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The government will take "immediate" action to help Singaporeans with rising costs as a result of the war in Ukraine, Minister for Finance Lawrence Wong said in Parliament today (Apr. 4).
Wong said he would, where possible, bring forward the implementation of the Budget 2022 measures, which include the disbursement of S$100 Community Development Council (CDC) vouchers to every Singaporean household.
The vouchers will be disbursed by mid-May 2022.
Russia-Ukraine war keeping prices high
Providing an update on the economic impact of the Russian invasion of Ukraine, Wong said that global prices have already been on the rise since last year due to various supply chain constraints brought on by Covid-19.
Though there were hopes that prices would ease off coming into 2022, the Russia-Ukraine war would likely mean that global inflation would remain "higher for longer", said Wong.
Various Members of Parliament (MPs) filed questions asking whether the government will consider providing households rebates on utilities, road tax and petrol duties as a result of the increased prices.
S&CC and U-Save rebates to be disbursed this month
Wong said the S$100 CDC vouchers that will be disbursed to Singaporeans next month comes four months after the S$100 in vouchers that were disbursed in December.
The CDC vouchers will "help Singaporeans with their daily expenses", said Wong.
Wong also highlighted that the Budget had included rebates for service and conservancy charges (S&CC) and utility bills.
Wong said the first tranche of Service and Conservancy Charges (S&CC) rebates and U-Save rebates will be disbursed this month.
The rest of these rebates will be disbursed in July and October this year, and in January next year.
"This will address a key cost of living component which several members asked about," he said.
A Taxi Subsidy Scheme will also help lower income persons with disabilities who require point-to-point services to commute by subsidising up to 80 per cent of their taxi fares they pay to go to school, work or training.
Wong said this would help to cushion the impact from recent fare surcharges introduced by taxi and ride hailing app operators.
Wong also touched on the Covid-19 Recovery Grant that will help those who have lost jobs or income due to Covid-19, as well as Public Transport Vouchers (PTVs) for lower income households.
Eligible businesses will also receive the Small Business Recovery Grant by June.
"Counter-productive" to provide rebates for fuel duties
MPs Murali Pillai, Mariam Jafar, Louis Chua, Xie Yao Quan, Lim Wee Kiak, Saktiandi Supaat and Edward Chia, asked if the government can consider lowering petrol duties, or to provide rebates on petrol duties as a result of increasing petrol prices.
Wong pushed back against the suggestion and said such a move would be "counter-productive" and it "effectively amounts to a subsidy on private transport".
Explaining further, Wong said that fewer than four in 10 households in Singapore own cars. Among the lowest quintile, only about one in 10 do.
"Such subsidies on private transport would therefore benefit a relatively small but generally better off group," said Wong.
Wong also questioned the effectiveness of reducing fuel duties:
"Cutting fuel duties also means that some of the subsidies will flow back in part to producers and suppliers themselves, not just to consumers, as the pump price may not fall as much as the reduction in duty."
He added that such subsidies will also reduce the incentive to switch to more energy efficient modes of transport, "a critical element" for Singapore's plans for sustainable living.
Taxi and private hire drivers in need can approach self-help groups, Social Service Offices
Wong said he recognised that some groups, such as taxi drivers, private hire car drivers and delivery drivers, are affected by the increase in petrol and diesel prices.
He noted that various taxi and private hire operators have already implemented temporary increases in fares to help cushion the impact of higher fuel prices for drivers and to have "consumers share the burden".
He also said these companies also have "tie-ups with petrol companies" to offer fuel at discounted prices to help drivers and riders manage the higher fuel costs.
Wong then said those whose incomes are impacted and are in need of financial assistance can approach the Social Service Offices, community centres and self-help groups for more help.
Government "ready" to provide more support if situation worsens
"Overall, the better way to help Singaporeans cope with the rise in petrol prices, as with inflation in general, is to provide them with the support measures that we have catered for in the Budget," said Wong.
Wong said the measures extend "concrete, tangible help directly to Singaporeans" to cope with different areas of need.
The government also provides more targeted help for the lower income groups, Wong added.
Wong also called on businesses to make use of this crisis to "change their mindsets, their processes and their practices".
He noted how Covid-19 pushed businesses to adopt digitalisation at a much faster rate in the span of two years, than what was able to be achieved in the past decade.
Wong concluded his speech by reassuring Singaporeans that the government will provide the support when needed:
"Mr. Speaker, let me end by assuring all Singaporeans once again. Help from Budget 2022 is coming. If the situation worsens and more support is needed, the government stands ready to do so. There are dark clouds over the horizon. But we will get through this together as we have always done as one united people."
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