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BUDGET 2017

Business, household costs top concerns

Wednesday, March 1, 2017 - 05:50

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Business and household costs are top of the concerns raised by Members of Parliament on the first day of Budget 2017 debate.

Singapore

BUSINESS and household costs are top of the concerns raised by Members of Parliament on the first day of Budget 2017 debate.

At least eight out of 17 backbenchers who spoke on Tuesday touched on the rising costs such as the impending water tariff hike and diesel tax, which could send business costs soaring.

Subsequently, they also feared that the costs could be passed down to the consumers, which made the squeeze, especially for middle income earners, even tighter.

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Some even questioned the timing of the hike in prices, such as Non-Constituency MP Leon Perera, who noted that the "timing of these price hikes seem more synchronised to the political cycle than to the economic cycle".

Quipped Mr Perera: "Hitting the economy with these multiple price hikes within the space of a few months may make good political sense, because people have three years to forget them before the next General Election."

MP for Mountbatten Lim Biow Chuan appealed for a stay in water prices, saying it is not the right time to do so amid economic uncertainty.

And the issue has also become a distraction from the main intent of the Budget, he said.

He said: "Many people seem to have been caught up and concerned over the 30 per cent water price increase such that they seem to have forgotten or ignored the various other measures to help Singaporeans mitigate the price increase.

"If it is not possible to defer the water price increase, then I hope the government will consider measures to ensure that businessmen do not profiteer from the water price increase."

Nominated MP Thomas Chua, who is also the president of the Singapore Chinese Chamber of Commerce and Industry, flagged rising costs as the greater concern of businesses.

Mr Chua, who spoke in Mandarin, said that while businesses understand the reason behind the price hikes, they feel that infrastructure is part of public service and should not be computed on a commercial basis.

He also cautioned that if businesses are unable to raise their competitiveness and increase their profits, tax returns will also not rise.

He said: "Similarly, the government's investments are linked to the economic situation. If the economy is bearish, then there would be no magical formula to turn stone into gold."

Mr Lim said that businesses are not expecting handouts but hoping for a less costly business environment. He appealed for additional measures such as rental rebates to defray rising rentals or property tax relief that must be passed on to the tenants.

Mr Lim also noted that many small and medium enterprises (SMEs) are unaware of how the SME Working Capital Loan works and highlighted the perception that it is not easy to get such loans. Thus, he asked for plans to reach out to these businesses.

Non-Constituency MP Dennis Tan said that the cost of diesel tax will increase transport costs and will inevitably be passed on to consumers.

Referring to rising costs of households, MP for Ang Mo Kio GRC Darryl David said that there are too many bullets to bite at one go.

Mr Lim raised the concerns of the middle income group, whom he said felt left out in this Budget and is being penalised for trying their best to live their aspirations in the past.

He said professionals, managers, executives and technicians (PMETs) face price hikes and also job insecurity, and yet may not benefit from many of the support measures.

Said Mr Lim: "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."

Similarly, Non-Constituency MP Daniel Goh also flagged that middle income households do not benefit from enhanced financial transfers and thus feel the impact of rising living expenses head-on.

Pritam Singh, MP for Aljunied GRC, who crowdsourced ideas for his water hike speech using his Facebook, was concerned with how the government prices water and its long-run cost imperatives.

He said: "This would be important as the water price hikes occurred on the back of many other municipal prices increases which could arguably have been better phased to reduce the impact on the average Singaporean for whom cost of living issues are an increasing concern."

Nevertheless, MP for Holland- Bukit Timah GRC Liang Eng Hwa said spiralling prices of water and diesel are irreversible trends.

He said: "So rather than look for short term painkillers, let's tackle the problem head-on and collectively work on alternative longer-term solutions."

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