Senior Minister of State Lee Yi Shyan's written reply to Parliament Question on Inflation

Question:

Mr Laurence Lien: To ask the Minister for Trade and Industry given the persistently high inflation rate, whether the Government will consider more aggressive measures like a short-term freeze on Government fee increases, price increases for new HDB flats and public transport fare hikes.

Written reply by Mr Lee Yi Shyan, Senior Minister of State for Trade and Industry:

We share Mr Lien’s concerns over the rise in inflation. Over the past nine months, CPI-All Items increased by 4.8% on a year-on-year basis. However, a large part of the increase in CPI-All Items was due to imputed, rather than actual housing rentals and a surge in the Certificate of Entitlement (COE) premiums for private cars. COEs contributed 0.9 percentage points to the increase in CPI-All Items.

Other government fees and charges have not experienced large increases. Indeed, they accounted for only 0.2 percentage points of CPI inflation over the past nine months. Over the same period, public transport costs similarly contributed only 0.2 percentage points to CPI inflation. The Government will continue to invest heavily in improving public transport, which will help to keep transport costs in check.

The Government is committed to keep public housing affordable. It has taken significant steps to boost the supply of new Build-to-Order (BTO) flats. In terms of pricing, BTO flats enjoy substantial market discounts, and the subsidies are regularly reviewed to ensure that HDB flats are affordable, especially for first-timer buyers. The Government has also implemented a number of demand management measures, and will continue to monitor the public housing market closely.

In addition, the Government has taken a few initiatives to directly help households with their costs of living. For example, we have provided subsidies for healthcare, child-care and education, all of which benefit lower-income families more. Public transport vouchers are also given to needy families to offset bus and MRT fare increases. The GST Voucher Scheme, which was introduced in this year’s Budget, will also benefit lower-income households significantly. For instance, a retiree household staying in a HDB 3-room flat will receive $960 on average each year from the GST Voucher Scheme.

The Government will continue to monitor inflation closely, and is prepared to introduce additional measures if necessary.