Bargain Hen talk cock on cost of living in SG

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An honorable member of the Coffee Shop Has Just Posted the Following:

Written by Ng E-Jay
12 May 2014

Dr Ng Eng Hen, the Defence Minister, tried to deflect the cost of living issue onto Singaporeans by claiming that the high cost of living is due to having higher aspirations in life.

He was speaking at a Singapore Medical Association dinner and was responding to a question from the audience concerning the rising cost of living in Singapore. He said, “If you look at household goods, per household, what people have — handphone, TV — has actually gone up”

Dr Ng added, “Unlike the past, mobile phones are almost an essential item for children.”

“That Singaporeans find costs of living expensive due to higher aspirations is a reason that will not please people … … as the reason is ‘objective’ and does not address ‘issues of the heart’,” said the Defence Minister.

Dr Ng Eng Hen is widely off the mark. The high cost of living in Singapore is not a matter of perception alone, and neither is it merely a result of Singaporeans having higher aspirations and expectations in life.

There are two main sources of inflation in Singapore. The first is escalating property prices, which have resulted in rapidly increasing rentals.

Businesses, faced with increased rental costs, have no choice but to pass the costs onto consumers, or risk shutting down. That is why the prices of so many of our daily necessities and conveniences of life have gone up so quickly. Hawker fare and prices at food courts have soared in recent years precisely because of rapidly rising rentals.

Rising rentals affects all kinds of small businesses like hair salons, book stores, eateries, mama shops, etc. All of them have had to raise prices in tandem with rentals in order to survive. In the end, it is the consumer who is squeezed.

The other source of inflation in Singapore is the import price of raw materials which have gone up in recent years. Not much can be done about this, but there is a lot the government could have done about escalating property prices and rentals.

Also, as society becomes more inter-connected, items like smartphones and laptops are no longer luxury items, but have become necessities of life. Those who refuse to use these products will find it harder to keep up with the rapid pace of communication and information exchange taking place today.

Small businesses and sole proprietors who avoid using these products to enhance their productivity will soon find that they cannot keep up with their clients’ needs and will start to lose valuable business opportunities.

Hence, having items like smartphones, laptops, and a broadband internet connection is no longer a luxury, but essential to individuals, as well as sole proprietors and small businesses.

Next, Dr Ng added that while the government makes sure that nobody should have their potential stunted just because their family cannot afford it, this is “difficult argument” to sell as some parents pay large sums of money to provide tuition for their children.

Firstly, Dr Ng’s tuition analogy is again off the mark. Parents sometimes feel they have little choice but to provide lots of tuition for their children because the educational system has become very competitive. Our kids these days have to compete with foreigners to get into the secondary schools and junior colleges of their choice. Competition with foreigners is the most intense for those aspiring to enter university. Under such circumstances, tuition has become a necessity for many students, and no longer a luxury that they can afford to do away with. When the system is so competitive, every edge counts and sometimes students are willing to pay the price to get ahead!

Secondly, it is highly disingenuous for Dr Ng to claim that the PAP government leaves no one behind and ensures everyone can realize their potential no matter their family background. The government has not provide enough social safety nets to help out families in need. Our welfare spending is almost non-existent. The amount of public assistance money giving to the poorest households is a crying shame. The government keeps harping on self-reliance and is up to this day still very stingy when it comes to social spending.

Unlike many developed countries where the cost of living is indeed beyond the government’s control, inflation in Singapore is instead generated by the government’s policies. The government has taken in so many foreigners but not increased the supply of housing, and social and educational services to accommodate the increased demand. It does not take a genius to figure out why prices have risen so rapidly. The government has failed to build infrastructure and increase the level of social support ahead of demand. In the end, it is the citizens who suffer.

Dr Ng’s analysis of the cost of living issues in Singapore is superficial and completely misses the point. It is the PAP government’s policies that are causing all the suffering, not our increased aspirations and expectations.

- http://www.sgpolitics.net/?p=8751


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