<Article by Joseph Tan Kheng-Liang>
Many people in Singapore would have been accustomed to paying $2 for a litre of petrol and $5 for a plate of chicken rice at a food court. But has anyone actually wondered why they are paying so much compared to our neighbours in Malaysia?
While the PAP IBs will tell you that this is because Singapore is more developed and its citizens richer and we should thus be happy to pay more. But the reality is that for most businesses, high rents means that they have no choice but to raise the prices of their goods. And who really benefits, except the government?
Instead of caring for the prices that its citizens have to pay, PAP likes to call for open tenders and let the markets determine the prices. While economic theory says that most businesses will be rationale, predicting future demand is a subjective thing and many businesses tend to be over-optimistic!
In 2009, Kopitiam won a tender to run the food centre at Sengkang Square for $500,100 a month after it offered more than twice its next competitor. However, the rents that they charged to stallholders were so high that many closed within a year with little crowd because there was an air-conditioned one at the then Compasspoint.
At the end of the day, the residents lose, the stall-owners lose, the anchor tenant was unlikely to be profitable and the only one who really gains is the government and perhaps the stat board. The same thing is basically happening to all the providers of our basic necessities ranging from supermarkets and even petrol stations.
Back in 2014, Esso spent $27 million for a 10-year lease site in Ang Mo Kio. Not only is this double from the past rate, that Esso branch would need to make a gross profit of $7,500 a day just to pay the rent. It is little wonder that petrol prices did not drop as much as oil prices in the past year.
To sum things up, Leong Sze Hian once gave an analogy (pertaing to BTO flats) which I shall paraphrase:
Suppose I buy a chicken for $1 and sold chicken rice for $3. In reality, I would have made a $2 profit but the PAP will tell you that they are making a $2 ‘loss’ since the market price of chicken rice is $5 and they are giving a subsidy.
What is wrong with this? Less than 15 years ago, Singapore was ranked about 100th in the world for the costs of living. Today, we are the most expensive city while PAP claims it is for expats only!
I can only say that PAP’s greed knows no boundaries but who am I to judge, since they have such a decisive mandate at the elections?