Eight steps to help tackle worries over cost of living

People's aspirations and ability to fulfil them can affect perception of the issue: Chan Chun Sing

Prices of goods and services in Singapore may be rising at a slower pace, but Singaporeans still feel the squeeze, convinced that the cost of living is rising faster.

In tackling the issue yesterday, Minister for Trade and Industry Chan Chun Sing said in Parliament that cost of living is not a one-dimensional subject about price changes.

People's aspirations, and their ability to fulfil them, can also affect their perception of the issue, Mr Chan explained.

Still, he acknowledged their concerns, saying "we recognise Singaporeans' evolving aspirations for a better life for themselves and their families, and the associated stress of achieving real income growth in a volatile economic environment".

He assured Singaporeans that the Government is committed to helping mitigate the situation.

Related story: Data can be key in easing cost of living concerns

"Beyond creating opportunities for Singaporeans to enjoy real wage growth to meet their aspirations, the Government is also committed to helping Singaporeans stretch their hard-earned dollar," he said in reply to Mr Liang Eng Hwa (Holland-Bukit Timah GRC), who had asked whether the cost of living has increased significantly.

The issue has gained traction in recent months as electricity tariffs rose and an earlier announced increase in water prices kicked in.

But looking at absolute measures, overall inflation in Singapore has, in fact, declined between 2012 and last year compared with the five-year period before it, said Mr Chan.

The Consumer Price Index - which captures price changes - for all items rose 0.6 per cent a year on average for the past five years. This was lower than the average increase of 4 per cent between 2007 and 2012. The figure is likely to remain low this year, with overall inflation expected to be between 0.5 per cent and 1 per cent, said Mr Chan.

But he gave a word of caution, saying that rising global oil prices is expected to increase fuel costs and electricity prices. However, he foresees any potential consumer price rise to be moderate alongside a faster pace of wage growth and improvements in the labour market.

COMMITTED TO HELP

Beyond creating opportunities for Singaporeans to enjoy real wage growth to meet their aspirations, the Government is also committed to helping Singaporeans stretch their hard-earned dollar.

MINISTER FOR TRADE AND INDUSTRY CHAN CHUN SING

Yet, "no single measure will express an individual's 'cost of living' pressures fully, given the different needs and wants, the evolving aspirations and the potential gap between aspirations and anticipated means", he said.

Other factors also affect perceptions of living costs, including an evolving interpretation of what are essential goods and services for different groups, noted Mr Chan.

He also cited the rise in prices of daily items - for example, water and transport fares - that may have a disproportionate psychological impact on consumers, even if the increases are not the biggest in absolute terms.

He outlined the Government's eight strategies in managing the "pressure points" which spark worries over costs of living.

They include keeping the economy competitive, diversifying sources of supply for goods, focusing on giving help to those with less and working with social enterprises.

 
 
 

Acknowledging that Singaporeans in other income groups too hope for help in areas like education and housing, he said this is already being done, although the amount of subsidies or assistance is tiered based on people's needs.

While this is politically more difficult, it is the economically and socially sound thing to do, he said.

Giving the same help to everyone without discrimination "also cannot be the wisest way to expend our finite resources to help those who need more", he said.

"Ultimately, we must forge a social consensus on how much we want to tax the general public, to support the desired groups in a targeted manner."

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