NOT SUSTAINABLE TO RELY HEAVILY ON GOVERNMENT
Mr Wong said the enhancements to the Assurance Package reflected the Government’s commitment to help Singaporeans through a challenging period of higher prices.
“But I hope all Singaporeans understand that it is not fiscally sustainable to rely so heavily on Government support year after year to cope with inflation,” he said.
Mr Wong said that even after the current inflation surge moderates, inflation may stabilise at a higher trend level than in the last few decades, both globally and in Singapore.
“The era of untrammelled globalisation that kept goods at highly competitive prices all over the world is over,” he said.
“Countries are now relooking and adjusting their supply chains. Instead of buying from the cheapest, they are prepared to accept lower efficiency and higher costs to prioritise diversification and strategic resilience.”
He added that these trends were pushing up inflation everywhere, including Singapore, and that the country did not have much influence over the global inflation picture.
“But our best strategy to cope with inflation is to make ourselves more productive and competitive – so that our workers earn more, and the increase in earnings can more than make up for the higher prices.”
Mr Wong noted that this was what had happened last year, with real incomes growing 2 per cent for the median worker, and 4.7 per cent for a worker in the 20th percentile.
“So despite higher prices, we are still better off in real terms.”
He also stressed the importance of pressing on with economic restructuring and transformation, helping businesses to raise productivity, and helping workers upgrade their skills.