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SINGAPORE: More assistance could be on the way to help needy and older Singaporeans cope with the rising cost of living.
Finance Minister Tharman Shanmugaratnam told Parliament that if finances permit, the government should have something to give these groups in this year's Budget.
Singapore's inflation rate hit a 25-year high of 4.2% in November, and this is expected to go higher this year, sparking worries of how needy Singaporeans will cope.
The finance minister said that one reason for the rising cost is the increase in the Goods and Services Tax (GST) from 5 to 7 percent last July.
But it is unlikely to have a prolonged impact on prices, said Mr Tharman.
"The GST change has caused only a one-off increase in prices and not a continuing price rise. However, this has been more than offset by the assistance package that the government provided to Singaporeans. Lower-income families have received offsets which are several times larger than the increase in their GST payouts."
However, Mr Tharman said the GST hike is not the main cause for the rising cost of living but rather the climbing oil and food prices globally.
The government will keep a close watch on the situation, he added.
Besides the rising living expenses, the MPs also wanted to know how healthcare services will continue to remain affordable to Singaporeans.
Medical inflation rate was 6.2 per cent in the past year, outstripping the national inflation rate.
Health Minister Khaw Boon Wan, in reply, said: "Some healthcare inflation is inevitable as we import most medical consumables, and wages of healthcare workers form a big part of healthcare cost. For basic healthcare services in public institutions, we will ensure they remain affordable to all Singaporeans."
Current measures include subsidies at lower class wards and ad-hoc top-ups into the Medisave account.
Spiralling property prices is another concern.
But National Development Minister Mah Bow Tan said public housing will not be beyond the reach of Singaporeans.
The HDB has been providing subsidies to first-time home buyers.
And, lower-income families receive more help through the Additional CPF Housing Grant introduced in 2006.
So far, some 4,600 households have benefited from the scheme.
Mr Mah also cited HDB records showing that new flat buyers use about 20 percent of their monthly income to service their mortgage.
This means that families can service their housing loan entirely with funds from their CPF Ordinary Account, without any need for cash outlay.
The 20 percent is also significantly lower than the 40 percent debt servicing ratio the industry uses to gauge affordability.
"However, I recognise that there has been much anxiety of late among flat buyers about rising resale flat prices. Let me assure Members that HDB is closely monitoring the situation," said Mr Mah.
HDB resale prices rose by some 17.4 percent in the last quarter last year, the highest increase in 10 years. - CNA/ir
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