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Put out the fire, not fuel it

June’s inflation figures has just been released. Overall inflation or Consumer Price Index came in at 6.7% year on year. This is an all-time high since 2008. All categories across the board saw price increases – from food, retail goods and utilities to transportation and accommodation. And the bad news is prices are expected to continue rising over the next several months.

Prices of goods and services will remain high even when inflation tapers off. The rising cost of raw materials exacerbated by supply chain disruptions and higher energy costs will add to inflationary pressure. Consumers will expect to pay more with costs filtering down to them. In short, cost of living will rise further. If and when recession hits, it will be a double whammy.

Given this raging inflation, the right thing to do is to put out the fire, not fan it by pushing through with the GST hike.

Giving out vouchers and rebates are but temporary measures to partially fix the problem. These cannot offset GST hikes which are permanent cost increases.

Taking a wait-and-see approach when the fire is raging is reactive, not proactive. And our reserves are still growing! Where is the gumption to do the right thing when the ominous signs are so obvious?

Singaporeans deserve better!

 

Francis Yuen

* (Charts from ST 25/7/22).

 

 

yyy
READER COMMENTS BELOW

16 Responses to “Put out the fire, not fuel it”

  • Absurdity:

    Rightly or wrongly, many retailers and landlords have already jacked up their prices for goods and services without the service tax increase. The nightmare will become full blown when retailers and landlords pump up prices before the real service tax increase comes. FY’s point hits the nail on the head. The service tax increase is permanent as it has always been. LW has no choice. The whole bunch of multi millionaire morons are depending on him for millionaire bank accounts and he has to make the numbers.

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  • MarBowling:

    Voters in the next GE have to do the NEEDFUL: it’s USELESS to KPKB about GST increase. It will INCREASE to 8% in 2023 and 9% in 2024! JUST ENSURE YOU VOTE OUT THE Son of Wangsa, the PUPPET ON A LOONG-STRING so that going forward, you will have enough SPACE TO BREATHE, period!

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  • Stupid Singaporeans Vote PAP:

    Singaporeans do not deserve better, they deserve it.

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  • C’est la vie:

    ******
    This long-standing, part of sg’s dictated way of life government, … knows that it’s people will take it on the chin as they always do, may have the odd moan or three, and ultimately, … will just behave, be grateful and be at the ready to vote, for the same old same old a-gain !!
    ***
    ******

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  • PAP mandate strong:

    Every country faces more or less inflation problem.
    Even food producing countries and oil e.g Malaysia also have its issues.

    https://www.freemalaysiatoday.com/category/nation/2022/07/22/protest-over-rising-prices-will-go-on-insist-organisers/

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  • Harder Truths:

    You cannot reduce inflation from cost-push (supply side) inflation by GST. The goods are priced according to world markets. Raising GST just means less people in $inkeland are able to afford them because the purchasing power goes down.

    $inkies will resort to borrowing to make ends meet. Also, stopping people from buying essential goods leads to a recession. This is an understood phenomenon.

    Opening up the Reserves is only effective if the stimulus is geared to the poor to compensate for their loss in purchasing power. This should be done by all means, but carefully. Too much stimulus creates more inflation. The uS is an example of this. The Trump stimulus cheques of mid-2020 helped the economy. But the added stimulus in Nov 2020 and the Biden stimulus in 2021 created the raging inflation of 9.1% we see today. (If we use the 1980 metric to measure US inflation it is actually 17%).

    The only two ways to practically reduce some of the burden on $inkies is to source cheaper goods and services – which $inkieland is not able to do because the Russia-China-Eurasia alliance will not give us discounted trade because we are American lackeys.

    Another way is to become self-sufficient in many of the goods we import. This would be possible if the population had stabilised at about 2.2million, but $inkieland will always go for a higher population that borrow heavily to meet daily neds, while increasing the prices artificially to make the cost to the population as high as poossible. This only drives up the debt-based system and reward the financial houses and the Regime. The people are the losers, as the yalways have been and always will be.

    In short – we need smart people to get out of the mess. We don’t have any in power. We don’t have any in opposition. We only have an economic model that runs on borrowing and one day this will break down soon and no one wants to fix it.

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  • Pour gst petrol:

    Vouchers and rebates are equivalent to small pee.

    When the inflation fire is raging, the Government is very keen to pour gst petrol into the fire.

    So that it will burn brighter?

    Where did they study their economics or finance 101?

    Do Scholars think like them? Let’s be honest, I don’t think they are not keen to put out the fire!

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  • Pour gst petrol:

    I think they are are not keen to put out the fire!

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  • xoxo:

    IMPORTED inflation indeed!
    Import COE,PARF,GST ,LEVIES INTO BASIC FEES,there will be INFLATED inflation!

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  • theforgottongeneration:

    Just waiting to see the fun in the next election – will Ah Loong no balls and hand over to LW before the elections; or he wants to chance it, pray-pray can get at least 75+% votes to show that he is not a lemon after 18+ years being the most expensive PM. If he can achieve Swiss Standards for us before 2024/25, then at least he would have some sort of legacy.

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  • Wealthy Singgas:

    There can never be an equal society.

    Some people will not be able to afford.
    But as I see it, the majority are still happily taking GRAB rides here & there.
    People ordering food delivered…
    Long queues at popular stalls and restaurants.
    Malls are crowded with people

    Ask any PHV driver.. their bookings have all gone up and they wish they have another pair of arms & legs and another car.
    Same with all the food deliverers…

    The roads are jammed with cars.
    Try getting a table at any eatery along Geylang or Sims drive…
    The basement of Takashimaya is packed with humans…
    Same with Raffles City…

    What inflation…??

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  • COL:

    Need to bring the COL down not up.
    Many are suffering already, especially the bottom 30%.

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  • P Against People:

    COE go up 100% ——> 100% increase! Gov fanning up fire of inflation!

    xoxo:
    IMPORTED inflation indeed!
    Import COE,PARF,GST ,LEVIES INTO BASIC FEES,there will be INFLATED inflation!

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  • Singaporean R Free Rider:

    COL:
    Need to bring the COL down not up.
    Many are suffering already, especially the bottom 30%.

    So what have you done to help the bottom 30% ?

    Why not you take the lead and walk the ground instead of just talk cawk sing song only ?

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  • mrWie:

    i guess, the only feedback they will (have to) listen …
    the only occassion the people will have TRUE power …
    is at the next GE.

    So, remember what they have done to us and vote wisely!

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  • Need money lah:

    “Why not you take the lead and walk the ground instead of just talk cawk sing song only ?”

    Need money to do it lah…What is our national reserve for ?
    Not to assist in time like this ?

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