Workers’ Party Leader Pritam Singh calls for structural changes to alleviate cost-of-living pressures for Singaporeans

SINGAPORE: Speaking in Parliament on Tuesday (7 Nov), Mr Pritam Singh, Workers’ Party chief and Leader of the Opposition, emphasized the party’s proposal to move beyond one-time fiscal handouts and explore possible structural changes to existing policies to reduce cost-of-living expenses for ordinary Singaporeans who will live in an elevated inflationary and interest-rate environment for some time to come.

Delivering his opening speech, Mr Singh shared the Workers’ Party’s concerns about the challenges faced by low to middle-income families, especially those with young children and elderly parents to care for.

He said the WP will look into possibilities of further reducing cost of living pressures by way of policy change.

“This House must leave no stone unturned, because for some Singaporeans this has become a cost-of-living crisis. ”

He mentioned that while MAS forecasts a slowdown in inflation, the actual experience on the ground for many Singaporeans indicates otherwise.

He referred to a parliamentary reply by the Ministry of Manpower, which revealed a 4.5% fall in real median income in the first half of 2023, further emphasizing the challenges faced by citizens.

Mr Singh pointed out that the Consumer Price Index, which measures inflation, does not consider non-consumption expenditures such as loan repayments, property purchases, and monthly mortgage and credit card debt payments.

He also stressed the compounding effect of price increases, especially when businesses pass their increased costs onto consumers.

“What was cash-in-hand not too long ago has now, and in the future, to be used for interest payments. This reality reinforces the view that prices are galloping away and that incomes are struggling to catch up.”

He highlighted the different impacts of rising prices on various households, depending on their consumption patterns. For example, families with young children face increasing costs for education and other child-rearing expenses, while those reliant on vehicles for work are particularly affected by rising fuel prices and Certificate of Entitlement (COE) costs.

Pritam Singh discussed the recent government support package and again questioned the necessity of the upcoming Goods and Services Tax (GST) hike, citing the government’s seemingly strong fiscal position as suggested by the timing of the support package announcement.

“The PAP’s argument is that a GST hike is necessary and that this is a political decision it has taken.”

“But given the inflationary environment and the substantial effects on the ground, the Workers’ Party calls for a review of this decision in light of the cost-of-living crisis, ” Mr Singh added.

“Like the many other increases announced over the last month, there is real concern that a one-percent rise in GST will have yet another knock-on consequence on prices on the ground from January next year.”

He raised the Workers’ Party’s intention to propose structural changes to existing policies to alleviate the cost-of-living burden for ordinary Singaporeans, particularly those in the low-income and middle-income groups.

Advocates for enhanced water pricing system for sustainable consumption practices

Pritam Singh advocated for a revisiting of the water-price tiers, suggesting a more accurate alignment of domestic water tariff tiers with actual household consumption patterns.

He highlighted the historical context of the restructuring of water tariff tiers, emphasizing that the last restructuring exercise took place over four years from 1997 to 2000, resulting in a significant price increase of over 120%, primarily motivated by concerns about a potential water shortage following the expiration of the 2011 Water Agreement with Malaysia.

He referenced the government’s objectives at that time, which included instilling a sense of water conservation as a way of life and addressing Singapore’s anticipated water scarcity.

Furthermore, Mr Singh discusses the changes in the water tariff structure for households before and after the restructuring in 2000. Prior to the restructuring, there were three tiers of water prices for domestic use based on different consumption levels.

Pritam Singh explained the changes in the water pricing structure that occurred in the year 2000, leading to the elimination of the three-tier system for domestic users and the adoption of a two-tier system.

He argued that this shift resulted in the majority of households being charged within a broad 0-40 cubic meters band, with limited differentiation in pricing based on consumption levels.

He raised the issue of the Water Conservation Tax and its impact on incentivizing water conservation, highlighting the need for a more progressive Water Conservation Tax regime across different consumption tiers to encourage water-saving behaviors.

Pritam Singh proposed the introduction of a more finely determined tariff structure, including distinct tiers for water consumption levels, along with a graduated Water Conservation Tax regime for households and businesses.

He suggested specific ranges for each tier, with corresponding Water Conservation Tax percentages, intending to create a fairer and more targeted approach to incentivize water conservation.

“A graduated Water Conservation Tax across the various tiers would incentivise water conservation and continue to serve the policy purpose of ensuring that water is continually treated as a scarce commodity. ”

“With this more accurately tiered water-pricing regime, the quantum of fiscal support provided through GST U-Save vouchers can be reduced proportionately.”

Additionally, he recommended exploring the possibility of introducing tiers for non-domestic consumers to promote a shared objective of water conservation between households and businesses.

He emphasized the need for a fresh perspective to assess the fairness and effectiveness of the current water pricing structure for non-domestic users.

Calls for overhaul of Workforce Income Supplement to aid low-income workers

Pritam Singh discussed additional policy changes that could be implemented to alleviate the cost-of-living crisis.

He highlighted the proactive measures taken by some businesses, such as Prudential Singapore and DBS Bank, in providing ongoing support for their employees beyond one-time assistance.

He emphasized the need for the government to review and adapt its existing schemes to effectively support Singaporeans against the ongoing challenges posed by rising prices and the upcoming Goods and Services Tax (GST) hike.

“If businesses can adjust their policies beyond one-time support, the Government certainly can do more too, ” he said.

Pritam Singh proposed a reevaluation of the Workforce Income Supplement (WIS) to provide greater financial relief for low-income workers, especially in light of the current inflationary environment.

He suggested a potential shift in the weightage of the WIS, favoring a higher cash payout, particularly for self-employed individuals who currently receive a lower cash component compared to their CPF contribution. He emphasized the importance of providing additional cash support for workers, especially those at the lower income deciles.

” As wages traditionally do not move as fast and in significant quantums for Singaporeans at the lower deciles, additional cash in hand will provide much-needed relief for our workers who are sensitive to the needs of the hour. ”

“A few hundred extra dollars for seniors who continue to work and for whom WIS payments are pegged at the highest tiers, can make a world of difference to their lives. ”

Pritam Singh stresses prudent Medisave utilization amid rising medical costs

Furthermore, he brought attention to the issue of Medisave utilization for outpatient treatments among older Singaporeans.

Referencing previous discussions on this topic, he highlighted the possibility of allowing seniors with healthy Medisave balances to use these funds for outpatient treatments, possibly by pegging the withdrawal limit to the amount seniors have in their Medisave accounts.

He cited data that indicated a substantial number of seniors had significant amounts of funds left in their Medisave accounts upon their passing, suggesting the feasibility of a more flexible approach to Medisave utilization.

“Arising from a parliamentary question filed by Ms Hazel Poa in late 2020, we know that individuals aged 85 and above have on average about $6300 left in their Medisave accounts upon their demise. A more acute set of data was presented by the Ministry of Health arising from a PQ by member Patrick Tay.”

“This data revealed that for Singaporeans who passed away aged 85 or older between 2017 and 2021, about 20% had $1,000 or less left in their Medisave accounts and 50% had between $1,000 and $10,000 left. ”

“Of greater interest is the fact that 10% had between $10,000 and $20,000 left, another 10% had between $20,000 and $30,000, and the last 10% had more than $30,000 left in their MediSave accounts.”

In his speech, Mr Singh further emphasized the need for careful consideration of the optimum level of Medisave utilization to account for medical inflation and to prevent premature depletion of Medisave accounts.

He acknowledged the potential challenges for seniors with lower Medisave balances, suggesting that a more flexible approach could benefit those who have to manage the impact of the cost of living, particularly if they are no longer actively employed.

A motion was filed to debate the issue during the Parliamentary sitting on Tuesday (7 Nov), emphasising the recurrent concerns raised by the public during their numerous grassroots interactions, with the cost of living consistently at the forefront.

The motion filed by the WP, titled “𝐂𝐎𝐒𝐓 𝐎𝐅 𝐋𝐈𝐕𝐈𝐍𝐆 𝐂𝐑𝐈𝐒𝐈𝐒: 𝐓𝐡𝐚𝐭 𝐭𝐡𝐢𝐬 𝐇𝐨𝐮𝐬𝐞 𝐜𝐚𝐥𝐥𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐭𝐨 𝐫𝐞𝐯𝐢𝐞𝐰 𝐢𝐭𝐬 𝐩𝐨𝐥𝐢𝐜𝐢𝐞𝐬 𝐬𝐨 𝐚𝐬 𝐭𝐨 𝐥𝐨𝐰𝐞𝐫 𝐜𝐨𝐬𝐭 𝐨𝐟 𝐥𝐢𝐯𝐢𝐧𝐠 𝐩𝐫𝐞𝐬𝐬𝐮𝐫𝐞𝐬 𝐨𝐧 𝐒𝐢𝐧𝐠𝐚𝐩𝐨𝐫𝐞𝐚𝐧𝐬 𝐚𝐧𝐝 𝐭𝐡𝐞𝐢𝐫 𝐟𝐚𝐦𝐢𝐥𝐢𝐞𝐬,” underscores the urgency of the matter and aims to initiate a substantive debate in Parliament.

After Mr Singh’s address, Liang Eng Hwa, People’s Action Party MP for Bukit Panjang SMC, proposed modifications to the WP motion.

He suggested that the House recognize the global nature of the cost-of-living issue and urge the Government to persist in implementing policies that collectively alleviate financial burdens on Singaporeans and their families, while maintaining fiscal stability and safeguarding the interests of future generations.

Emphasizing the possibility of a prolonged global high-cost scenario, Mr Liang underscored the importance of addressing present challenges through sustainable and prudent measures.

Although being opposed by the WP MPs and Non-Constituency Members of Parliament of Progress Singapore Party, the amendments were later passed by the PAP-majority parliament.