S'pore Won't Fight Inflation With Price Controls: PM Lee

Source : The Business Times November 12, 2007

Rising cost of living for lower-income, elderly to be met in other ways

The government is unlikely to impose controls on food or utility prices in response to rising inflation, but will continue to use other ways to help Singaporeans cope with the cost of living, said Prime Minister Lee Hsien Loong yesterday.

Although many other countries control oil prices, electricity prices and even bus fares to help poor people, 'our approach in Singapore is different', he said.

'We help - we do a lot - but we don't help by keeping the prices individually controlled. We help by making sure that the low-income are able to pay for their necessities, able to earn a living, able to have a house over their heads.

'We help you through Workfare, so if you work, you get more. And then we have packages like the Progress Package.

'This is the way we help Singaporeans and low-income Singaporeans to cope with the cost of living.'

He made the remarks at the People's Action Party (PAP) annual convention at the National University of Singapore's University Cultural Centre yesterday.

More than one party member had asked how the PAP-controlled government could help lower income Singaporeans cope with rising price inflation.

The difficulties faced by lower-income Singaporeans and the elderly were also raised by several Members of Parliament who spoke during the three-hour convention.

Mr Lee said: 'We've had a period now where the cost of living actually has been very stable. Inflation has been very low, bus fares have not gone up very much, food prices have not gone up very much, housing prices have been stable.

'Going forward, we're not sure that we can keep the cost of living as stable and as low as it has been. Oil prices are high and may rise further. Food prices have gone up.

'And bus fares will have to adjust when energy prices go up. Electricity prices have to go up. So I think this is something which people are going to be worried about.'

Although some expect the government to step in to keep prices low through controls, he said that it would be unwise to do so.

'If you look at bus fares in many countries, these are controlled so the bus companies lose money, the government just coughs up. Electricity prices similarly in many countries are controlled. And that is one way those governments try to help the poor people.'

'We do care,' he said. 'The principle is, you help yourself, you work, the government will help you. But you must make the effort. And that is how Singapore will succeed, that's how you will succeed. And I think that's an approach that's worked for the economy, for the country, and we must keep that.'