PROFITEERING BY COMPANIES (Steps to prevent)

Mr Tan Soo Khoon asked the Minister for Trade and Industry what definite steps are being taken by the Government to prevent profiteering by companies, in particular those which enjoy a monopoly in their trade or business.

BG Lee Hsien Loong (for the Minister for Trade and Industry): Mr Speaker, Sir, the best way to prevent profiteering by companies is to ensure that there is free competition. This is why MTI has been vigilant in ensuring that as free a market as possible exists in our domestic trade, particularly where essential commodities are concerned. Where by the nature of the trade a single company has a substantial monopoly, a completely free market is not possible. However, even in such cases, the Government should not rush to interfere by controlling prices itself. Doing so would require a cumbersome bureaucratic machinery, which consumers would ultimately have to pay for. Besides, recent experience has shown that the Government is not always in the best position to know what the correct prices should be. I am sure hon. Members will remember examples over the last few months. The Government's policy is therefore to allow firms to set their own prices. However, where there is clear evidence that a cartel is fixing prices unfairly, or a monopoly is abusing its position to raise prices, the Government will not hesitate to act against them. The general knowledge that the Government will do so has helped to keep companies in line. So far, this policy has served us well.

Mr Tan Soo Khoon: Sir, in view of the answer that has been given, does the Minister of State consider the recent price increase of newspapers belonging to the Singapore Press Holdings an act of profiteering and an abuse of its position as a monopoly in Singapore? If so, what action does he propose to take?

BG Lee Hsien Loong: Mr Speaker, Sir, the answer must be no, otherwise the action would have been taken already.

Mr Tan Soo Khoon: Sir, could the Minister of State advise why the answer is no? If I got him correctly, he said that there should be competition. In this case it is a company which enjoys a monopoly in newpaper publication and yet no action has been taken.

Mr Jeyaretnam: It serves the Government.

BG Lee Hsien Loong: Mr Speaker, Sir, I am not holding any brief for any newspaper, but I think we have to look at the overall behaviour of companies over a period of time before deciding whether or not the companies are responsible and are justifiable in their pricing decisions. I would say that although the Straits Times is a monopoly, it is not a monopoly enforced by the Government and it is, in fact, open to anybody who wishes to break into the business to do so.

Mr Tan Soo Khoon: Sir, in view of the large profits enjoyed by the newspapers because of their monopolistic position, does he not feel that the price increases are unjustified?

BG Lee Hsien Loong: Mr Speaker, Sir, the question is predicated on an assumption that the newspapers enjoy large monopoly profits which, I think, the Member ought to justify to the House before I could proceed to the second part of his question.