Singapore’s PM Lee lays out plan to curb rising living costs

Lee Hsien Loong speaks during an Economic Club of Washington discussion in Washington, DC, US, in October 2017. (Bloomberg pic)

SINGAPORE: Singapore’s government will ensure the cost of housing, health care and education remains affordable as households worry about rising living costs, Prime Minister Lee Hsien Loong said.

While the economy is doing well, unemployment is relatively low and wages have increased, many Singaporeans still feel their incomes aren’t sufficient to cope with higher costs, Lee said in his annual National Day Rally speech on Sunday. He cited several reasons for this, including young families spending on housing and pre-school education, medical costs for the elderly, lifestyle costs, such as travel and food, and inflation.

Lee laid out changes to government schemes on health care and housing, some of which will only be implemented many years from now and will require “large expenditures.” The initiatives will stretch over 50 years or more, affecting future generations, and requires a “thriving economy and sound government finances,” he said.

Details outlined by Lee in his speech:

Water: The cost of producing clean water increased significantly over the years. Water will always be a precious and strategic resource, and a sensitive foreign policy matter for the nation. The government needs to build more desalination plants to produce clean water in Singapore.

Electricity tariffs: Fixing electricity prices isn’t financially sustainable, not best way to help low-income families.

Consumer goods: To help curb the price of infant milk formula, the government has set up a task team to, among other things, simplify import processes and tighten regulations for labelling. Average prices of formula milk have dropped.

Food centres: Since many Singaporeans eat out, the government will be building more of the popular food centres. It will also nominate “hawker culture” to be included on the UNESCO’s cultural heritage list.

Global tensions: There are no winners in a trade war, and small, open economies are vulnerable. Singapore will suffer “collateral damage.” In an uncertain global environment, ASEAN becomes more important for Singapore, especially Malaysia and Indonesia.

Malaysia: The new government of Prime Minister Mahathir Mohamad wants to review some infrastructure projects with Singapore, including deferring the high-speed railway. Both sides have to carry out what has been agreed to, unless there’s an agreement to change the terms. Mahathir also wants to review the 1962 water agreement with Singapore, but Lee said that agreement is sacrosanct and must proceed strictly in accordance with its terms.

Health care: Community health assist scheme will be extended to all Singaporeans with chronic conditions regardless of income and more polyclinics will be build across Singapore to improve access.

Elderly care: Financial support for long-term care will be extended by revamping the current ElderShield program into the CareShield Life in 2020, to cover all Singaporeans born in 1980 and younger. The government will help pay for medical costs, among other initiatives, for the post-independence generation, born in the 1960s.

Housing: 99-year leases on public housing are needed to be fair to future generations, since there would be a shortage of housing if land was sold on freehold. Upgrading of public housing blocks will be extended to those built up to 1997. The first phase of the upgrade will cost the government more than US$4 billion. A new voluntary scheme will also be introduced in 20 years time to allow residents to vote on redeveloping housing estates before the 99-year lease expires.