OPINION | Inflation woes and do Singaporeans only like talking about change but are too fearful of actually affecting the change?

Last week, we discussed how there is no official poverty line in Singapore, making it harder for society to identify fellow citizens who need our support. This is in turn, juxtaposed by figures that indicate that Singapore had a 6.9 per cent increase in the number of ultra-high-net-worth individuals (UHNWIs) in the country while the number of very rich people around the globe dropped by 3.8 per cent in 2022.

This week, Member of Parliament (MP) for Sengkang Group Representative Constituency (GRC), Louis Chua, noted on a Facebook post that the Central Provident Fund’s (CPF) Ordinary Account’s (OA) interest rate has remained static since 1999. Given that the interest rates for the Special and Medisave accounts are going up from 4.00 per cent to 4.01 per cent, based on an announcement from the CPF Board on May 29, it was Mr Chua’s opinion that it is time that we relook reviewing the OA’s formula, to better take into account the current nature of the fixed deposit and savings rates from the three local banks. Further, Mr Chua noted that the CPF preferred not to consider inflation in the formula.

Given that CPF is meant to provide for Singaporeans post-retirement, shouldn’t taking into account inflation be par for the course? After all, what is the point of a post-retirement sum of money that may not be enough to live on because of the effects of inflation? Wouldn’t that be counterproductive?

Louis Chua
Louis Chua. FB screengrab: The Workers’ Party

Given that the sight of elderly people doing blue-collar work post-retirement is sadly not uncommon in Singapore, shouldn’t greater consideration be given to the CPF formulation to prevent this predicament?

While many politicians have insisted that old people like to work to remain healthy and active, looking at how back-breaking some of this work is, this argument is hard to believe for all such cases.

“To ensure Singaporeans’ retirement savings can keep up with inflation, or at least reflect market interest rates, I do hope the Government can review the CPF OA formula in a timely manner. #MakingYourVoteCount #WorkersParty #CPFsg #RetirementPlanning,” added the Sengkang GRC MP.

While Singapore retains the reputation of being an ultra-rich country, all that glitters is not gold. Just this week, a video capturing a woman begging for forgiveness after attempting to steal toilet paper from a local car centre has gone viral, eliciting sympathy and criticism from netizens.

While it is important to point out that we do not know the personal circumstances of the woman in the TikTok video, one can perhaps assume that most people do not steal for fun. Toilet paper is also a fairly low-value item. Perhaps the woman in question stole something that seemed low-value out of feeling like she had no choice? It is a necessity, after all, and if she cannot afford it but needs it, it might have led to her resorting to theft. While theft is wrong, it could highlight sheer desperation.

Inflation is currently at an all-time high globally, and unsurprisingly, it affects Singapore too. It also seems that inflation is not going away any time soon. With that in mind, shouldn’t the CPF plan for the future by factoring inflation in the OA by reviewing the computation of its interest rates?

Many studies have indicated that society is most stable when there is a large middle class without huge divides between the haves and the have-nots. But increasingly, is the gulf between rich and poor widening? And will that lead to a breakdown of society?

According to a recent article, a report published on May 30 divulged that in 2022, the median price for private housing in the country was US$1.2 million (S$1.6 million). According to the report, Singapore had the highest median price in the Asia Pacific. It also bagged the number one spot in the region regarding the most expensive places to rent private housing, according to the most recently updated Home Attainability Index by the Urban Land Institute (ULI) Asia Pacific Centre for Housing.

If prices are so high, while the CPF meant to provide for retirement is not matching the skyrocketing prices, isn’t that a recipe for future problems?

While I am in no way suggesting that having a greater diversity of voices in Parliament, enough to challenge the status quo meaningfully without deadlock, is the miracle cure to all problems, it can at least provide new ideas to have a chance to come to fruition. As the opposition parties in Singapore level up, their ideas are also evolving to be effective alternative policy solutions.

Is it time to give them a chance? Or do Singaporeans only like talking about change but are too fearful of actually affecting the change?


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