Prices - A Relentless Spiral
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i would say that govt is the cause of inflation:
Prices - A Relentless Spiral
Creeping pre-GST price hikes tighten the pockets of Singaporeans.
By Seah Chiang Nee, littlespeck.com
Jun 16, 2007
MIDDLE class Singaporeans are being weighed down by rising costs of daily necessities that seem to show no sign of abatement.
Hardly a week passes without a report or two of some service or bread-and-butter item becoming more expensive and biting into peopleÂ’s fixed incomes.
The surge started with condos (one that cost S$1mil or RM2.2 a year ago is now S$1.3mil or RM2.9) and cars, moving to the MRT, buses, taxis, hospitals, polyclinics, mail and utilities.
The latest one hit some 750,000 households who subscribe to cable TV. They will soon have to pay S$4 more for the Basic Package – and a whooping S$15 (up from S$5) for the sports channels that televise English football.
This has got soccer fans hopping mad with some threatening to cancel subscription, an unlikely solution since cable television is a monopoly run by a single operator.
It is also the most important source of entertainment for the Singapore family, which is embittered at the arbitrary hike and the absence of a market alternative.
In recent weeks, inflation worsened as merchants jumped into the bandwagon, hiking prices in restaurants, supermarkets, food courts, coffee shops and retail outlets.
This affects the budget of every Singaporean but the hardest hit are the middle class and lower-income workers.
To put it in perspective, not all shops everywhere are doing it and those that do are not raising prices for every single item in their premises.
It is a sporadic, selective practice that depends on the person and the location. Some are reluctant to charge more for fear of losing customers.
A stall near my home has just hiked his nasi lemak and mee rebus from S$2 to S$2.20. Across the road, a glass of sugar cane water is up 20 cents to S$1.20.
In some places – but not all – chicken rice, the closest to a national dish here, now costs 50 cents more at S$3.50. Condensed milk, bubble tea and Campbell soup have become dearer.
For consumers, the worst is to come. On July 1, Singaporeans will have to pay a higher Goods and Services Tax (GST) when it is increased from 5 to 7%.
“The price increases look unstoppable and the government is either unable or unwilling to take action to deal with it,” said a retired teacher.
In the governmentÂ’s view, inflation here is largely imported or due to globalisation and represents only an insignificant rise in the Consumer Price Index.
The only watchdog, the Consumers Association of Singapore (CASE), has been a relative bystander especially when the perpetrator is the government or a Temasek-linked company.
Inflation is not only a Singaporean phenomenon. It is also threatening stronger economies like the US and China, which are considering higher interest rates to dampen it.
With an expected growth of 6% this year, Singapore is not spared.
But the governmentÂ’s strong business role and preoccupation with the bottom line are part of the dilemma.
There are other official causes. Firstly, the authorities themselves had started the ball rolling when they raised charges for public services like education, hospitals and utilities.
Secondly, the government is SingaporeÂ’s biggest landowner, owning some 70% of it and thus has a powerful say on prices. Rents in Temasek-controlled commercial and shopping properties have risen significantly.
The impact on the retail trade is inevitable.
In addition some of these linked companies operate a total or near-monopoly services that limit market competition.
“Monopolistic price increases have happened all too often,” a commentator of current affairs observed.
“It is time the ministers form a committee to look into government monopoly or cartel collusion to fix prices to ensure there is no infringement of the Fair Trading Act”.
What is more worrying is structural inflation.
As it speeds towards becoming into a global city with a large number of rich and talented foreigners, Singapore would likely take on a new high-cost structure.
Becoming another city like New York, Tokyo or Paris, stirs excitement, but the cost of living is bound to take after them as well.
The present predicament may be a sign of things to come. SingaporeÂ’s economy is gradually favouring the businessman over the ordinary worker.
Some economists think the price surge will eventually settle back when the economy slows.
“But many of the basic food prices, once raised, will not become cheaper ever again,” exclaimed a housewife. “We’re stuck with them.”
There is rumbling in the heartland where 85% of Singaporeans live. The price hikes of basic goods and services are hurting many citizens with average or low incomes.
The government is watching with some concern, although it has so far taken little public steps to combat the snowballing increases.
When the GST increase comes into effect next month, the Singaporean pocket will be hit even harder. He will have to pay a 7% tax of almost every product or service, unless an exemption is stipulated.
The authorities are dishing out S$100-S$400 a year to each adult over next four years to mitigate its impact. The poorer people get the higher sum.
Apart from possible political fallout, the government will likely want to prevent higher costs from derailing its strategy of attracting foreign investment and talent.
Already American businessmen have complained that spiralling rents are creating problems for them, forcing a number to relocate elsewhere.
Cases of condo rents at choice areas rising up to by 50-70% once a lease expires have been growing, a trend that could benefit SingaporeÂ’s neighbours. -
Our government sure has a knack for shooting themselves in their feet with thier half-baked policies... -
Can you imagine that's the handiwork of our highly efficient and capable government?Originally posted by ShutterBug:Our government sure has a knack for shooting themselves in their feet with thier half-baked policies...
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If the spiral is not managed properly it might backfire and hurt the govt ft policy.
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I read some of the foreign professional chose to sent his family home rather than having to be burdened with higher rent.Originally posted by ShutterBug:Our government sure has a knack for shooting themselves in their feet with thier half-baked policies... -
Some of the foreign professional already complaining already n some were aked to leave if they cannot afford higher rent.Originally posted by pearlie27:If the spiral is not managed properly it might backfire and hurt the govt ft policy. -
for every action there is an equal reaction..Originally posted by will4:Some of the foreign professional already complaining already n some were aked to leave if they cannot afford higher rent.
if the gahmen thinks all F.Ts would be able to absorb the price hike, then they are very wrong.. i hope the plan backfires..badly.. really badly.. that will show what a 'DOSE OF GOVERNMENT INCOMPETENCE IS REALLY ALL ABOUT'! -
There is a case in which foreign professional were advised to buy rather than rent.Originally posted by 4getmenot:for every action there is an equal reaction..
if the gahmen thinks all F.Ts would be able to absorb the price hike, then they are very wrong.. i hope the plan backfires..badly.. really badly.. that will show what a 'DOSE OF GOVERNMENT INCOMPETENCE IS REALLY ALL ABOUT'! -
The only winner with regards to the price increment is the ruling party!! May be they are thinking - you people keep complaining about us pay and pay and we are not happy also because of the declining support from you people (winning percentage dropped for the last couple of elections) - SO now we show you colour!!!! Ha ha ha, this is just my guess!!!!
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People, fellow citizens.... all who read this... make a record all price increases (medical, transport etc), tax increases etc... every major incident... I forsee prices and tax freezing in 2009, 2010, with PAP probably hoping that the flames burning in our bellies will die down or be put out.
We must not let it happen!
*raises fist in the air*
People, fellow citizens.... We shall not forget all that transpired thru he hands of the ruling party! Only been 13 months since the last GE! And all that transpired in the months to come, shall be recorded and remembered!
*raises fist in the air*
People, fellow citizens.... all this information of transgressions have to be repropagated again before the next elections! Print it out, laminate it, use it as wallpaper, pen it in your diaries, whatever suits you to remind yourselves. We will re-ignite the flames that burn inside us today! We will re-ignite the flames that burn inside us in the months to come! Spread the word! We have to make the nation remember!
Ahem... *straightens jacket* ok, just really wanted to do that at least once.
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I am somewhat convinced, that this is a classic case of "Too many cooks, spoils the soup"...
>> PM+MM -
its more like "too many crooks, poisoned the soup.." ..Originally posted by ShutterBug:I am somewhat convinced, that this is a classic case of "Too many cooks, spoils the soup"...
>> PM+MM -
Originally posted by 4getmenot:its more like "too many crooks, poisoned the soup.." ..