Budget 2017: Defer water price hike, relook help for middle class, say MPs

Budget 2017: Defer water price hike, relook help for middle class, say MPs

Some MPs asked for a stay on the water price increase, while others suggested that home type should not be used as a proxy for measuring wealth.

Tap water
File picture of tap water. (Photo: AFP/VOISHMEL)

SINGAPORE: The water price increase and helping the middle class cope with the rising cost of living were among the issues brought up by Members of Parliament (MPs) on Tuesday (Feb 28), the first day of Parliament’s debate on the Budget statement.

MPs also pointed out the need to relook the Government’s approach of looking at home type as a measure of determining the distribution of grants and support.

"DEFINITELY NOT A GOOD TIME" TO INCREASE WATER PRICES

In his speech, MP for Mountbatten Lim Biow Chuan asked the Government to consider a stay on the water price increase for this year. In his Budget statement, Finance Minister Heng Swee Keat had announced that water prices would be increased by 30 per cent in two phases over the next two years.

While Mr Lim noted that “there is never a good time” to raise the prices of utilities, it is “definitely not a good time”, given the economic uncertainty.

He pointed out that the price increase appears to have distracted many Singaporeans from “much more important messages”, like how to plan for one’s future, and the fast-changing world.

“Water is critical to our survival and we need to take adequate measures to conserve water, but sadly, the 30 per cent increase in prices seems to have distracted from the main intent of the Budget,” he said. “And due to rumour-mongering, many people seem to have been so caught up and concerned about the increase that they seem to have forgotten or ignored the various other measures the Government has introduced to help mitigate the price increase.”

He added that if it is not possible to defer the price increase, he hopes the Government can ensure that businessmen do not profiteer from it. One way they can do this, he said, is to set up a committee against profiteering, similar to the one that was set up when the GST was raised.

MP for Nee Soon GRC Henry Kwek also spoke about the water price increase and its impact on the cost of living, adding that he has seen the water bills of some hawkers in his constituency.

“I saw the bill for an entire coffee shop with six stalls. On average, each stall is using about 50 cubic metres of water a month, which costs around S$100,” he said. “With the new water tariff, each stall will see an increase of around S$30 a month.”

From this, Mr Kwek noted that it is unclear if the water price increase will lead to a significant increase in the cost of living. Nevertheless, he called on the Government to continue monitoring the situation to see if any further tweaks are necessary.

The issue was also brought up by Workers’ Party MPs, with Non-Constituency MP Leon Perera commenting that the timing of the water price increase was “more synchronised to the political cycle than the economic cycle”.

HOME TYPE SHOULD NOT BE PROXY FOR MEASUREMENT OF WEALTH

MPs also raised concerns about middle-income Singaporeans and retirees who may not benefit from the support measures outlined in the Budget.

“Our current approach uses size and the value of housing type as the primary factor for qualification,” MP for East Coast GRC Jessica Tan said. “The criterion is also not based on ownership but the type of housing you live in.”

“While logical, this may no longer be as valid or accurate, as there are some living in HDB flats who may be more well-off than someone living in a private property.”

Mr Lim pointed out that there are professionals, managers, executives and technicians (PMETs) living in condominiums and five-room flats, as well as retirees who live in private homes which they bought after saving for many years.

He explained that these retirees have to rely on their savings or their children to provide for them, while the income of PMETs is unlikely to rise due to wage freezes in many companies. Yet, this group may not benefit from many of the support measures in the Budget, he added.

“They feel they have been left out in this Budget,” he said. “They feel penalised simply because they were trying their best to live their aspirations in the past."

“I urge the Government to consider ways in which we can allow the retirees and middle-income Singaporeans to share and enjoy the growth of the country and move forward as a nation,” he said. “We should find more equitable ways to share and redistribute the country’s wealth, rather than relying on home type as a proxy for measurement of wealth.”

Ms Tan made a similar point. While she stressed that she is not asking to increase the number of people receiving help, she said there is a need for the Government to relook the distribution of subsidies to ensure that “those who do need help are able to receive it”.

MP for Ang Mo Kio GRC Darryl David made a similar suggestion in relation to the increased CPF Housing Grant. It was announced in Budget 2017 that first-timer couples looking to buy a resale flat will now get higher grants, which are pegged at S$50,000 for those who buy four-room or smaller flats, and S$40,000 for couples who buy five-room or larger flats.

Mr David said he appreciated the rationale that the Government would not want to provide too much in subsidies for those who buy bigger flats, as they are likely to be from a higher income group. But he said it cannot ignore that some higher-income consumers may choose to purchase a more expensive four-room flat due to its location, age and other factors.

“Conversely, some consumers with a lower income might have to purchase a five-room flat, as opposed to a more expensive four-room flat in other locations due to their family requirements,” he added.

Instead, he suggested that the Government provide a percentage grant based on the purchase price of the flat. “This amount would be subject to an absolute ceiling amount, and whichever amount is higher would then be given to the qualifying purchaser as the housing grant,” he said.

Mr David also expressed his hope that the Government could review its existing assistance schemes from time to time so that it can remain responsive to people’s needs. To that end, he suggested that the Government consider setting aside an escrow fund held by a statutory board or ministry, and allow them to implement a one-off support scheme whenever the need arises.

“This would give the Government an additional channel to remain responsive to rising cost and potential hardship that Singaporeans might face,” he added.

Source: CNA/lc

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