Cost of living — Topics

15 Aug 2016

Impact on Rice Supply Given El Nino Effect and Weather Changes

Chen Show Mao asked whether the 2015-2016 El Nino would reduce rice supply from countries like Thailand, Vietnam, and India, and how this might affect Singapore's rice prices for the rest of the year.
Lim Hng Kiang noted that the US Department of Agriculture forecasts a 1.6% drop in global rice production for 2016 due to lower yields in major producing countries, but no supply disruption is expected because of existing stockpiles.
He added that El Nino has weakened with the June monsoon, and world rice production is forecast to rise by 9.8 million metric tons in the year ahead.
Retail rice prices in Singapore have been stable over the past year and are expected to remain so for the rest of the year, barring any unforeseen crisis.

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18 Aug 2015

Prices Charged at Hawker and Food Centres

The Minister outlined how rental controls, the removal of speculative practices, and the appointment of social enterprises like NTUC Foodfare have lowered rental costs and are addressing the primary cost driver of ingredients for hawkers.
Concerns were raised about the responsibility for keeping food affordable, the importance of maintaining food value and heritage rather than just low prices, and the need for transparency with price displays at stalls.
The Minister affirmed a shared stakeholder approach to affordability, highlighted the pilot use of social enterprises to reduce ingredient costs, and agreed to study requirements for clearer price display to enhance consumer transparency.

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14 Jul 2015

Record Sale Prices for Neighbourhood Coffee Shops

Gerald Giam raised concerns about record-high coffee shop sale prices in Bukit Batok and Hougang, asking if the government is worried about their impact on stall rentals, food prices, and speculation affecting affordable food for lower-income residents.
Minister Khaw Boon Wan responded that these transactions were private market outliers, emphasized HDB's strategy of not selling coffee shops but renting them out, maintaining sufficient supply, and building new coffee shops and hawker centres to ensure competition and affordability.
Giam pressed for the government's stance on speculation and concrete measures to prevent it, including whether HDB should buy back coffee shops; Khaw clarified the sellers were long-term operators, not speculators, and that forcing sales back to HDB is not legally feasible.
David Ong suggested a hawker centre in Bukit Batok to provide alternative affordable food options, and Khaw confirmed that one is already planned, with efforts to find a good location.

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13 Jul 2015

Prospect and Implications of Prolonged Deflation for Singapore

Ang Wei Neng questioned whether Singapore would enter prolonged deflation after seven months of negative headline inflation and the implications of such a scenario.
Lim Hng Kiang clarified that the negative inflation was due to specific price declines in car costs, housing rentals, and oil-related items, not broad-based demand weakness, and core inflation remained positive.
He explained that these disinflationary factors are temporary, with oil prices recovering and budgetary measures set to dissipate, leading to projected inflation rises later in 2015 and 2016.
The government assessed that Singapore is not experiencing deflation and does not expect to slip into it, with core and headline inflation expected to average within positive ranges for 2015.
Monetary Authority of Singapore and Ministry of Trade and Industry will continue monitoring price developments closely.

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23 Feb 2015

Annual Budget Statement

The Singapore government projects a near-balanced budget for FY2014 and aims for 2-4% GDP growth in 2015, with low inflation and a tight labor market, while outlining a long-term economic restructuring toward innovation and productivity.
A major focus is the "SkillsFuture" initiative to provide lifelong learning support, including a SkillsFuture Credit for all Singaporeans, enhanced subsidies for mid-career training, and grants to foster innovation and internationalization for businesses.
The budget introduces the Silver Support Scheme for low-income retirees, enhances CPF savings through a higher salary ceiling and contribution rates for older workers, and provides various cost-of-living support such as GST vouchers and education fee waivers.
To fund increased spending on healthcare, infrastructure (including Changi Airport Terminal 5), and social security, the government will include Temasek in the Net Investment Returns framework and raise the top marginal personal income tax rate from 20% to 22%.

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13 Feb 2015

Impact of Lower Oil Prices on Electricity and Gas Tariffs

Gan Thiam Poh asked the Minister for Trade and Industry about the projected reduction in electricity and gas tariffs over the next six to 12 months due to lower fuel oil prices.
The Second Minister for Trade and Industry clarified that electricity and town gas tariffs are not projected by the government but are reviewed quarterly by the Energy Market Authority to reflect underlying costs, including fuel costs.
The fuel cost component for electricity is based on average forward fuel oil and Brent prices and makes up about half the tariff, while for town gas it is based on fuel oil and naphtha prices and comprises about 40% of the tariff.
Natural gas prices, which are indexed to oil prices, have fallen in line with global oil trends, leading to recent tariff reductions of 7.9% for electricity and 8.7% for town gas in the latest reviews.

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13 Feb 2015

Recent Fare Increases by Public Transport Operators

Er Dr Lee Bee Wah questioned the rationale for recent fare increases despite falling oil prices and high operator profits, suggesting the fare review formula should incorporate profitability and be revised earlier than 2017.
Minister Lui Tuck Yew explained that fare adjustments follow a formula tied to core CPI, wages, and energy costs, with annual reviews to avoid large jumps; the 2.8% increase resulted from a carry-over from 2013 and was mitigated by lower oil prices.
The Minister emphasized that operators need profits for capital investments (e.g., SMRT's $2 billion commitments) and that fares remain affordable compared to other cities and household incomes, with protections for vulnerable groups.
Debate highlighted that while cross-subsidization occurs from non-fare businesses, the fare formula aims to balance affordability with financial viability, and early changes are not planned as the current formula runs until 2017.

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12 Feb 2015

Prices of Hawker Food and Common Household Groceries in Last Five Years

The Ministry for Trade and Industry, through the Department of Statistics, tracks the prices of over 100 types of hawker food and more than 1,000 common household groceries via the Consumer Price Index (CPI) basket.
Hawker food items tracked include noodle-based dishes, rice-based dishes, local delicacies, desserts, beverages, and cut fruits from both air-conditioned and non-air-conditioned food centres.
Common grocery items monitored include rice, cereals, meat, poultry, dairy products, eggs, and vegetables from retailers like wet markets, supermarkets, and provision shops.
Detailed price changes for these items over the last five years are provided in a table, with average retail prices also published in the Monthly Digest of Statistics Singapore.
The CPI basket captures price movements for both hawker food and groceries to reflect the consumption patterns of resident households.

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19 Jan 2015

Impact of Falling Oil Prices on Public Transport Fares

The Minister for Transport explained that the fare formula is based on the Core Consumer Price Index (40%), Wage Index (40%), and Energy Index (20%), using data from 2013 for the 2014 fare review.
The Energy Index showed a negative 12.6% change in 2013, but the Core Consumer Price Index and Wage Index increased, resulting in a fare adjustment quantum of negative 0.6% for 2014.
When combined with a carried-over 3.4% from the previous exercise, the overall fare adjustment for 2014 is a 2.8% increase.
For the 2015 fare review, which will use 2014 data, a negative fare adjustment of around 1% is possible due to lower energy prices.
The Public Transport Council will consider the formula, affordability, and operator applications before deciding on the final fare adjustment.

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19 Jan 2015

Impact of Falling Oil Prices on Singapore Economy and Petrol Pump Prices

The Minister explained that Singapore, as a net importer of oil, benefits from lower oil prices through reduced costs for electricity, fuel, and business inputs, which can improve margins and consumer purchasing power.
Concerns were raised about the petrochemical sector, where lower feedstock costs are offset by falling product prices, and about whether petrol pump price reductions fairly reflect the 41% drop in crude oil prices, with the Minister noting non-fuel costs and market factors limit the pass-through.
The Minister stated that core inflation remains sticky due to wage costs, while job security in the oil and gas sector is stable in the short term but could be affected if low oil prices persist long-term, and emphasized that competition and regulation prevent profiteering in utility prices.

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5 Nov 2014

Absence of Piped Gas in HDB Rental Flats

Baey Yam Keng asked why piped gas is absent in HDB rental flats, citing that many residents cook and alternatives like bottled gas impose upfront deposit costs on low-income families.
The Minister explained that omitting piped gas reduces construction and maintenance costs, noting a quarter of existing HDB households with gas access do not use it, making it non-essential.
The Minister added that bottled gas deposits are lower than switching on piped gas, and alternatives like electric or induction stoves are available for tenants who cook.

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7 Oct 2014

Easing Impact of High Core Inflation Rate on Low-wage Households

Ang Wei Neng asked the Ministry of Trade and Industry about actions to ease the high core inflation rate and cushion its impact on low-wage households.
Lim Hng Kiang explained that core inflation is driven by higher food import costs and services inflation due to tight labor market conditions, while MAS uses currency appreciation to contain imported inflation.
The government is committed to keeping inflation in check through productivity schemes and transitional support like the Wage Credit Scheme to moderate wage cost pass-through to prices.
A multi-pronged approach supports low-income households, including job creation, Workfare, wage support, and subsidies and transfers for healthcare, childcare, education, transport, and housing costs.
Government transfers and rebates accounted for 90% of annual income per member for the lowest income quintile, highlighting significant support for vulnerable households.

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14 Apr 2014

GST Offsets for Low-income Households

Gerald Giam asked if the government would consider fully offsetting GST for the lowest 20% of households even without one-off Special Payments, and what percentage of their GST was offset last year.
The Senior Minister of State for Finance stated that without special payments, the lowest-income households had about half their GST offset, and with special payments, over 90% was covered, noting that other subsidies also reduce their overall tax burden.
The government explained that the GST Voucher Scheme is part of a broader progressive system designed to provide permanent support, but it is not intended to fully offset GST on its own, as support is delivered holistically across various areas.

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17 Feb 2014

Comparison of Bus and Train Fares in Singapore and Major Cities

Mr Gan Thiam Poh questioned how Singapore's bus and train fares compare to other major cities in terms of fare per kilometre and as a percentage of monthly income.
For a 10 km journey, fares in Singapore are cheaper than in London and Tokyo and comparable to Hong Kong for single-mode trips, but are lower than in all three cities for journeys involving transfers due to Singapore's distance fare system.
Households in the second income quintile in Singapore spent about 2.6% of their monthly income on public transport in 2012, which is lower than the estimated 4% spent by median-income households in Hong Kong before their recent fare increases.
The Minister acknowledged that fare impacts vary across income groups and emphasised the focus on assisting lower-income and disadvantaged commuters through enhanced concession schemes.

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11 Nov 2013

Keeping Transport Fares Affordable

The government accepted the Fare Review Mechanism Committee’s recommendations to implement a new fare formula and two new concession schemes for low-income workers and persons with disabilities, with discounts set to offset the next fare increase for these groups.
Public transport fares are expected to increase in 2014, but the Transport Minister urged the Public Transport Council to ensure any rise does not exceed the 2013 average national wage increase to maintain affordability for average commuters.
Service quality improvements are being addressed separately from the fare formula, with plans to add buses and trains and enhance regulatory standards to boost public transport reliability and capacity.
The Public Transport Fund will be strengthened with contributions from transport operators, allowing for more transport vouchers and support for needy households, with outreach efforts emphasized to ensure all eligible commuters benefit.

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8 Jul 2013

Revisions to Financial Assistance Schemes' Payouts

Mary Liew inquired about the frequency of adjustments to financial assistance payouts over the past five years to account for inflation and whether the payouts are sufficient for daily needs.
Chan Chun Sing noted that Public Assistance recipients receive a monthly cash allowance along with additional support, including medical care and community services, with extra help for households with school-going children.
The government has increased cash assistance rates three times in the last five years (2009, 2011, 2013) and introduced extra tiers in 2013 for special needs like healthcare and hygiene items to help recipients cope with rising costs.
These adjustments aim to address inflation and evolving needs, with ongoing reviews planned to keep financial assistance relevant and effective for emerging trends.

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8 Apr 2013

Trend for Singapore's Inflation Rates

Singapore’s inflation is projected to ease to 3.5–4.5% this year, with accommodation and car costs still accounting for a large share, while imported food and oil-related inflation are expected to remain benign.
The government acknowledges that tight labour policies may push up wage costs and services inflation during restructuring, but measures like the Wage Credit Scheme and productivity initiatives aim to cushion the pass-through to consumers.
In response to concerns about structural inflation, the minister emphasized that wage increases alone do not necessarily cause long-term inflation if they are accompanied by productivity gains, and it is too early to conclude that tighter labour policies will create sticky inflation.

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25 Feb 2013

Annual Budget Statement

The government projected a modest GDP growth of 1-3% for 2013, highlighting challenges from global factors and an aging workforce, while noting a $3.9 billion surplus for FY2012 driven by short-term revenue increases.
A "Quality Growth Programme" was introduced, focusing on restructuring the economy through tighter foreign worker policies, wage subsidies, and productivity incentives to raise incomes and support businesses during the transition.
Social measures were expanded to promote inclusivity, including enhanced Workfare payouts for low-wage workers, property tax reforms targeting high-end properties, and new funds for healthcare, eldercare, and community services.
The government announced direct assistance to households, such as double GST Vouchers, Medisave top-ups for seniors, and tax rebates, to address cost-of-living pressures while maintaining a balanced budget with a projected surplus.

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15 Nov 2012

Strong Singapore Dollar and Impact on Non-Imported Inflation

Teo Siong Seng questioned how a strong Singapore dollar policy addresses inflation driven by domestic factors like rising manpower, transport, and rental costs.
Tharman Shanmugaratnam explained that while high inflation in 2012 was partly due to domestic factors like COE premiums and imputed housing rentals, the strong dollar helps dampen imported prices and moderate overall inflation, with monetary policy calibrated to guard against rising inflation expectations.
The government employs a multi-pronged strategy including supply-side measures such as expanding public transport and housing supply, as well as targeted financial support for lower-income households to manage cost pressures.
To address long-term inflationary pressures from a tight labor market, the government emphasizes raising productivity through investments and initiatives, aiming to sustain growth without increasing reliance on foreign workers or inflation.

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14 Nov 2012

Freeze on Government Fee Increases to Limit Inflation

Laurence Lien proposed a short-term freeze on government fees, HDB flat prices, and public transport fares to curb inflation.
The government noted that most of the recent inflation stemmed from imputed housing rentals and COE premiums, while government fees and transport costs contributed minimally.
Measures such as increased housing supply, subsidies for healthcare and childcare, and GST vouchers are already in place to help households manage costs.
The government will continue monitoring inflation and is prepared to introduce additional measures if needed.

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