On November 7, 2023, Workers’ Party (WP) Members of Parliament (MPs) called for a comprehensive review of Singapore’s policies to address the increasing cost of living, advocating for structural reforms beyond temporary financial handouts. The motion, spearheaded by WP Leader Pritam Singh and MP Louis Chua, aimed to urge the government to explore innovative measures to alleviate financial pressures on citizens in light of ongoing inflationary trends.

In response, Senior Minister of State for Finance Chee Hong Tat defended the government’s existing policies, asserting that they are functioning effectively and that any proposed alterations might lead to negative consequences. Chee emphasized that while one-off financial support can be beneficial, more permanent structural adjustments are necessary for long-term relief. He stated that the government remains prepared to support Singaporeans facing cost-of-living challenges, but highlighted that changes to established policies could disrupt current progress.

WP MPs proposed several specific measures to help mitigate rising expenses. Suggestions included implementing a tiered pricing structure for utilities like water and electricity, promoting off-peak consumption through differentiated rates, and increasing MediSave top-ups to reflect inflationary pressures. Other proposals encompassed a reassessment of public health means-testing criteria, a review of the public transport framework, and strategies to manage Certificate of Entitlement and housing costs.

Chee rejected the idea of tiered pricing for utilities, explaining that such changes could distort the incentive for conservation and ultimately place an unfair burden on users. He reinforced that the government’s pricing structure for water and electricity is designed to recover full costs while maintaining affordability through targeted subsidies. Furthermore, he acknowledged the global nature of inflation but emphasized Singapore’s commitment to preserving fiscal sustainability amidst rising costs.

Before the discussion concluded, the ruling People’s Action Party (PAP) proposed amendments to the WP motion, emphasizing that the cost of living is a universal concern and reiterating the importance of fiscal prudence. WP MPs opposed these amendments, arguing that they minimized the government’s potential role in reducing the financial burdens faced by Singaporeans. Singh asserted the need for a forward-looking approach to tackle the cost-of-living crisis rather than merely relying on short-term relief.

The amended motion was ultimately passed, though WP MPs voiced their dissent. As part of the ongoing discourse surrounding the cost of living, WP representatives also questioned the necessity of an upcoming Goods and Services Tax (GST) increase set for January. They highlighted the government’s ability to provide off-budget support packages as a potential alternative to tax hikes.

In response to calls for reducing the GST back to 7%, Chee reaffirmed the government’s position on the need for the tax increase, stressing the importance of maintaining fiscal responsibility, especially with anticipated rises in social spending. The debate continues as Singapore grapples with the complex challenges posed by inflation and the rising cost of living.