Forum: Helping businesses compete is better than discouraging consumer choice
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I refer to the letter proposing fiscal measures on cross-border grocery purchases following the opening of the RTS Link (Level playing field for local retailers with RTS Link opening, Aug 5).
While the proposal is well intentioned in seeking to support neighbourhood retailers, it is difficult to see why discouraging consumer choice is the best response to increased cross-border competition.
The RTS Link is intended to improve connectivity and strengthen economic integration between Singapore and Johor. Differences in grocery prices largely reflect exchange rates, labour costs, rental costs and other structural factors between the two economies, rather than an uneven playing field.
The long-term response should be to help businesses become more competitive through productivity improvements, innovation and better customer service.
As the letter notes, Sheng Siong intends to adjust its pricing and product mix to remain competitive. While not every retailer has Sheng Siong’s scale, smaller retailers that need help may be better served through targeted productivity and capability-building support than by measures that discourage cross-border shopping.
The proposal also raises questions of consistency. Singaporeans cross the border not only for groceries but also for dining, healthcare, vehicle servicing and other services. It is therefore not clear why groceries alone should be treated differently.
Likewise, the suggestion to curb “excessive grocery runs” is difficult to assess without a clear definition. Many households shop in Johor simply to stretch their budgets amid rising living costs. Without evidence that grocery shopping itself causes significant economic harm, it is difficult to justify targeting this category of spending.
The suggestion to pair cross-border fiscal measures with reduced GST on domestic staples also raises questions. It would effectively tax one group of consumers to subsidise another without addressing the structural reasons behind the price differences. It could also complicate Singapore’s broad-based GST system and encourage other industries facing overseas competition to seek similar concessions.
The Government already supports households and neighbourhood retailers through the CDC Voucher scheme, helping families cope with inflation while directing spending towards participating heartland merchants. If more support is needed, strengthening such targeted programmes would appear more consistent than introducing new measures that discourage cross-border shopping.
The RTS Link should be viewed in the context of its broader purpose of improving connectivity and economic integration. While some businesses may face greater competition, others will benefit from increased cross-border activity. Helping businesses compete more effectively while preserving consumers’ freedom to make informed choices remains the more sustainable response.
Phui Teng Kim
