PRICE INCREASES (Monitoring and curbing)

Mr Steve Chia Kiah Hong asked the Minister for Trade and Industry what actions are being taken by the Government to monitor price trends and to curb wanton price increases during this difficult economic period.

The Senior Minister of State for Trade and Industry (Mr Tharman Shanmugaratnam) (for the Minister for Trade and Industry): Mr Speaker, Sir, MTI monitors price trends constantly and publishes such data regularly. Inflationary pressure has been largely absent in the first half of 2002. Inflation was -0.6% in the first half of the year, with prices of most major items posting declines. Although the economy is picking up, inflation for the year as a whole is expected to remain weak at close to 0%.

Understandably, some people are concerned about retailers raising their prices when GST is increased or even in advance of the GST increase. The increase in prices due to the GST is expected to be less than 2% next year, based on the experience in 1994.

Nevertheless, to prevent the possibility of wanton price increases, we have set up the Committee Against Profiteering, headed by Mr Chan Soo Sen, Minister of State for MCDS and PMO. The committee comprises grassroots leaders, members of merchant associations, CASE, unionists, and MPs, including Mr Steve Chia. Local committees have also been formed at every constituency to address complaints by residents against opportunistic price increases. If there is evidence that the retailer is seeking to profiteer, these committees will apply moral suasion on them.

Our basic approach to control inflation is to keep the Singapore dollar stable, and rely on competition and market forces to generate efficiency and lower prices. Since most of what we consume in Singapore is imported, a stable Singapore dollar will help to keep inflation under control. The Government will also continue to ensure that there is an adequate supply of essential goods and services so that businesses will find it difficult to profiteer.

Mr Steve Chia Kiah Hong (Nominated Member): Sir, does such monitoring services have the power to cover the TLCs, the GLCs and the statutory boards that provide public services too?

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, the monitoring by MTI covers all the goods and services in the composite CPI basket. Some of them are utilities, and I think the House has sat through many debates on various aspects of price increases in different utilities, including transport fares, which we had a debate on quite recently. Not all goods and services are under the purview of MTI.