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Government tackling cost-of-living pressures, but citizens will feel strain due to lifestyle changes: PM Lee

SINGAPORE — Detailing what the Government is going to do to alleviate cost of living pressures, Prime Minister Lee Hsien Loong said on Sunday (Aug 19) that it will ensure that housing, healthcare and education are affordable as these are major spending for Singaporeans.

SINGAPORE — Detailing what the Government is going to do to alleviate cost of living pressures, Prime Minister Lee Hsien Loong said on Sunday (Aug 19) that it will ensure that housing, healthcare and education are affordable as these are major spending for Singaporeans.

However, there are cost increases that cannot be prevented completely, such as water and electricity prices. As living standards improve and lifestyle of Singaporeans changes, these have also added to the pressures.

Speaking during his speech in Mandarin for the National Day Rally, Mr Lee noted that Singaporeans still feel cost-of-living pressures despite significant improvements in their lives compared with the generation in the country's early years after independence. "They sense that they have to spend more, that their earnings never seem to be quite enough," he said.

These include young families worrying about the costs of housing and education for their children, and the "sandwiched" generation — who have to care for young children and aging parents — and their concerns about healthcare and education costs, lifestyle changes and price increases.

Mr Lee assured Singaporeans that the Government will make sure housing, healthcare and education are affordable so that Singaporeans do not have to worry about them.

Even then, as it tries to keep inflation low and prices stable, the Government cannot completely stop prices from going up.

For instance, the Government had put off raising the price of water for as long as it could. Water prices went up by 30 per cent since July this year, the first price hike in two decades.

This was because the cost of producing clean water has increased significantly over the years, Mr Lee said.


On electricity tariffs, he pointed out that today's tariff is lower than that 10 years ago, even though it went up recently. Electricity tariff today is 23.65 cents/kWh compared with the 25.07 cents/kWh in 2008.

"Unfortunately, we all remember vividly when the electricity tariff goes up. But when the tariff comes down, we forget quickly," he added.

The Government cannot control electricity tariffs because Singapore imports natural gas to generate electricity. Such imports are based on global oil prices.

Fixing the rate of electricity tariffs also involves costly subsidies that are not financially sustainable, and it allows those who consume more — the wealthier families — to receive more subsidies.

Instead, the Government found that a "more effective way" to help low- and middle-income families was through giving direct subsidies for their utilities bills in the form of U-Save rebates, he said.

While the Government does its part, Mr Lee urged Singaporeans to fulfil their own responsibilities by saving water and electricity, shop around for the best prices, and be a smart consumer.


Cost of living has gone up due to lifestyle changes among the population as well. Air-conditioners have become “everyday necessities” and overseas vacations have also become more common, Mr Lee said.

"Our standards of living have gone up. This is a positive development because it means that our lives have improved. However, to sustain this higher quality of life, people are spending more than before, and this can put pressure on households."

He pointed out that unlike in the 1990s, many Singaporean families today no longer use and pay for fixed phone lines that cost about S$100 a year.

Instead, every family member owns a mobile phone and telecommunications bills will go up.

For instance, the Chinese Development Assistance Council noticed that some low-income families chalked up telecommunications bills that come up to S$300 a month, which was more than 10 per cent of their household incomes.

The self-help group has been giving these households financial advice and suggested ways to lower their bills.

With more dual-income families, Singaporeans have no time to cook after working and find it more convenient to eat out. While the change is understandable, Mr Lee pointed out that eating out also costs more than cooking at home and drives up the cost of living.

To help manage these costs, the Government has been building more hawker centres. Seven new ones were built in the last few years and another 13 will be ready by 2027.

Another noticeable lifestyle change is how parents "spare no expenses" to buy expensive brands of infant milk formula to supplement mothers' breast milk.

"Infant formula makers have taken advantage of this to develop all sorts of premium brands. They have also marketed aggressively, misleading parents into thinking that if it is more expensive, it must be better," he added.

The Government has since set up a task force to tackle this issue, such as simplifying import processes and bringing in more brands and parallel imports. It will tighten regulations on the labelling of infant formula as well.

A campaign was launched to educate parents that pricier infant formula is not necessarily better. There are now more reasonably priced options, Mr Lee said.

"Average prices of formula milk have dropped. More importantly, young parents are better informed and are able to make better choices, based on their needs and budget.

"Therefore they can save money, reduce the cost of living, and (be) under less pressure," he added.

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