According to his Parliament speech on businesses profiteering from the water price increase yesterday (Apr 3), Minister of State Koh Poh Koon said that only the Public Utility Board will be allowed to profit from the 30% increase in water price and that any businesses who jacked up their prices due to the increase will face a fine.
Minister Koh Poh Koon said that the 30% water price increase is “only less than 1%” of business costs, and the Minister who has never set up his company gave a business advice telling businesses to “manage cost increases”:
“The Consumers Association of Singapore (CASE) will monitor for businesses attempting to profit from the increase in water prices. Utilities cost, which includes water and electricity costs, accounts for a relatively small share of business costs of firms in the services sector, at less than 1 per cent on average… The most sustainable strategy for businesses to manage cost increases and stay competitive is to transform by upgrading capabilities for higher levels of productivity and innovation.”
Minister Koh also defended in 6.1% increase in electricity tariffs saying:
“There has been a general decline in our electricity tariffs over the past three years due to low global oil prices. The current electricity tariff is around 16.9 per cent lower than that in the second quarter of 2014.”
Despite having coffeeshops increasing prices of drinks, Minister Koh Poh Koon defended the water price increase saying that the inflation has nothing to do with the government:
“The cost of coffee is not just based on water alone – there are rental costs, workers’ costs, pricing strategies … Price increases can happen with or without water price increases. Coffee can be a 3-in-1 or a latte, in between the price range is quite huge. Consumers then have to make the choice to encourage businesses to price their products to be sustainable. For those coffee shops in the neighbourhoods, when one increases the price by 10 cents, very soon the rest will follow suit. How will CASE handle this? Will hawker centres set a standard for the price of a drink?”
The Minister also said that Singaporeans have the “choice” to not patronize the coffeeshop which increased its prices:
“If a coffee shop were to raise its prices, consumers can choose not to patronise the business.”