Hazel Poa: Majority relying on Govt grants for living costs signals unhealthy situation

SINGAPORE: Hazel Poa, Non-Constituency Member of Parliament (NCMP) from the Progress Singapore Party (PSP), expressed her view that a situation where the majority of the population relies on government handouts to manage the cost of living is inherently unhealthy.

Ms Poa conveyed this perspective while participating in the Budget 2024 debate on Monday (26 February), highlighting the persistent worry among Singaporeans about the escalating cost of living.

The newly ascended PSP’s Secretary General noted that the government currently assists Singaporeans in dealing with GST and cost of living increases through cash grants, rebates, and vouchers.

This has led to a situation where a significant portion of the population regularly receives government handouts.

Acknowledging the support measures outlined in Budget 2024, as announced by Deputy Prime Minister Wong on 16 February, with no additional major tax increases disclosed, Ms Poa cautioned that while short-term support is appreciated, the PSP maintains that these measures do not provide long-term solutions addressing the root causes of the rising cost of living.

“In any society there will always be people with different income levels and it is normal for government to give grants to the lower income families.”

“But if the bulk of the population need government handouts to cope with cost of living, then that cannot be a healthy situation, ” she cautioned.

Ms Poa suggested that Singapore should be cautious about the normalization of the idea that it’s common for the majority of the population to receive government handouts.

“It may be the easier route to provide handouts to cope with the cost of living, but we must focus on taking steps to keep costs in check. ”

Ms Poa identifies internal factors fuelling rising costs in Singapore

In her view, while external factors like global forces (such as oil prices, food prices, disruptions to supply chains due to pandemics, wars, or climate change) contribute to rising prices, there are also internal factors within Singapore driving costs, including property prices, Certificate of Entitlement (COE) prices, population policies, and government taxes.

Ms Poa specifically points out the escalating rent as a fundamental cause of the increasing cost of living, particularly affecting the retail and food and beverage sectors.

To address this issue, she calls on the government to intervene by implementing guidelines on reasonable annual rent increases, drawing a parallel to the National Wage Council’s guidelines on wage increases.

On home prices, Ms Poa reiterated PSP’s proposal on the affordable home scheme in which HDB flat prices do not include the land cost component for homebuyers upon their first purchase, with the land cost deferred until they sell their flats.

“This will greatly ease the burden of housing costs on young people and allow them to more easily build up their retirement savings. ”

She also proposed the government to reconsider exempting a list of basic necessities from GST to alleviate the impact on lower and middle-income families as GST rates increase.

Ms Poa argued that land sales impact HDB prices, adding to the challenges faced by home buyers.

While additional grants make HDB flats more affordable, Ms Poa noted the taxpayer burden, urging a strategic approach.

Ms Poa reiterated PSP’s proposal: treating land sales proceeds as revenue and dividing them over the duration of the lease, which could potentially relieve the tax burden on Singaporeans.

Ms. Poa found it encouraging that the Prime Minister acknowledged this proposition during the recent public finances debate.

She said PSP welcomed the SkillsFuture Level Up program announced by DPM Wong. This initiative involves a S$4,000 top-up in SkillsFuture Credit specifically allocated for selected courses catering to Singaporeans aged 40 and above.

“We believe that full-time training will be more effective in enhancing the employability of our workers. These policies will also enable our middle-aged workers to switch careers more easily and move into areas with better or more job opportunities.”

Nevertheless, she expressed disappointment over the delayed release of details for the Temporary Financial Support Scheme, underscoring the critical need for prompt implementation to provide crucial financial assistance to workers facing retrenchment.

Ms Poa has raised concerns regarding the potential impact of the period of unemployment on the size of the training allowance for retrenched workers entering full-time training.

She calls for government confirmation, emphasizing that the training allowance should be based on the last drawn pay when these workers were employed.