Singapore Government Press Release

Media Division, Ministry of Information & The Arts, #36-00, PSA Building, 460 Alexandra Road, Singapore 119963, Tel: 3757794/5

SPEECH BY DPM LEE HSIEN LOONG

AT THE OFFICIAL OPENING OF

NTUC FAIRPRICE EASTPOINT SUPERMARKET

ON 27 DECEMBER 1996 AT 10.30 AM

It gives me great pleasure to open the NTUC FairPrice Eastpoint Branch.

Besides running a supermarket in this shopping centre, NTUC FairPrice is also operating an air-conditioned wet market. This combination of a supermarket and a wet market will meet the grocery shopping needs of Simei residents.

This FairPrice shop shows how lifestyles have changed in Singapore. We have gone from street hawking to wet markets, then to dry markets, and now air-conditioned wet markets and supermarkets. The changing face of the marketplaces reflects the changing lifestyles of Singaporeans. Our quality of life has improved steadily over the years. So have our aspirations and expectations. So supermarket retailers like NTUC FairPrice have to constantly introduce new things and upgrade their stores to meet customers' expectations.

To many shoppers, a supermarket is now no longer just a place to buy basic foodstuffs and necessities. Shopping has become part of our lifestyle. We want to shop in comfort now. We expect a pleasant shopping environment and good service. But after a while, we tend to take all these for granted and forget that if we want a certain standard of living, we must pay a little more for it. So we complain about the higher cost of living. We feel that things cost more than before.

But, have prices of things really gone up? The Consumer Price Index, compiled by the Department of Statistics, shows that inflation has been low. The CPI went up on average by just 2% per year over the last 10 years. But many people find this hard to believe. So Mr Lim Boon Heng's Cost Review Committee took a more direct approach. It asked retailers like FairPrice and Emporium Holdings how their prices had moved.

FairPrice told the Committee that it had conducted a survey of a basket of 111 essential items, and found that their prices had increased only marginally, by 1%, over the last two years. This is in spite of the implementation of the 3% Goods and Services Tax in April 1994 and two years of high growth and rising incomes.

Comparing this year against last year, FairPrice's study showed that between June 1995 and June 1996, prices of these 111 items actually dropped 1.9%.

However, the FairPrice survey also showed that consumers are going for "high-end" or "luxury" goods - premium grade fragrant rice instead of ordinary rice, fresh milk instead of condensed milk, tuna instead of sardines, shower cream instead of soap. This is a major reason why living expenses have gone up: our lifestyles have changed, without our realising it. From year to year the change is gradual. But taken over 5 or 10 years it has been a major change. And in the 31 years since independence, the way we live has been totally transformed.

This is something to rejoice over, not to regret. We may look back nostalgically to the days when a bowl of kwayteow cost 30 cents and a haircut 50 cents. But remember how little people earned then, how hard life was, how poor living conditions were. Then ask yourself whether you were really better off then than today.

People often ask the Government to do more to keep the cost of living down. They have in mind direct steps, like increasing subsidies for public transport, or controlling hawker prices. The Government has not done this, but this is because such moves will not really help. Higher subsidies will have to paid for with higher taxes, and higher taxes will raise the cost of living. And it is not possible to specify how much a hawker is entitled to charge for a bowl of noodles, a plate of roti prata, or even a cup of coffee. If you think a hawker is charging too much, then go to another hawker stall instead. But remember that hawkers too have families, and expect to see their lives improve year by year, just like other Singaporeans. So hawker prices have to go up from time to time.

But the Government has done much to keep down the cost of living. First, it encouraged NTUC to set up FairPrice, to offer good quality essential food items at reasonable prices to consumers. Consumers can therefore always rely on FairPrice to provide them with what they need, and not have to worry about being squeezed or overcharged. Lower income households particularly benefit from this.

FairPrice has played this role well. For example, it has promoted housebrand products, to provide consumers with an alternative choice of quality goods at competitive prices. And several times in the last few years, when there have been temporary shortages of rice or other items, for example when the Gulf War broke out in 1991 and families rushed to hoard food, FairPrice has maintained adequate supplies, kept its prices stable, reassured consumers and stabilised the market.

Secondly, the Singapore dollar has been strong. It is one of the strongest currencies in the world, stronger even than the Deutschmark. This has kept imported goods cheap, in Singapore dollar terms. Because we are such an open economy, a large part of what we buy is imported: including food, consumer products, and clothing. Singaporeans who are paid in Singapore dollars therefore benefit. This is one reason so many Singaporeans go on holidays overseas. They find it cheap, because of the Singapore dollar.

The Singapore dollar has been strong not by chance, but because of our high savings rates - personal savings in the CPF, and public sector savings because of our budget surplus. It is also because people have confidence in Singapore. They do not worry about political upheavals, and they are sure that the economy will continue to be well managed.

Opposition parties do not understand this. They want the Government to cut CPF, and to stop running a budget surplus. They also want to change the system of government which has built up stability and confidence in Singapore. And they claim they are trying to help bring down the cost of living!

Thirdly, we have generated economic growth, and improved the lives of all Singaporeans. Without growth, without good jobs, prices of many things may be low, but they will still be beyond the reach of Singaporeans. But with growth, year after year, our wages have increased by much more than prices. This had made nearly everything more affordable - better education, health care, housing, travel. Even with cars, far more people can afford cars today, despite having to pay high taxes and COEs, than 30 years ago, when there was no ARF, no COEs, but people were much poorer.

If we want to keep the cost of living down, and continue to improve our lives, we should support a government which can deliver growth, progress, and prosperity to Singapore.

Finally I wish the management and staff of NTUC FairPrice continued success in your operations and congratulate you on the opening of your Eastpoint Branch.