Cost-of-living package leaves out firms; unsustainable to ‘permanently subsidise’ them: Lawrence Wong
BUSINESS costs may have gone up, but the government cannot permanently subsidise firms that are not self-sustaining or profitable, said Finance Minister Lawrence Wong, when asked why the new S$1.1 billion support package does not include anything for businesses.
“What’s important for businesses is to continue to restructure, continue to focus on moving up the value chain, be more efficient, be more productive,” said Wong, who is also deputy prime minister.
He was speaking on Thursday (Sep 28) at a press conference, at which he announced the Cost-of-Living Support Package aimed at helping Singaporeans – especially lower to middle-income families – cope with rising costs.
News of the package follows national water agency PUB’s announcement that it would raise the price of water by 18.2 per cent, or S$0.50 per cubic metre, in the next two years to keep up with “substantially” higher costs of production and supply.
The package includes an S$800 million top-up to the Goods and Services Tax Assurance Package, bringing the total for the GST Package to more than S$10 billion. This includes a one-off cash payout of up to S$200 for eligible Singaporeans, more Community Development Council vouchers, as well as rebates to offset utility bills.
Asked why the package offers no support to businesses even though they face higher costs, Wong replied that rather than subsidising businesses directly, the upcoming Budget 2024 will include ways to help businesses scale up and become more productive and efficient.
“We all know that Singapore is not a cheap place to do business,” he said. Businesses must carefully consider the best way to operate – “which parts may be done overseas, which parts may be done within Singapore” – and what is viable in Singapore’s operating environment.
When asked whether businesses might pass on their higher costs to consumers, further driving up inflation, Wong acknowledged that some might do so: “If indeed business costs have gone up, then clearly, it’s not sustainable for the business to run on a deficit. They will have to make themselves viable, so some of this will be reflected, ultimately, in inflation.”
That is why the government has chosen to roll out the support package to mitigate the impact of higher inflation on consumers, particularly those of lower and middle incomes, he added.
Copyright SPH Media. All rights reserved.
