Playing down worries over the double increases in electricity and water prices in July, Minister for Trade and Industry Chan Chun Sing claimed that Singaporeans “perceive these increase disproportionately psychologically”:
“Other factors that affect people’s perceptions of living costs, including a changing interpretation of what essential goods and services are for different groups, and the increase in prices of items that are consumed daily – for example, water and transport fares – which may have a disproportionate psychological impact on consumers even if the increases are not the biggest in absolute terms. The bunching of price increases, like the increases in water and electricity prices this month, can also have a disproportionate psychological impact.”
The former army general also denied that the cost of living has increased, saying that it is subjective to individual’s needs and wants:
“No single measure will express an individual’s ‘cost of living’ pressures fully, given the different needs and wants, the evolving aspirations and the potential gap between aspirations and anticipated means…it is always politically more difficult to carry the ground when different groups of people receive varying levels of assistance because they are assessed to have different needs.”
Minister Chan Chun Sing then again blamed “people’s psychology” for the insufficiency of subsidies and assistance:
“This was being done through indirect subsidies and means testing, so as to ensure that those with less receive the most help. But while this was the economically and socially sound thing to do, it does come with some challenges. One is that consumers experience a “higher sticker price” when subsidies for prices of goods are not given upfront, which could create a negative psychological impact.”
Water prices in the past year has increased by 30% while electricity tariffs was raised by 13.7% in 2018. Earlier this year, Transport Minister Khaw Boon Wan has also signalled that public transport fare prices will also increase. The Singapore government has also announced that it will be raising GST by 2% to 9% in 2021.