Minister of State Dr Koh Poh Koon oral reply to PQ on profiteering due to water price hike

Questions:​

Er Dr Lee Bee Wah: To ask the Minister for Trade and Industry (a) whether the Ministry will set up a committee to look into any attempts against profiteering with the rise in water and electricity rates; (b) whether the Ministry look into setting up a mobile app to get feedback on profiteering; and (c) whether there are plans to guide and assist businesses to cope with the increase in business costs due to such rises.

Mr Liang Eng Hwa: To ask the Minister for Trade and Industry (Industry) whether the Ministry intends to re-activate the anti-profiteering task force to step up surveillance against possible profiteering activities due to recently announced water price hikes.

Oral reply (to be attributed to Minister of State Dr Koh Poh Koon):

The measures on water tariffs, diesel and carbon tax announced at Budget 2017 are targeted and are expected to have a moderate impact on overall business costs, with the impact differentiated across industries. Utilities cost, which includes water and electricity costs, accounts for a relatively small share of business costs of firms in the services sector, at less than 1% on average for most services industries.[1] Electricity prices are revised every quarter according to prevailing gas prices, which are indexed to global oil prices. There has been a general decline in our electricity tariffs over the past three years due to low global oil prices. The current electricity tariff is around 16.9% lower than that in the 2nd quarter of 2014.

CASE will step up its education efforts to encourage consumers to exercise their choice and make informed purchasing decisions. Consumers can opt to buy from businesses which continue to offer competitive prices and products that cater to their consumption preferences. CASE will also keep watch on price increases, and look into feedback on alleged profiteering. Consumers who wish to provide feedback can do so through CASE’s hotline, website or mobile app.[2] They can also do so through Government feedback channels such as REACH.  Hence, MTI does not see the need to set up a committee to look into profiteering at this point.

The Government will continue to monitor the impact of the Budget 2017 measures on industries, and calibrate our economic support policies as appropriate.  The most sustainable strategy for businesses to manage cost increases and stay competitive is to transform by upgrading capabilities for higher levels of productivity and innovation. SMEs can approach any of the 12 SME Centres for customised advice on business development, and how they can tap Government assistance to strengthen their businesses. In particular, SPRING’s Capability Development Grant (CDG) provides support for SMEs in building capabilities to grow their businesses, by defraying up to 70 per cent of qualifying project costs. Through the Local Enterprise and Association Development (LEAD) Programme, SPRING also works with the Trade Associations and Chambers (TACs) to strengthen their internal capabilities and the roles they can play in driving industry transformation and growth.

[1] Among the services sector, the utilities cost share for firms in the accommodation and food services sector is the highest at around 5%. Source: Economic Survey of Singapore 2016

[2] Consumers who wish to provide feedback can do so to CASE through their hotline at 6100 0315, at their website at www.case.org.sg or through their mobile app (CASESG).

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