MPs see more residents hit by inflation

May 11, 2008

MPs see more residents hit by inflation

By Teo Cheng Wee

More Singaporeans, citing inflation woes, are seeing their MPs to ask for financial and housing aid.

Apart from the low-income earners, there are now more individuals from among the lower-middle-income bracket, MPs told The Sunday Times last week.

Half of the 15 MPs interviewed said that more residents have been seeing them for help.

Jurong GRC MP Grace Fu has noticed a 10 to 15 per cent rise in the number of people at her Meet-the-People sessions. She said most are lower-income earners, with many first-timers.

Inflation seemed to be their main cause of concern.

Similarly, Holland-Bukit Timah GRC MP Liang Eng Hwa has been seeing more residents compared to last year, with many saying that they cannot cope with their financial commitments because of their suddenly reduced purchasing power.

Several wanted to downgrade from their current HDB flats, noted Mr Liang.

Half the MPs interviewed noted this growing trend of residents asking for help to downgrade from their current flats because of financial difficulties.

These residents sought assistance because the HDB does not grant loans to those who wish to downgrade.

In the past, this was less of an issue because those who sold their flats would have some cash in hand. They could repay their debts and buy a smaller flat, said Tanjong Pagar GRC MP Baey Yam Keng.

But with the steep property prices now - and high cash-over-valuations - they would not have extra cash to help them buy a resale flat after selling their old flat, which is why they are appealing for help from the HDB to grant them a loan.

'They have to turn to HDB because private banks will not loan money to them, since they are already in financial difficulties,' said Mr Baey.

The other emerging trend that some MPs have noticed is the increasing number of lower-middle-income earners at the Meet-the-People sessions - which are usually attended by lower-income earners. About one-third of the 15 MPs interviewed noticed this trend.

Labour MP Halimah Yacob has seen more such residents, although she said she did not have the exact figures.

While bread-and-butter issues do affect them, being in the slightly higher bracket, they also indulge in middle-income expenses like cars.

Thus, increasing Electronic Road Pricing charges and soaring petrol prices have resulted in them asking her for help to defer instalment payments on their cars.

Madam Halimah feels that the lower-middle-income earners who earn over $1,500 but less than $2,000 are 'particularly squeezed', as financial help schemes typically have a cut-off at a family income level of $1,500 or lower.

Help may have to be rendered indirectly, through giving their children bursaries or helping them find alternative childcare arrangements if the wife decides to return to work.

Madam Halimah also expressed concern about aggressive advertising promoting purchases on credit.

'There are ads which tell people that they can drive away a car by just paying $1. There are others that goad people to travel first and pay later,' she pointed out.

Hong Kah GRC MP Zaqy Mohamad, whose constituency is made up largely of middle-income families, has also seen higher numbers - about 40 cases a week, up from around 26 previously.

Still, MPs observed that the overall outlook was not that gloomy.

Said Pasir Ris-Punggol GRC MP Michael Palmer: 'When I first started my Meet-the-People sessions in 2006, the problem was unemployment. Even though residents have financial concerns today, at least most people have a job.'

Additional reporting by Aw Cheng Wei and Samantha Eng

What more can be done to help those feeling the heat of inflation? Send your comments to suntimes@sph.com.sg



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