage increase of low-income Singaporeans; on the other hand, it guides businesses and consumers to take on part of the increase in cost through market.
This reflects the fundamental policy of the Government, that is, a small country will always face big challenges. When we are faced with challenges, the Government faces the problem squarely and launches responsible and sustainable policies as there is no free lunch in the world.
The Government will directly bear part of the cost, while the rest is shared with the people. In the past, we have faced similar challenges and the current issue of cost of living is no exception. In fact, many Singaporeans are aware of this. Many residents have asked me, "The Government is providing so much assistance. How can it be sustained?"
As long as the Government, people and business community continue to work closely together and contribute their part, I believe we can overcome the current challenge of cost of living.
I support the amended Motion by Mr Liang Eng Hwa.
Mr Speaker, I second the Motion as filed by the Leader of the Opposition, Mr Pritam Singh. The discussion on the cost of living crisis which we are facing today, is not complete without a review on the state of inflation in the country.
In its October Monetary Policy Statement, the MAS shared its expectations for Consumer Price Index (CPI)-All Items inflation to average around 5% in 2023, down from 6.1% the year before, and for the inflation rate to average between 3.0% to 4.0% in 2024. In recent months, we have seen inflation rates gradually slowing down over the course of the year.
The decline in overall inflation rates is perhaps cold comfort for many Singaporeans, as prices are ultimately continuing to rise even amid the high prices we are seeing today. And that this is still significantly higher than what we have been used to in Singapore, double that of the 1% to 2% average inflation rates in the last four decades.
Even if inflation rates return to lower levels, prices are now permanently higher. With crude prices rising meaningfully since the third quarter, potentially even hitting $150 as the World Bank has warned, food commodities prices threatening to climb even higher if we witness a strong El Niño, and the second order effects on inflation potentially coming through, inflationary pressures could well pick up.
Interestingly, the MAS expects core inflation to be lower than headline inflation at 2.5% to 3.5% for the year as a whole. Unlike many countries where core inflation is defined as that excluding food and energy costs, Singapore excludes accommodation and private road transport costs, which according to the MAS, and I quote, “are excluded as they tend to be significantly influenced by supply-side administrative policies and are volatile.”
While I accept that the MAS Core Inflation measure is used for monetary policy decisions, a person without knowledge of the technicalities will nonetheless find reports of a return to price stability as being different compared to their lived experience. After all, the CPI is meant to be a fixed basket of goods and services commonly consumed by resident households. And looking at the relative weight of accommodation cost as part of Singapore's CPI basket, it comes in at 21.97% – the highest single component.
Moreover, to say that accommodation costs have no direct impact on the monthly cash expenditure of most households in Singapore as they already own their homes, does not take away the fact that especially in a country like ours, which prioritises home ownership. The cost of purchasing a home is a big concern, as it is going to be the single largest expenditure item for the vast majority of households. It is not just any expenditure item, but one that relates to our basic need of providing for shelter and our livelihoods.
As such, my speech today will primarily touch on housing, and as rightly pointed out by the MAS, is significantly influenced by supply-side administrative policies. Hence, we need to take a closer look at our supply-side policies to ensure prices are well managed.
Before I touch on housing, back to the October Monetary Policy Statement. The MAS took pains to reiterate that excluding the impact of the increase in GST rates both in 2023 and 2024, inflation rates would be lower. The question then is, why add fuel to fire?
Layering on a higher GST rate on top of the inflationary environment we see today with the rising prices of many essential goods and services, is only going to make it even more difficult for Singaporeans to cope with the mounting cost of living pressures. Should we not be insulating our people instead of hitting them with more? Even the MAS Chief Mr Ravi Menon has acknowledged the 1% dish point increase in GST, has an immediate impact on inflation.
This is especially the case where I shared in my speech in Parliament just last month: the Government's fiscal position is shaping out to be much better than projected, with operating revenues now $8.2 billion higher in the first half of the financial year.
To reiterate, in Budget 2022, Deputy Prime Minister Lawrence Wong shared that the GST hike will bring in about 0.7% of GDP in revenues annually, or about $3.5 billion when the full hike is in place in 2024. Even with a one-percentage point increase in the GST thus far, the Government expects GST revenues in FY2023 to be $2.9 billion higher than FY2022.
In response to my speech, Senior Minister of State Chee Hong Tat repeated the same response as that shared by Deputy Prime Minister Lawrence Wong in the Budget 2023 round-up speech, where according to them both, “Deferring the GST increase will only store up more problems for the future, leaving us with less resources to take care of our growing fiscal needs and we cannot count on short-term upsides to fund structural needs.” Again, I listen very carefully to what Senior Minister of State Chee has said earlier, but the question here remains relevant. And that is, is deferring the GST hike in 2024, even for one year, when we have already achieved the revenue increase which the GST hike was meant to bring, going to store up more problems for the future?
Returning to the subject of my speech today, which is on housing costs. Based on the latest third quarter 2023 data, HDB resale prices continued its ascent, up about 1.3% from the last quarter, with the increase higher than the 1.2% quarter-on-quarter increase initially estimated for the quarter. This is despite additional cooling measures introduced more than a year ago in September 2022 involving tighter housing loan criteria and a new wait-out period of 15 months for current and former owners of private residential property to buy a non-subsidised HDB resale flat.
Compared to a year ago, public housing prices are now 6% higher versus private housing prices at about 4% higher. In each year since 2020, public housing price increases have outpaced that of the private residential market. And cumulatively, we have seen resale HDB prices up by 36%, compared to private residential at 28% since the start of 2020.
Moreover, it is not like what a Business Times columnist puts it, where he calls on Singaporeans to simply "stay cool and do not go overboard chasing after million-dollar HDB flats". While one may argue that the HDB resale market does not reflect the affordability of new BTO flats, ultimately, this will feed directly into the formula for pricing new BTO flats, as Minister Desmond Lee shared that, and I quote, "When pricing new flats, HDB first establishes their market value by considering the prices of comparable resale flats nearby as well as the individual attributes of the flats, and prevailing market conditions."
Looking at the residential rental market, Minister Desmond Lee is hopeful that in the coming quarters, rental pressures are expected to further ease, as a significant number of residential units are completed, as shared in response to a PQ in September where Member Mr Henry Kwek asked, what more can the Ministry do to moderate or reverse escalating rental cost to help tenants manage their cost of living.
I agree with the Member's call and have, in March this year, also called on the Government to support Singaporeans intending to rent a house in the open market and to consider mechanisms to moderate rents in the housing market.
But while rental growth rates have moderated, compared to a year ago, private residential rents are up by 19%, well above overall inflation rates and up by close to 59% over the last three years. While the HDB does not publish a rental index, a comparison of median rentals across HDB towns paints a similar uncomfortable picture. Over the last three years, median rents for a 4-room HDB flat have risen by roughly 35% to 78%. Median rentals for a 4-room HDB flat in Sengkang, for example, is now at $3,200 a month compared to less than $2,000 three years ago.
While we may say that as a country with close to 90% home ownership rate, those who need to rent form a minority. Soaring rents impact young Singaporeans who have not been able to purchase a flat but need their own space and households who may be particularly vulnerable given their tight financial circumstances and yet do not qualify for a public rental flat as they may be earning a household income of more than $1,500 a month, for example.
I am cognisant that the HDB website has recently been updated to remove references to any income figure and that HDB takes a needs-based approach and reviews all requests for public rental holistically. The ability to afford other housing options, such as renting from the open market or purchasing a flat remains debatable, in my view. This is especially if households are currently renting in the open market, and cannot afford the high resale prices today. Even if some can eventually secure a BTO flat, they would need a place to call home in the interim.
Just last month, there were two separate residents who lamented to me that their landlord is raising their rent to beyond their gross household income. In one case, his rent is going up from $1,500 to $2,500 a month, beyond his gross income of $2,200 a month; while in another case, his rent is going up from $3,200 to $4,200 a month and he cannot simply downgrade to a smaller flat due to his household size of eight. I have in January and March 2023, called for support measures for households in need and these cases are just a small subset of many Singaporeans who face similar predicaments.
Having described the challenges we are facing in the public housing market, I recognise that the Government agrees that there are issues relating to availability and affordability today. Where I believe our views differ however, is on the sufficiency of the current measures that have been taken.
On housing availability, the Government has reiterated its position that it has significantly increased the supply of BTO flats and will launch up to 100,000 new flats in total from 2021 to 2025. Similarly, I have over the course of a number of speeches, shared that this may not be sufficient.
Even if the HDB launches 100,000 flats in total from 2021 to 2025, this implies that BTO supply falls 20% from current levels to about 18,400 flats in 2024 and 2025. Moreover, while the average of 20,000 BTO flats between 2021 to 2025 is an increase compared to average of 17,000 flats between 2016 and 2020, this is still 13% below the average of 23,000 flats in 2011 to 2015, during the time when Mr Khaw Boon Wan was the Ministry of National Development (MND) Minister and sought to address the backlog in HDB flats.
Moreover, while BTO application rates have in 2023 declined to about three times thus far, it remains unclear if the 1.6 times application rate seen in the October BTO exercise is sustainable, or just a result of the first-time introduction of certain specific rules.
On housing affordability in Budget 2023, the Government has increased the CPF Housing Grant for first-time families to enhance housing affordability in the resale market. As what a head of research at one of the real estate agencies pointed out then, such beneficial effects could be short-lived as it could result in further price inflation, as these could be priced in by the market.
In addition, with the new BTO classification system from second half 2024, Plus flats will be priced with more subsidies, on top of the subsidies already provided for standard flats today. Again, while the intention is to improve affordability, with the new classification applying only to new BTO launches and not to the existing stock of more than a million HDB units already in the market, the measures could potentially add further upside pressure to resale HDB prices in some of these locations. As reported by CNA last month, prices for flats located near MRT stations or town centres are now higher by up to $10,000 compared to before, according to industry insiders.
Moreover, there has not been any concrete policy proposals on addressing the needs of those needing to rent in the open market.
In response to my Parliamentary Question (PQ) in January 2023, Minister Desmond Lee shared that, "Providing subsidies or grants for renting flats in the open market is likely to induce demand and drive up market rents, which would compound rather than help solve matters. As such, we have no plans to provide such rental subsidies". Is this not the exact approach that the Government is taking, when providing targeted subsidies to enhance affordability in the resale market? Why the double standards? Especially when it comes to vulnerable families who have not been able to obtain a public rental flat?
What then should be done to address the issues of availability and affordability today? To put simply, if the fundamental demand-supply imbalance we are seeing today is not sufficiently addressed, the market is simply doing what it is supposed to do. With prices and rents continuing to appreciate, while many Singaporeans are not able to address their housing needs. If the idea is not to crimp the real demand side of the equation since access to appropriate housing and shelter is a basic need for all, addressing these problems would then necessarily require adjustments to the supply side of the equation, for the market to find a more appropriate equilibrium point.
In other words, we need to increase the supply of HDB flats across both the for-purchase market and also the neglected for-rent market.
Rather than reduce the supply of BTO flats by close to 20% from 2024 onwards, we ought to ensure that we keep up with the current pace of launches, and this is only just about in line with the average of 23,000 flats from 2011 to 2015.
As I have shared in my MND Committee of Supply speech, a local academic put it very succinctly, and I quote, “Having excess flats is actually a feature and not a bug. It just means that if some Singaporean want to get married and wants a new house straight away, there is a house available!” And he goes on further to say, “To me, BTO is the real culprit behind our uncontrolled fire”.
Moreover, a lot of the demand from first time home buyers in the resale market today is also a function of the long wait times for a new BTO flat. To take it one step further from ensuring adequate supply, we ought to also ensure that we strive to continue reducing the long waiting times for a BTO flat and build a larger percentage of flats ahead of demand, as I have shared in my MND Committee of Supply speeches over the years.
After all, if we can build industrial facilities ahead of demand, can we not also build residential homes ahead of demand and have a fundamental re-think of the BTO system? I do appreciate Minister Desmond Lee's assurance that the HDB is planning to launch more Shorter Waiting Time flats, of around 2,000 to 3,000 flats per year by 2025. However, this is essentially at similar levels to the number of such flats launched in the last five years, ranging from about 1,096 in 2018 to 2,850 in 2020.
In the rental market, it is alarming that while there continues to be a very limited stock of rental flats today, the pace of construction appears to be slowing drastically compared to before. As at FY2022, there were 63,681 rental flats under management, a net increase of about 541 flats in the five years since FY2018. That appears to be a noticeable slowdown compared to the average net increase of 1,640 units per year between 2011 and 2020.
The pace of development of rental flats is expected to slow down even further, where there are only 900 public rental flats currently under construction and will be completed in the next five years. In other words, just about 180 flats per year. Why are we constructing new rental flats at a pace which is a mere 10% of that in the past decade?
To minimise the agonising wait for an allocation of a rental flat and to alleviate the worries of many Singaporeans who have not been able to access a rental flat, it is imperative that we do not neglect the housing needs of vulnerable Singaporeans in our pursuit of home ownership as the only acceptable housing model for Singapore. And it is important for us to resume the pace of rental flat construction, to be at least on par with the net increase between 2011 and 2020.
While the supply side solutions I have proposed to address the current predicament are not new per se, and various WP MPs, including myself, have called for this during the Housing Motion debate and MND Committee of Supply debates in recent years, what is worth highlighting is that demand appears to be much higher than what was previously expected; or at least what I had previously expected.
It appears that Singapore's population grew at 5% to 5.92 million as of June 2023, the fastest growth rate since 2008. This could partly explain the tightness we are seeing in the housing market today. And while I am not privy to the Government's desired population growth rate, if such growth rates persist, then we could have an even bigger problem down the line with housing supply set to taper off from next year.
Coupled with the steady decline in average household sizes, it now appears that elevated levels of housing demand are likely to be more permanent than transient, and we need to better prepare our housing market for this reality.
Finally, as an adjacent point, even if we have successfully adjusted our policies to address the current cost of living crisis, addressing the issue of soaring public housing prices today does bring us to the next logical question – what will happen when we reset prices downwards?
The lease decay issue continues to be the elephant in the room, and more than five years since the term "VERS" entered our lexicon in Prime Minister Lee's National Day Rally speech in 2018, many unanswered questions remain.
Even as we debate the issue of soaring housing prices today, we cannot be silent on the eventuality of the value of HDB flats reaching zero at the end of the 99-year lease, as this will simply mean that the higher the rise in prices today, the harder the fall eventually. In Mandarin please, Mr Speaker.
(In Mandarin): [Please refer to Vernacular Speech.] Although the inflation rate has eased in the recent months, prices remain high and continued to be on the rise for many Singaporeans, and the current inflation rate is still much higher than what we were used to.
I would like to reiterate that the Government's fiscal situation is currently much better than expected. In this cost-of-living crisis, when we have already achieved the revenue growth expected from the GST hike, will delaying the GST hike until 2024, even only for a year, bring more problems for the future as the Government has said?
Regarding public housing, the latest data shows that as of June 2023, Singapore's population has grown by 5% to reach 5.92 million. This is the fastest growth rate since 2008. Last year, the number of registered marriages also reached an all-time high in our country's history. If the population growth rate continues, we may face even bigger problems as public housing supply will decrease by nearly 20% from 2024.
To effectively address the housing problem, we need to adjust the housing supply, so that the market can find a more suitable equilibrium. In other words, we need to increase the supply in the BTO market, as well as the rental market which has been overlooked.
Mr Speaker, I hope the Government will seriously consider the points that we have raised to alleviate the cost-of-living pressure for Singaporeans.
Ms Yeo Wan Ling.
Mr Speaker, we have just come out of a three-year global pandemic and it was not too long ago, that many parts of the world were still completely shut in, logistics lines cut off, and our roads, malls, offices empty. We are now rebuilding our communities, our businesses and our trade links. This is a mammoth task made even more complicated with the ongoing wars.
As we traverse the new world in the new normal, and as we pick up pieces – broken families, familiar places now gone, groups dispersed – we find ourselves in the middle of a hurricane of cost increases and resource shortages. From petrol, electricity and water, to bus rides, cai png and kopi – indeed, the global cost increases are felt at very local, very personal and very real everyday ways.
In Punggol, a town of young families, many with upwardly aspirations, my residents have shared with me their concerns over food prices, healthcare costs, utilities and tuition enrichment classes for their children and, of course, the cost of owning a car and property in Singapore. They have expressed their appreciation for GST Vouchers, CDC Vouchers, U-Save Vouchers, Transport Vouchers, bursaries and top-ups that they have received over the years to help with cost pressures.
For some residents who have fallen on tough times post-COVID-19, perhaps from being retrenched, a business gone south or having fallen gravely ill, help is never too far away with SSO, CDCs, Medical Social Workers.
For those who have somehow fallen through the cracks – a single parent, a caregiver wishing to return to work, an undiagnosed special needs adult, our local community welfare teams provide weekly ration packs, monthly essential items, care vouchers and pro-bono services, like legal clinics, respite care and counselling sessions.
Our Town Council, too, has also formalised a welfare committee assisting residents who have fallen behind on their S&CC fees or needing simple repairs around their homes. Support, of all shapes and sizes, are readily available and always at hand. And yet, in Punggol, I have observed that there are more who are stepping up to support the community instead.
Indeed, when the going gets tough, the tough gets going! Complementing national level policies, micro-spheres of influence make long-term, impactful differences on the ground. Our micro-spheres of merchants, small businesses, religious organisations, volunteer groups and charities have created a sustainable and wide web of safety nets for our residents.
I am touched that our temples, themselves reeling from low temple donations during COVID-19, now provide weekly rations to my welfare team, packed full of nutritious goodies to be distributed to our residents. Our temples, churches and mosques give free Maths and Language tuition for our residents, and they doubled their classes post-COVID-19 when demand surged.
A moral welfare society is now building a free traditional chinese medicine (TCM) clinic to complement primary care in Punggol. All residents across all households and age groups are welcome. Many volunteers at the tuition and TCM centres are retired educators and healthcare professionals, and I appreciate how Singaporeans stepping up to support their communities.
Our Punggol Merchants' Association sprung into action and introduced, with the help of our residents, $3 budget meals at all Punggol Shore food court stalls. One food court operator took it further and partnered with the National Taxi Association with the introduction of a free kopi programme card to address the livelihood crunch that our drivers face. They have since extended this programme islandewide. Such budget meals and kopi programmes are popular and welcomed, and I understand that the MND has introduced budget meals at all HDB-owned coffeeshops. Can we also consider getting privately-owned coffeeshops to also offer budget meals, perhaps through their Merchant Associations?
With all these examples, I do believe in our businesses and community ecosystems – to do right for themselves and for our community – in the face of challenges and pressures, finding the right balance between costs of living and costs of business. Perhaps, instead of looking at this as a tug of war, let us support and help our businesses, our SMEs, our towkays do something that they do best in, and that is selling their goods and services well, and creating good jobs, future-ready good jobs.
The Labour Movement supports our companies with the upskilling of their workers and the redesign of jobs, so that more pockets of workers – such as caregivers, women returners – can partake in the workforce, and alleviate income pressures at home.
An example of such a programme is the C U Back at Work, or CUB, Programme that the NTUC Woman and Family Unit has piloted to help mothers and family caregivers to return to the workplace confidently. Flexible Work Arrangements (FWAs) is key to the program, and companies redesign work hours or locations around the time availability of workers.
Instead of price cuts and the passing on of costs to just another stakeholder upstream or downstream, FWAs can solve financial stresses for Singaporean families by adding an extra channel of income and help companies with resources and productivity.
Hence, Mr Speaker, let us help our Singapore businesses do better in what they have set out to do. I call on our Government to reduce business costs by simplifying work and Government compliance processes for our businesses, and to support our companies in job redesign and the upskilling of workers.
Mr Speaker, true character is shown in times of adversity. And indeed, in the face of global price surges and its impact on everyday life of Singaporeans, I have seen the mettle in our Singaporean businesses, I have felt the kindness in our communities and I have heard the steely timbre in our people's voices.
As the dust settles, let us continue to be united stakeholders in building our Singapore community, economy and lives with kindness and resolve, even when we have global challenges looms ahead. Mr Speaker, I support the amended Motion proposed by hon Member Mr Liang Eng Hwa.
Senior Minister of State Sim Ann.
Mr Speaker, thank you for letting me join the debate. Acting Minister Chee had earlier shared in detail on how we tackle rising costs – managing the Singapore dollar to contain imported inflation, ensuring our economy remains competitive to create good jobs and sustain real income growth, and providing support packages targeted especially for vulnerable groups.
I wish to respond to some specific points raised by Members on topics including housing affordability, cooked food prices and profiteering.
First, on housing affordability. Members would recall we have had an extensive debate in this Chamber in February on housing affordability and even more recently, there was a major announcement on upcoming changes to the BTO classification framework.
Before I respond to points made by Members, including Mr Louis Chua and Mr Leong Mun Wai, please allow me to set out the Government's overall approach towards maintaining stability in the housing market.
As economic conditions improve and wages rise in Singapore over the long term, we expect to see this reflected in a gradual rise in housing values and prices. Sudden shocks in either the public or private housing markets will cause serious problems and even hardship for Singaporeans, and this is why the Government actively uses policy levers to moderate price increases.
What do these levers comprise?
First, careful land use planning, coupled with a land recycling strategy, to ensure a steady supply of both public and private housing, to meet Singaporeans' needs.
Second, pricing BTOs, which by the way, in response to the point made about the five "C"s, these BTOs have become more and more similar to condominiums, in terms of build quality and aesthetics. Pricing these BTOs with a view to affordability, not cost recovery.
Third, demand-side levers for public housing such as grants and priority schemes for various categories of buyers.
Fourth, maintaining controls on home loan financing, whether through CPF or cash to encourage prudence on the part of home buyers and moderate price increases in the HDB resale and private property markets.
And fifth, additional measures such as ABSD to cool the overall housing market where necessary.
Recent housing price movements have been due to specific imbalances which the Government has identified. The first imbalance: our building programme fell behind in the last three years due to COVID and we are catching up.
To date, HDB has completed close to 75% of the projects delayed by the pandemic and should complete the rest of the delayed flats by early 2025. And we are committed to launch up to 100,000 new flats between 2021 and 2025.
The resumption of delivery of private housing will also, over time, ease the crunch in private housing and moderate rentals and home prices.
The second imbalance. HDB resale prices have risen significantly in recent years. This is due to buyers turning to resale when BTO construction was affected by COVID-related delays and shifts in social norms prompted by the experience of the pandemic, contributing to overall increase in housing demand. The catch-up in BTO supply will help moderate demand for resale units as people move into the homes they have booked.
We have implemented two rounds of cooling measures in December 2021 and September 2022. Coupled with the broader economic climate and mortgage interest rate increases, these have moderated property prices.
The prices of private residential properties increased by 0.8% in 3Q2023, lower than the quarterly average of 2.1% in 2022. Similarly, prices of HDB resale flats increased by 1.3% in 3Q2023, a figure that I believe Mr Louis Chua also quoted just now. And this is lower than the quarterly average of 2.5% in 2022.
The third imbalance. This is the fact that mature estate BTOs had presented a specific set of concerns. The price of mature estate BTOs drove much of the ground concern about BTO prices. So, when people talked about BTO prices being a concern, they were mostly talking about the BTO prices that they saw in the mature estates.
The issue we faced was how to price mature estate BTOs because these are very sought after so that they do not rise out of reach of most buyers and also not in a way that induces its own demand, which is why we announced the introduction of a new housing framework, comprising a new classification of "Standard", "Plus" and "Prime" flats, to take effect from the second half of 2024 onwards.
The new framework seeks to ensure homeownership remains affordable, including in choice areas, by providing additional subsidies to these flats, but also tighter restrictions, so that they are affordable even upon resale.
This also helps to keep our system of subsidies fair, while keeping to market principles. This means that we can also maintain a good social mix, even in good locations, because housing will be accessible to a wider range of Singaporeans.
Based on our ground engagements, Singaporeans are generally aware of and support the new housing framework and its objectives. This will help implementation go more smoothly next year.
So, measures are in place for each of the specific imbalances causing price increases in BTO, resale and the private housing markets.
Despite having to tackle these imbalances, we have broadly maintained measures of public housing affordability. In 2022, eight in 10 first time home buyers of BTO and resale flats had a Mortgage Servicing Ratio (MSR) of 25% or less upon key collection. This meant that they could finance their monthly instalment with CPF, with little to no cash outlay.
The Government will continue to monitor closely and adjust policies whenever necessary. And I am glad that Mr Louis Chua acknowledges our housing moves. However, he seems to think that we have not done enough. I noticed that Mr Louis Chua had co-authored a piece in January this year, saying housing in Singapore is affordable. Perhaps, he no longer thinks so. But I am glad that he agrees that the fundamental issue with housing affordability is one of supply, not policy.
Supply was indeed disrupted due to COVID. But we are catching up with the backlog.
Mr Louis Chua seems to think we should build more. In fact, HDB is already doing all it can on the supply side. We have also activated more levers on the demand side, for instance, by prioritising BTO flats for young married couples.
Through catching up on supply and managing demand, we are stabilising the housing market and there are signs that this is happening.
Launching 100,000 flats from 2021 to 2025 which I mentioned previously means a commitment of 20,000 flats per year. And prior to 2019, HDB launched about 16,000 to 17,000 new flats per year, a figure that Mr Louis Chua had also noted.
But at that time, the WP thought that was too many and said so. Now, we have 20,000 flats per year and it seems the WP thinks it is too few. So, I have to ask what figure does the WP propose? And should your higher number be adopted and if the market comes down due to over-supply, then, what will your party be saying then?
I notice that Mr Louis Chua appeared to express some puzzlement about where all this demand for housing is coming from and he seems to want to link this to population increase. In fact, Mr Louis Chua should know because we have brought this up, we have mentioned this during the debate on the housing Motion in February this year. We have been building HDB flats faster than the HDB population growth.
And, in fact, the average number of persons constituting each HDB household has been going down. This is the decrease in household size that Mr Louis Chua has also noted.
And what is the cause of this reduction in household size? One factor, and I think this is a long-term one, has to do with the fact that we have heard the housing aspirations of singles and we have, over the years, progressively provided more housing options for the singles so that there are more housing types that they can buy, be it on the resale or the BTO market. And, in fact, we have further open this up with the new BTO classification framework that was announced.
Given rising rates of singlehood, even if the population were to remain completely static, demand for housing is going to increase over time because the reduction of household sizes is set to continue. This is the reason why I seek Mr Louis Chua and the WP support for all our levers on both the demand as well as on the supply side. Please support us in having a robust recycling strategy for our land in addition to having careful land planning.
Let me now turn to some points that Mr Leong Mun Wai has repeated. These are familiar points because he has also raised them during the debate in February.
He talked about the PSP's proposal of an "Affordable Housing Scheme". And as far as I can make out, the affordable housing scheme tries to do a few things. It seeks to achieve dramatically lower BTO prices by leaving out land cost at the point of first purchase, while seeking to assure existing homeowners that their home values will not be destroyed via a crash in the resale market and avoiding being seen as raiding the Reserves. These are the three aims.
However, the first aim is simply incompatible with the second and the third aims, which is why the proposal was met with considerable scepticism, from Members of this House as well as the public.
More importantly, the affordable housing scheme does not address the specific imbalances in the housing market that the Government has already responded to and identified. For example, dramatically lowering BTO prices is likely to trigger even more demand, especially in the very popular prime areas, instead of moderating demand. On the other hand, the Plus/Prime model which we have announced will address this concern.
I now turn to Mr Leong Mun Wai's mention of his Millennial Apartments scheme and I would also like to address some points that Mr Louis Chua has made about addressing the rental market in flats.
I say this to Mr Leong Mun Wai and Mr Louis Chua. Let us listen to what younger Singaporeans want. MND and HDB have been engaging Singaporeans at large but also younger home buyers or prospective home buyers. And most of the younger Singaporeans we have engaged indicated a preference to own their own homes; own rather than rent.
So, we are not closed to new ideas. We have, indeed, been hearing inputs from Singaporeans about alternative typologies of housing but we also have to recognise that the very strong desire for home ownership is present within Singaporeans and we will have to prioritise building for home ownership, not so much building for rent, especially if we are talking about people of middle-income. But we will, first, make sure that there are still public rental options for those who are unable to attain the goal of home ownership.
Also, we are ramping up supply for the Parenthood Provisional Housing Scheme (PPHS). We will have close to 2,000 PPHS flats at the end of this year and we seek to double this to 4,000 by 2025.
In terms of how the rents are moving in response to the various measures that have been undertaken, I would like to share that private and public housing rents are showing signs of stabilising.
In the second quarter of 2023, the increase in private and public housing rents moderated to 2.8% and 3.0% respectively, as compared to 7.2% and 4.4% in the previous quarter and we expect this to further ease as more homes are completed and become ready for their owners to move into.
Allow me to move onto concerns raised by several Members, including Mr Leong Mun Wai, Ms He Ting Ru, Ms Tin Pei Ling, Ms Yeo Wan Ling and Mr Xie Yao Quan on food, especially cooked food.
We had proactively launched the Budget Meal initiative in 2023 to increase the availability of affordable food options in HDB estates, especially for residents who need them.
These budget meal options are typically lunch or dinner meal options that are priced affordably and are comparable to meals sold at lower price points at nearby eateries, including HDB coffee shops or hawker centres.
We have observed that rental coffeeshops leased under the Price-Quality Method (PQM) tenders typically provide budget food options with prices at around $3 to $3.50, across different estates. I should add at this point that operator proposals for PQM tenders that include healthier food options are already given more points and more favourably considered under the quality criteria. So, I want to thank Ms He Ting Ru for supporting this idea. We are already doing it.
Currently, some 114 HDB rental eating houses offer budget meals and drinks. And by 2026, budget meals will be offered at all 374 HDB rental coffeeshops. Members of public can use the BudgetMealGoWhere site to find out what budget meals are offered at HDB coffeeshops near them. HDB also puts up decals at participating coffeeshops to help residents identify the participating stalls more easily.
However, while we help residents with their cost of food, we are also mindful that rising costs affect everyone, including coffeeshop operators and stallholders.
To ease the transition for them, HDB has also offered a rental discount of 5% off the market valuation-based renewal rents for a period of one year from the time of the tenancy being renewed, subject to verification that the new budget meals and drinks have been implemented.
In the spirit of partnering Singaporeans under Forward Singapore, we soft-launched an effort last month to crowdsource the public's recommendations and verification of budget meals in coffee shops across the island.
Using the CrowdTaskSG portal, the public can be part of this nation-wide pilot campaign called the Great Budget Meal Hunt by submitting information on affordable meals they would recommend to others or by verifying the details of a budget meal listed on the BudgetMealGoWhere site. Over the past week and a half, we have received 245 recommendations of affordable meals and 319 verifications across 91 coffee shops. We welcome Singaporeans to contribute actively to this initiative.
While the current budget meal initiative only applies to coffee shops rented out by HDB, there are also sold eating houses that are privately owned. HDB is studying regulatory options to require budget meals to be provided in these sold eating houses. This includes making the provision of budget meals a condition for the renewal of use of the outdoor refreshment areas – an idea that Mr Murali Pillai had raised previously.
We will continue to work with coffee shop operators to find sustainable ways to offer affordable food options to residents.
Some Members have also raised their concerns that businesses may take advantage of the inflationary environment to raise prices exorbitantly.
The Government takes a strong stance against profiteering and will not hesitate to take action if there is a case to be made. To date, the Committee Against Profiteering (CAP), which I note Ms Hazel Poa also sits in, has received over 350 feedback submissions, of which 32 cases have been found to involve GST misrepresentation and which have been resolved.
If Mr Leong has concerns about GST misrepresentation, in other words, a business unjustifiably raising prices by attributing it to GST increase, he can make a submission too to the CAP.
However, there is also broad recognition also that many businesses are facing rising costs, as Mr Mark Lee has pointed out, including the cost of utilities, manpower, rental and raw materials, and some may need to raise prices in order to remain viable. These could include our hawkers and SMEs.
The best safeguard against profiteering is healthy competition. We have a robust system in place to remove impediments to competition and encourage a diversified supply chain, which help to ensure that businesses compete fairly and that consumers have sufficient choices.
The Government keeps a close watch on the prices of essential goods and services, especially during this challenging period, and will not hesitate to investigate anti-competitive behaviour. Should a member of the public come across such egregious cases, they can report this to the Competition and Consumer Commission of Singapore (CCCS) and the Consumers Association of Singapore (CASE).
If Ms Hazel Poa, as she said in her speech, felt that the scope of the CAP that she sits on is not sufficient for possible upstream cases of price rises to be investigated, I think CCCS would be glad to hear from her with regards to specific details and investigate them.
To further help Singaporeans make better purchase decisions on essentials, CASE has developed an app Price Kaki to compare the prices of items sold at supermarkets. To address potential concerns about shrinkflation, CASE has introduced a unit pricing feature this year on Price Kaki to help consumers more easily compare the prices of products with different package sizes and across different brands.
Specifically, on business rentals, Ms Hazel Poa had suggested releasing guidelines on fair rental prices.
The Parliament has passed a Bill mandating that tenants and landlords of qualifying retail premises comply with the leasing principles set out in the Code of Conduct for Leasing of Retail Premises in Singapore. This is to ensure industry-wide consistency in leasing principles and practices to provide certainty to landlords and tenants and set out a dispute resolution process that is affordable and expedient.
The Act will take effect in early February 2024 as sufficient time has to be given for the industry to transition to mandatory compliance. The code will be reviewed and updated as necessary, based on feedback from industry players.
Let me now turn to some points on supporting persons with disabilities and caregiving that Mr Gerald Giam had raised.
We empathise with the challenges of those who need additional support, such as caregivers and persons with disabilities. I beg your pardon, I think it was Mr Dennis Tan who raised these points.
To Mr Dennis Tan's points, I would like to clarify that financial support schemes for caregivers such as the Home Caregiving Grant or the Migrant Domestic Worker Levy Concession do not just apply to caregivers of disabled seniors but persons with disabilities too, including care recipients with autism spectrum disorder or intellectual disability.
Similarly, all Singapore residents have basic health insurance coverage for life, regardless of pre-existing health conditions. MSF has also recently increased funding to adult disability homes and day activity centres in 2021. Mr Speaker, in Mandarin, please.
(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, cost of living is an issue that touches the lives of all. We have experienced high inflation for the last few years due to the dislocations in the global economy caused by the pandemic, conflict and geopolitical tensions.
Right now, inflation is moderating, but we recognise that many households still feel the pressure from cost of living. That is why the Government has enhanced the Assurance Package to help everyone cope better. We try our best to operate public services efficiently and to keep costs low. However, cost is inevitable as things still cost money. When costs go up, despite our best efforts, they still have to be covered.
For essentials, some of it will be covered by Government subsidies, for example, healthcare and public transport costs, but not all. Some part needs to be paid by consumers. Some consumers will need help with this. We will provide them targeted direct help if need be, for example, U-Save rebates and public transport vouchers. And those who need more help will get more support. This is much better than subsidising the product directly or having tiered pricing schemes because that is more expensive and less effective.
Overall, we have provided high quality Government and public services to Singaporeans. The Government Budget is less than 20% of the GDP, which is much lower than most developed countries.
Nevertheless, the Government's spending needs are rising steadily, especially in healthcare.
The GST increase is essential for this. There is no good time to do it. But through the Assurance Package, the Government has effectively delayed the impact on most citizen households while getting the new rate implemented and the additional revenues flowing. For example, the bulk of the GST revenues are paid by higher-income groups as well as foreigners and tourists. While the Government is helping most Singaporean households, the higher-income groups as well as foreigners will contribute more to Government revenue.
Through this combination of not delaying necessary adjustments while providing needed support to households, we can keep our public services and finances sound while helping Singaporeans going through a difficult time
(In English): I would like to take this opportunity to highlight the point that was just raised – I believe it was by Mr Louis Chua – on delaying GST increase for one or two years on the basis that finances have been better than expected.
We are actually doing much better than that. With the Assurance Package, we have delayed the impact of the GST increase for the majority of Singaporean households by at least five years and by about 10 years for lower-income households.
In conclusion, we recognise the impact of inflationary pressures on Singaporeans. Many are cutting back on spending while we ride out the economic uncertainties. We empathise with these challenges and we will do more, if necessary.
But, we have to do it right. This means: one. preserving market principles and not over-regulating – to allow the market to allocate resources and determine price so that we can have an efficient, productive economy while intervening decisively where market failures exist; and two, fiscal sustainability – to intervene prudently so as to remain responsible to future generations.
In the longer term, the only bulwark against inflation is to remain competitive, to grow the economy and to achieve wage growth for all. This is the sustainable and sensible way ahead and this Government is committed to this mission.
Mr Speaker, Sir, I support the amendments to the Motion raised by Mr Liang Eng Hwa.
Mr Louis Chua.
Thank you, Mr Speaker, and I thank the Senior Minister of State for the response to my speech. I just have a couple of clarifications.
But before that, I do need to highlight that I think all of us agree here that policy-making needs to be dynamic. As what the Leader of the Opposition, Mr Pritam Singh, has said in his opening speech, we need to ensure that our policies are reflective of the circumstances today and tomorrow versus the past.
In this regard, I also acknowledge and agree with the Senior Minister of State when she shared that the reduction in household sizes is a key factor in driving housing demand. I also note that just in the last five years, you see that the average household size has come down very rapidly from about 3.5 to close to about three.
I agree that even if the population remains static, that is going to be a significant source of demand, but the population is not static.
At the same time, the uncertainty I was expressing is that if you look at the population growth rate today, that appears to be a step up, not just in percentage. If you look at it in absolute terms, I think the number is close to about 280,000 or 290,000 persons' increase in the last one year versus the increase of about 28,000 to 29,000 in the last five years' average. prior to COVID-19.
I think this is also a big question mark – as to what then is the forward looking policy when it comes to the incoming net migration, because as far as I understand, our total fertility rate (TFR) is at an all-time low. I think a lot of the new housing demand is also driven by the population policies.
At the same time, as I shared in my speech, we are looking at a record high number of marriages. I think that was recently reported in the last one to two months. That appears, again, to be a step up in the housing demand versus what we have seen in the past decade or so.
All these factors, put together, would suggest that perhaps, if we look at housing demand, that appears to have stepped up versus what it was previously. I agree with what the Senior Minister of State has shared earlier. So, the clarification – two clarifications here —
It is a rather long preamble.
Sorry, the two clarifications here is that I understand that the Government has ramped up the supply of BTO flats, but I am still not sure as to why when it comes to rental flats, there is a significant reduction in the pace of increase.
Secondly, can I check with the Senior Minister of State to confirm if she believes that we have already cleared the backlog of demand from prior years?
In response to Mr Louis Chua's questions, first of all, in terms of backlog, I have shared that we are in the process of clearing the backlog and that HDB has delivered close to 75% of the COVID-19 delayed projects. This will continue and we seek to get back on track.
Not only do we seek to get back on track, we do recognise the need to have a buffer. This is also something that Members have talked about. It is something that we do agree with. We see the need for a buffer. This is also the reason why we are seeking to ramp up supply of Parenthood Provisional Housing Scheme (PPHS) flats. We know that this is very important to Singaporeans who are waiting for key collection.
In terms of population growth, we have discussed population growth in this House over the years. I do not propose to go over it in detail. Suffice to say, we have seen that in the last few years, due to COVID-19, that has caused very sharp fluctuations in population. I believe that the sharpest growth post-COVID-19 and the reopening of our economy in terms of non-citizens actually would be the category would not be living in our HDB flats, particularly, the migrant workers.
But overall the Government is planning to ensure that through our land use planning as well as making sure that we have got all the supply side and demand side factors in place to ensure a steady supply, both of private as well as public housing.
And I thank Mr Louis Chua for also agreeing on the observations that I have made.
I made these remarks yesterday, but I notice that today there are more Members who are in this House. I am going to repeat my remarks that I made yesterday. Which is that in the past, Members have taken this opportunity for raising points of clarification to make mini speeches before asking their clarification. As I highlighted yesterday, there have been occasions where one such mini speech exceeded five minutes.
So, I want to remind Members that under Standing Order 48(3), no Member other than the mover – and in this case, it is Mr Pritam Singh – is allowed to speak more than once on a Motion.
Making a point of clarification or asking supplementary questions are not the occasions for a second speech. I will certainly allow some leeway for Members to explain their point of clarification or make your question intelligible, but I ask Members please, for your cooperation and understanding, to observe the Standing Orders and to keep your points of clarification and questions concise and to the point. Mr Leong Mun Wai.
Thank you, Speaker. I have two clarifications for the Senior Minister of State. One, the HDB recently reported a $5.38 billion dollars deficit. A lot of this is probably due to the subsidies given to the BTO buyers because HDB paid $5.9 billion to the Singapore Land Authority (SLA) at the same time in the same year.
Sir, I have two questions: will this deficit $5.38 billion ultimately be paid by the Singaporean taxpayer? And two, when the Plus and Prime flats come into operations, will this deficit actually go up higher?
Actually, I am very glad that Mr Leong seems to have come round to the idea that there is a deficit in our building programme and the deficit is made up by the subsidies that are given to Singaporeans; so, the answer is yes, these deficits are taxpayer-funded. That is why much as we would like to be as generous as we can, we also need to be responsible. We need to be good stewards of public resources and we have to run the public housing building programme with sustainability in mind.
As to whether or not with the Prime and Plus going forward whether there will be more subsidies, I think that is not something that we can determine just simply by the introduction of the framework alone. But the intention of the framework is to streamline demand, streamline demands so that people would make quite prudent choices and it will emphasise the principle of owner occupation and what I can say to Mr Leong is that the subsidies will be very well used.
Ms He Ting Ru. You did raise your hand, right? Yes.
Thank you, Mr Speaker. Just a really quick clarification. I thank Senior of State for mentioning under the HDB PQM framework. I just wanted to make a quick clarification that in my speech, I was asking for more consideration and weightage to be given to outlets and restaurants that actually offer healthier options. I was not saying that it was not already being done. but I think the point is well taken.
I think on the principle we are not disagreeing and I happened to share Ms He Ting Ru's passion for healthy food so this is certainly something that we will look into. But we also have to balance against the other relevant considerations for quality because after all, coffee shops do serve a wider range of consumers and residents. And people have different preferences for what they want to see in the coffee shop.
Mr Leong Mun Wai.
Mr Speaker, I have one more clarification for the Senior Minister of State. So, comparing with our Affordable Home Scheme — of course, there will be issues that we still need to discuss about the Affordable Home Scheme. But the current Government home scheme, do you agree that it has led to high HDB prices? At the same time, every BTO flat, not only the buyers pay for the land cost but all Singaporeans have to pay for the deficit?
I am afraid the nature of Mr Leong's question is not very clear. Could Mr Leong rephrase his question, Mr Speaker?
Mr Speaker, sorry about that. What I mean is that I am trying to compare our Affordable Home Scheme with the current BTO scheme of the Government. Of course, there will be some disadvantages, some problems, some issues that we need to overcome, but I think the Affordable Home Scheme's problems can be overcome too.
So, we are making a policy decision here. The current BTO scheme has led to increasing prices of the BTO, because you have to incorporate the rising land cost. As a result, it has led to rising HDB prices. Secondly, every BTO flats need to be financed by HDB and it creates a deficit which, ultimately, is paid by all the Singaporeans. So, there are two disadvantages of the current BTO scheme. Do you agree to that?
I am afraid I will have to answer Mr Leong's question with a question of my own. He has not made clear how his Affordable Housing Scheme does not result in the outcome that he claims the BTO scheme has created?
Mr Speaker, Sir, I think it is only fair that Senior Minister of State answers my question first and then I will answer her question.
As with every Government scheme, when circumstances evolve and change, it does prompt a review. However, I think that the comparison that Mr Leong is asking me to make is a spurious one because the Affordable Housing Scheme, as I have said before, is one which I do not think has convinced Members of this House or even many members of the public because it seeks to reconcile three quite incompatible aims.
It seeks to dramatically lower BTO prices by leaving out land costs at the point of first purchase. But perhaps his party is worried that the scheme will be rejected outright by homeowners who are worried about a crash in the resale price so it tries to assure people that it does not do. And then also, the scheme seeks to avoid being seen as a raid on the Reserves. But as I have said these three aims are not compatible because by taking land cost out at the point of first purchase actually that already has an impact on the Reserves.
This topic has been covered quite extensively over more than a day of debate in this House, so I do not propose to go through it again. But I do not see how I can make any meaningful comparison from between a scheme that has worked, and which requires adjustments from time to time to meet changing circumstances and evolving demand, with a scheme which, as far as we can tell, is actually not able to be internally consistent and is not one that has been convincing to both Members of this House and the public.
If I may, actually this topic was subject to a debate in a previous Sitting for which we came to a conclusion. Let us come back to the Motion at hand and let us confine our clarifications to the speeches relating to the Motion proposed by Mr Pritam Singh. Mr Leong.
Mr Speaker, Sir, it is exactly because of that, I am not asking for a revisit on the pros and cons of the Affordable Home Scheme. I am just saying that based on what the Senior Minister of State has said, does she agree that the current schemes has got these two disadvantages: one, HDB prices will continue to go up as long as land cost goes up; two, and when the Government or HDB sells the BTO flat, there will be a subsidy and this translate into HDB deficit and this deficit goes to the budget and all Singaporeans have to pay for it?
A point of order, Mr Speaker. We have debated this time and again. We should not be wasting time on revisiting this debate over and over again. It is a waste of everyone's time. So, can I ask Mr Speaker to make a —
Mr Leong Mun Wai: Point of order, Sir. A point of order, Sir.
Mr Leong, sit down first. Let Mr Lim make his point.
So, can I invite Mr Speaker to make a decision on this so that we can move out of this debate. Otherwise, we will be going back to issues which we have debated over and over again, and now resurfacing yet again.
Actually, I did say this. I thought Mr Leong was going to make a different point of clarification. I will allow one last response if Minister of State Sim Ann wants to make it; and then I am going to move on.
Senior Minister of State Sim, would you like to respond to that last clarification by Mr Leong?
I think Mr Leong is tying himself up in knots because if he considers the increase in housing prices over the years as a disadvantage of the scheme, is Mr Leong saying that prices must remain static in order for the housing market to be considered favourable and in order for our housing policy to be considered a success? In which case, I think Mr Leong did not pay attention when I explained that with favourable economic conditions and growing wages over time, we do expect to see a gradual increase in home values and prices.
So, it seems to me that Mr Leong is tying himself up in knots and I am not convinced that members of the public will agree that static prices over the long term is what the housing policy should be aiming for.
The second way in which he is tying himself up in knots is that by posing this question about deficit, the deficit incurred by HDB, to me, it seems to me that Mr Leong is denying that housing should be subsidised at all. If you want to subsidise any product, be it housing, be it education for that matter, defence, street lighting, these are public goods that are provided.
In the case of housing, it is not 100% subsidised by Government; there is some payment from home owners. But the subsidy from Government and by extension taxpayers is very substantial; and therefore, it seems to me that Mr Leong's line of questioning will inevitably lead him to conclude that there should not be any subsidy.
So, I really think that for both Mr Leong's good and for the House's good, I think we should pasue this because Mr Leong, you are leading yourself down a path of no return.
Let me remind all Members of Standing Order 50, which relates to the point I made earlier. Can I invite Mr Pritam Singh to make your closing?
Mr Speaker, thank you to all in the House who have spoken on this Motion.
Mr Speaker, I will get straight into it. The Workers' Party (WP) rejects the amendment proposed by Member Mr Liang Eng Hua Hwa. We have no substantive quarrel with Amendment No 3, which does not substantially change the thrust of our Motion.
A careful examination of our proposals today would show that they would neither undermine Singapore's fiscal sustainability nor would they unduly burden future generations.
However, we disagree with Amendment Nos 1 and 2.
Amendment No 1 which states that "cost of living is a global concern" reads as an attempt to minify the role Government can and should play to reduce cost of living burdens on Singaporeans.
While global factors are important, these should instead prompt a review of existing policies with the view to relieve cost of living pressures.
We also disagree with Amendment No 2 and its use of the words "continue pursuing policies". The use of the word "continue" suggests to us, at least, that the status quo is fine. We disagree. Indeed, we have proposed specific structural changes to the system that we believe will work better than current policies.
The WP Members of Parliament have made concrete proposals in several areas. We urge the Government to conduct a comprehensive review of its policies to better support Singaporeans and their families during this cost of living crisis.
On the electricity front, Member of Parliament for Aljunied GRC, Ms Sylvia Lim observed that the need for Singaporeans to conserve energy is more urgent than ever, given the risks of high prices and supply shortages caused by conflicts around the world. She recounted the Government's answer to managing household electricity bills, was the open electricity market. But the dramatic failures of retailers in 2021 has cast doubt on the viability of the open energy market to bring down household electricity bills. She asked the Government to look again at her earlier suggestion of tiered electricity pricing and to also consider lowering charges for consumption during off-peak hours.
Staying on utilities and specifically water prices, my contribution to this debate was my calling on the Government to review the price structure of water for both domestic and non-domestic consumers. Such a review would have the objective of creating a more fairly tiered structure that promotes water conservation and potentially lowest cost for business and many households.
Aljunied GRC Member of Parliament, Mr Faisal Manap, reiterated the call he made in 2014 to the Government to establish a means of assessing the effectiveness of our social safety net. Back then, he proposed that Singapore adopt the International Labour Organization (ILO)'s social protection framework. He suggested that if the Government prefers a more localised framework, the Government should then look at the minimum income standard published for households in Singapore, reports that have been published by local academics led by Assoc Prof Teo You Yenn and Dr Ng Kok Hoe. The Government is not precluded from publishing its own list of basic needs and those extras required for thriving in Singapore as a way of tracking outcomes for Singaporeans.
Sengkang GRC Member of Parliament, Ms He Ting Ru's speech covered several keynotes in health and the health and care ecosystem where the Government can and should be working harder to control the cost of healthy living in Singapore. Her speech reflects the WP's concern about the effect by increasing cost of care is having on the physical and mental well-being of families and calls for more support in areas like mental healthcare and intermediate and long-term care. For instance, she called for MediSave annual limits to be increased in line with medical inflation.
Hougang SMC Member of Parliament, Mr Dennis Tan asked for the current means testing in healthcare to be improved upon to better account for an individual's financial situation and health conditions so that healthcare can be more affordable and accessible. He called for help to be given to more Singaporeans who may need more assistance, even though they may be adjudged not to be eligible based on present household income or annual value of their home, especially when they are not able to receive financial assistance from members of the same household.
He called for more help to be extended to adults with special needs or other forms of disability who are in the working adult age group, but who are unable to work and require part-time or full-time care from family members, especially in families where the parents are getting on in age. More help should also be extended to family members responsible for their caregiving.
Sengkang GRC Member of Parliament, Mr Louis Chua reiterated his call for the Government to defer the GST hike in 2024, with even one year being a helpful deferment, especially when the Government has already achieved the revenue increase which the GST hike was meant to bring.
On housing, he called for the Government to increase the supply of HDB flats across the for purchase market and also the neglected for rent market, especially as our population growth and housing demand appears to have stepped up. To ensure all Singaporeans can access appropriate housing and shelter, addressing the fundamental demand-supply problem would necessitate adjustments to the supply side of the equation so that the market can find the appropriate equilibrium.
On private transport, Sengkang GRC Member of Parliament, Assoc Prof Jamus Lim called for changes to the COE system that would rationalise high prices. He explained why expensive COE affect not just households that may have very legitimate need for cars, such as families with children or the disabled, but also everyone that books a taxi or PHC.
He stressed the importance of smoothing out the vehicle quota supply across the years and seizing the practice of reimbursing early deregistered COEs at their book value. He also suggested prohibiting dealers from bidding directly for COEs and treating private hire cars in the same manner as taxis are, which is to have them bid in the open category albeit paying Cat A or Cat B prices.
On public transport, Aljunied GRC Member, Mr Gerald Giam called for a National Transport Corporation to be established as a publicly owned non-profit land transport planner and operator of all MRT, LRT and trunk bus services. This will allow the early profits of the current public transport operators to be redirected to benefit commuters by mitigating fair increases and providing free transport for the elderly and people with disabilities. He explained how the NTC could bring about significant productivity gains and economies of scale when compared to the current public transport model.
Mr Speaker, some of these proposals by the WP will be revenue-neutral. Others will result in increased expenditures.
Sir, at the National Day Rally this year, the Prime Minister shared with the public that the new classification system for HDB flats into Prime, Plus and Standard from the existing mature and non-mature classification, would see the sticker price of an $877,000 5-room BTO flat in Ang Mo Kio, for example, come down.
The question is how would this reduction in price come about? Would it be from the Chief Valuer relooking at how land is priced for public housing, or as should be assumed, from an increase in taxpayer subsidies from HDB flats, drawn from the yearly Budget?
The reality, Mr Speaker, is that the Government will look to lower HDB prices through the deployment of taxpayer dollars. Inevitably, it is a taxpayer that is going to foot the bill for a larger HDB subsidy to make HDB flats cheaper. And this is an amount that the Government believes it can absorb without an increase in taxes. Otherwise, it would not have pursued the new HDB BTO classification system.
In the same spirit, Mr Speaker, the WP believes that we should continue to look beyond short-term relief in addressing this cost of living crisis and to relook at prevailing orthodoxies on other schemes so as to lower cost for Singaporeans and their families.
A few other proposals will put cash in the hands of vulnerable workers and seniors to help them navigate their way out of this difficult period, for example, by reviewing with a fresh perspective, both MediSave, as well as the Workfare Income Supplement.
A few other proposals may prompt behavioural shifts towards greater efforts to reduce wastage and more sensitivity to sustainable usage of utilities, such as water and electricity.
At their core, all the proposals prompt the Government to relook at its legacy policy with an eye on battling the cost of living crisis that Singaporeans find themselves deeply mired in.
Mr Speaker, it has been a long day. But I would like to thank all Members, including the office holders, PAP Members of Parliament, PSP, Non-Constituency Members and the Single Nominated Member of Parliament (NMP) for participating in this important Motion. I may not have referred to all of you in my roundup speech but I thank you for your participation.
The Workers' Party will vote in favour of the original Motion and reject the amended Motion for the reasons I have provided earlier in my round-up speech.
Are there any clarifications for Mr Pritam Singh? I do not see any.
We have now come to the conclusion of the debate and I shall put the questions to the House for a decision. We have three amendments proposed by Mr Liang Eng Hwa. We will deal with the amendments first.
Amendment No 1 is, "In line 1, after the words 'That this House' to insert the words 'acknowledges that cost of living is a global concern, and'".
The question, "That Amendment No 1 be made", put.
As many as are of that opinion say "Aye".
Hon Members say "Aye".
To the contrary say "No".
Some hon Members say "No".
I think the Ayes have it. Any Member — Yes, Ms Sylvia Lim, I was going to ask whether any Member wishes his dissent or abstention to be recorded, or to claim a division before I declare the results. So, for those wish for their dissent to be recorded, please rise.
Hon Members Mr Chua Kheng Wee Louis, Mr Gerald Giam Yean Song, Ms He Ting Ru, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Ms Sylvia Lim, Mr Muhamad Faisal Bin Abdul Manap, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong stood at their seats for their dissent to be recorded.
Okay. We will record those dissent. The Ayes have it.
Question, "That Amendment No 1 be made", agreed to.
Amendment No 2 is, "In line 1, to delete 'review its policies so as to' and insert 'continue pursuing policies that together'".
The question, "That Amendment No 2 be made", put.
As many as are of that opinion say "Aye".
Hon Members say "Aye".
To the contrary say "No".
Some hon Members say "No".
I think the Ayes have it. For Members who wish for their dissent to be recorded, kindly rise.
Hon Members Mr Chua Kheng Wee Louis, Mr Gerald Giam Yean Song, Ms He Ting Ru, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Ms Sylvia Lim, Mr Muhamad Faisal Bin Abdul Manap, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong stood at their seats for their dissent to be recorded.
Thank you. The Ayes have it.
Question, "That Amendment No 2 be made", agreed to.
Amendment No 3 is, "At the end of line 2, to add ', without undermining our fiscal sustainability and burdening future generations of Singaporeans'''.
Question, "That Amendment No 3 be made", put and agreed to.
The amendments have been agreed to. The Original Motion as amended is now before the House.
The question is, "That this House acknowledges that cost of living is a global concern, and calls on the Government to continue pursuing policies that together lower cost of living pressures on Singaporeans and their families, without undermining our fiscal sustainability and burdening future generations of Singaporeans".
As many as are of that opinion say "Aye".
Hon Members say "Aye".
To the contrary say "No".
Some hon Members say "No".
I think the Ayes have it. For those Members who wish their dissent to be recorded, kindly rise where you are. We will record it.
Hon Members Mr Chua Kheng Wee Louis, Mr Gerald Giam Yean Song, Ms He Ting Ru, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Ms Sylvia Lim, Mr Muhamad Faisal Bin Abdul Manap, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong stood at their seats for their dissent to be recorded.
The Ayes have it.
Original Motion, as amended, agreed to.
Resolved, "That this House acknowledges that cost of living is a global concern, and calls on the Government to continue pursuing policies that together lower cost of living pressures on Singaporeans and their families, without undermining our fiscal sustainability and burdening future generations of Singaporeans."
Deputy Leader.
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