Feb 4, 2005
Reply from the Prime Minister's Office
By Chen Hwai Liang
Press Secretary to the Prime Minister
THE writer argues that Government statistics do not give an
accurate picture of Singaporeans being squeezed by high costs of
living. Although he did not say so, he was referring to data
released by Prime Minister Lee Hsien Loong in Parliament
recently.
The writer is not alone in his perception; many Singaporeans share
this view. I therefore thank him for raising the issues, and giving
the Government another opportunity to explain the situation and
narrow the gap of understanding.
There is no doubt that in recent years many Singaporeans have had
to tighten their belts and some have faced real hardship. Some have
lost their jobs, and many more have had to work extra hard to
support their families. The reason has been the difficult economic
conditions - salaries stagnant, overtime and bonuses down,
retrenchments up, and jobs uncertain.
The Government recognised and responded to the problem. It
implemented many measures to help households tide over the
difficult period. We gave rebates on HDB rentals, service and
conservancy charges, and utilities bills. We are helping workers to
upgrade their skills, find new jobs, and get back on their feet. We
are giving assistance to those who cannot work. Most importantly,
we are restructuring and upgrading the economy, and have restarted
growth, which will create prosperity for all.
It would not be correct to blame the difficulties that households
face on the high cost of living, which in turn has resulted from
government policies. Some prices have indeed risen, while others
have come down. To households, no cost increase is welcome,
especially in tough times. But we have to look at the overall
impact of the price changes, to see how significant they have been.
And to do that we have to study the statistics.
The writer is right that statistics do not tell the whole story. In
their nature, statistics cannot reflect the situation of every
individual or household. However, statistics do reliably summarise
the reality in Singapore, because they are based on information
painstakingly gathered from thousands of individual shops, hawker
stalls and households. Singaporeans should not dismiss these
statistics but should examine them objectively.
The writer cited examples on hawker food, public transport, health
care and leisure, to show how life is getting tougher for
individuals. However, his anecdotes are not representative of the
actual experience of middle- and lower-income Singaporeans. If we
examine the facts more carefully, we will find that for most
Singaporeans, the cost of living has not risen by much.
Food prices
THE writer correctly noted that many families now eat out at hawker
centres and food courts. He suspected that while food prices
overall had been stable, prices of hawker food had shot up. But
this is not so. Since 1998, prices of hawker food have risen by
only 4.2 per cent on average, less than non-cooked food (5.6 per
cent). This is confirmed by detailed information about different
types of hawker food.
For example, prices of fish ball noodles increased by 2.3 per cent,
mee goreng by 5.5 per cent, and chicken rice by 6.6 per cent. In
many hawker centres, prices of common dishes such as prawn mee soup
and char kuay teow have remained unchanged at $2.00 or $2.50.
Transport and communication
THE writer acknowledged that telecommunications services had indeed
become cheaper, but he was mistaken to dismiss this as the natural
result of competition which had benefited companies more than the
public. This competition was the result of deliberate government
policy to bring down prices and offer consumers more choices. Had
the Government not done this, I doubt so many Singaporeans could
have afforded handphones. Nine out of 10 households here own
handphones, more than almost any other country.
The writer also questioned whether the picture was as rosy for
public transport. While public transport fares have increased, the
increases have been moderate. The Public Transport Council has
scrutinised the increases to ensure that they were justified and
affordable to commuters. Thus the average bus trip cost $1.00 in
1998 and $1.03 today, while the average MRT trip cost $1.15 in 1998
and $1.24 today.
While fares have increased, services have also improved. Before the
North-east MRT Line, a typical bus journey from Sengkang to Dhoby
Ghaut cost $1.23 and took 50 minutes. Now, the same journey by MRT
costs $1.49 and takes 25 minutes. For 26 cents more, commuters save
25 minutes of travelling time.
For middle-income households, car prices have come down
substantially. A typical 1.6-litre car cost over $100,000 in 1998,
but only $65,000 now. This is a result of Government lowering
upfront taxes, and investing in transport infrastructure so that we
could release more COEs and allow more cars onto the roads.
Health and medical expenses
HEALTH care costs are indeed a big worry for many citizens. They
have risen, but not because the restructured hospitals are chasing
profits. This is a worldwide problem. Even in China, a communist
country, many people cannot afford basic medical care. The basic
reason is that medical science is advancing and introducing new
treatments and better but more expensive drugs. At the same time,
our population is ageing and needing more medical care.
In Singapore, the Government subsidises hospital bills heavily. In
addition, we are revamping MediShield, doubling the Medifund from
$1 billion to $2 billion, and channelling more aid to the needy.
But we hope Singaporeans will take care of themselves and lead
healthy lifestyles.
Avoid unnecessary spending
WE AGREE fully with the writer that public buildings should not be
ostentatious, and the Government should not provide and charge the
people for services which they do not need. We have tightened the
budget for building government offices, and tried to make sure that
we get value for each dollar the Government spends. But
Singaporeans do expect better public facilities and higher
standards of service, and the Government ought to deliver them. If
our hospitals, schools and libraries had not improved since the
1960s, Singaporeans would justifiably be dissatisfied. As for
mobile TV on buses, they do not cost commuters anything, as the
project was initiated and paid for by MediaCorp.
High expectations
THE writer argued that there was nothing wrong with having higher
expectations, because the whole purpose of economic growth was a
better life. We agree with him. However, we need to be conscious of
how our expectations have risen, and the impact of this on
household expenses. For example, a major reason households are
paying more for electricity is that nearly three quarters of
households now have air-conditioners. The large number of
Singaporeans who travel overseas each year is another sign of how
our lives have changed. The writer argued that Singaporeans had to
travel overseas to ease the psychological pressure of life and work
in Singapore. The reasons he cited are valid, but when we start to
think of overseas holidays as being an essential, rather than a
luxury, it only shows how high expectations have risen.
The way forward
ALL Singaporeans hope and strive for a better life. We have
achieved this for many years, even though the last few have been
difficult. While costs have gone up modestly, they have not been
the main reason that households have felt pressure. Nobody wants to
turn back the clock to the days before air-conditioners or
handphones, or when only a small minority could afford overseas
travel, even though costs might have been lower then. The way
forward is to create more prosperity and growth, so that
Singaporeans can get better jobs, and attain the higher standards
of living that we all aspire to.
