$1.5b support package offers relief for needy but worries linger

The $1.5 billion package is the latest government effort to help Singaporeans cope with the rising cost of living. PHOTO: ST FILE

SINGAPORE - The vulnerable and low-income earners may face difficulties making ends meet in the long term, said experts The Straits Times approached, even as they welcomed the recent announcement of a $1.5 billion support package that is geared towards this group.

The package that Deputy Prime Minister Lawrence Wong announced last Tuesday (June 21) includes additional GST vouchers of up to $300, as well as a $100 household utilities credit for all households.

ComCare cash payouts will also be permanently increased - a one-person household on Long-Term Assistance will receive $640 per month, versus the current $600, while larger households will receive more.

The $1.5 billion package is the latest in a string of packages and grants rolled out by the Government in recent years to help Singaporeans cope with cost of living amid external factors such as the Covid-19 pandemic, including the launch of the Covid-19 Recovery Grant last year.

Fei Yue Family Service Centre senior assistant director Joyz Tan said that while the social service agency's clients - including the elderly and at-risk families - are grateful for the new $1.5 billion package, her clients wonder how often these packages can be rolled out to help low-income earners and the vulnerable tide through inflation and supply chain disruptions.

She said: "Many of our clients share that they face higher stress or worries about how they will cope in the long term. Previously, whatever they received in terms of financial assistance could last them longer throughout the month compared to now."

Some of her clients, particularly the elderly, have now resorted to cutting their monthly spending on food. For example, instead of buying fresh eggs in the supermarket, they now grab cheaper but processed food off the shelves, Ms Tan added.

In addition to lower-income families, the $1.5 billion support package will help the likes of Ms Siti Farhana, who lives with her three children in a two-room rental flat in Boon Lay.

The 31-year-old childcare teacher makes $2,600 a month and is only left with a few hundred dollars each month after spending on necessities like groceries, diapers, transportation and childcare although her fiance helps out with the family's monthly expenses.

She said she feels the pinch from the rising cost of products as she used to spend around $100 per month on things such as diapers, shampoo and toothpaste, but now forks out around $50 to $100 more since prices have increased.

She said: "Even cheap food like canned sardines and eggs are quite expensive now."

"We made it a habit to cook more than eat out, so that helps us save up. I will rush back home after work to cook during the weekdays but it's quite tiring," she added.

Childcare teacher Siti Farhana lives with her children in a two-room rental flat in Boon Lay. ST PHOTO: YONG LI XUAN

Institute of Policy Studies' Social Lab head and principal research fellow Dr Mathew Mathews said that additional assistance, such as the $1.5 billion aid package, is crucial to help the underprivileged tide through this period of uncertainty, brought on by external factors such as the Russia-Ukraine conflict and global supply chain disruptions.

He said: "It will be a pity for the families which have worked hard in the last few years to get out of their very disadvantaged situations, and have been trying to get their children to focus on their education and perhaps also have been trying to upgrade, to be in a situation where the economic situation and associated burdens stop them from continuing in these pursuits which can lead them to financial stability in the longer term."

Singapore University of Social Sciences associate professor Walter Theseira said that the additional GST vouchers in the $1.5 billion package should cover the average household for a few months of price increases due to inflation.

He said: "It will, however, not remove all the effects of inflation, so they may still have some difficulties making ends meet without changing some of their purchasing behaviours or receiving additional income."

Adjusting assistance levels when the cost of living changes would help ensure that households can maintain the same quality of life when facing high inflation, he added.

"Our current practice is to review this periodically or when needed - such as now, due to high inflation - but this practice creates uncertainty for those receiving assistance, and there is a risk that if the review is not timely, many households on assistance could be deprived of a minimum standard of living."

Associate Professor Theseira said that without close monitoring of how inflation impacts the prices of goods and services households rely on, there is no way of telling whether they are encountering difficulties until complaints come up from the ground.

Adding that while a prolonged period of high inflation would require more government assistance down the road, he said: "It may not be ideal for the government to assume all of the responsibility for ensuring inflation has no effect on living standards."

While agreeing that the new package would help the low-income and vulnerable groups to an extent, Touch Community Services chief executive James Tan added: "We'd like to stress that the government cannot alone be responsible for solutions. It is also important for the community to come alongside and complement the government's efforts for greater impact."

Additional reporting by Yong Li Xuan

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