Government stands ready to help Singaporeans if cost of living worsens, PM Lee says in National Day message

SINGAPORE - Singaporeans must brace themselves and be psychologically prepared that in the next decades, the region might not be as peaceful and stable as it has been, Prime Minister Lee Hsien Loong said on Monday (Aug 8).

And the world is not likely to return any time soon to the low inflation levels and interest rates people have enjoyed in recent decades, he added in his National Day message.

The Prime Minister acknowledged that the cost of living is at the top of everyone's minds, and gave the assurance that the Government stands ready to do more to help Singaporeans if things worsen.

But the basic reality, he said, is that global economic conditions have shifted.

Singapore's deeper response must therefore be to transform industries, upgrade skills and raise productivity.

Only then can wages beat inflation and citizens earn more in real terms year by year.

PM Lee gave this sobering outlook on geopolitics and the economy in his speech that was recorded at Gardens by the Bay, and broadcast to the nation.

He noted that after battling Covid-19 for two-and-a-half years, Singaporeans have come through as one united people.

Key to its success has been the high level of trust — not just people trusting the Government and following its advice on safe management measures and vaccinations, but also trusting one another to be responsible.

"We did the right thing even when no one was checking," he said. "Our mutual trust in one another made all the difference."

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Singaporeans have emerged stronger and united from the pandemic, he added.

This unity is crucial as the country moves forward.

PM Lee noted that US-China relations are worsening, with intractable issues, deep suspicions and limited engagement between the two sides.

This is unlikely to improve any time soon, and miscalculations or mishaps can easily make things worse, he added.

Russia's invasion of Ukraine also has profound implications for the world and for Singapore.

First, it has set Russia, a nuclear power, bitterly against many states, especially the US and Nato countries. This hostility is deep and will not be resolved easily.

Second, the invasion violates fundamental principles of sovereignty and territorial integrity under the United Nations Charter. Such principles are vital to Singapore, as they underpin its security and existence, he said.

Third, war in Europe will affect regional security in the Asia-Pacific. It has further strained China's ties with the US, and with America's partners in Asia. "Singapore will be buffeted by intense rivalry and tensions in the region around us," he added.

"Staying united is key to Singapore's survival - it is the only way to deal with challenges in an increasingly troubled world," he said. "We must look to our Total Defence, and maintain a strong and credible SAF and Home Team."

Turning to the economy, PM Lee noted that while Singapore has emerged strongly from the pandemic, the outlook has clouded considerably.

The pandemic had disrupted supply chains and inflation was already on the rise.

Russia's invasion of Ukraine aggravated both problems, and food and energy prices are rising globally.

The Government is doing everything necessary to help Singaporeans cope with rising prices, PM Lee said.

Multiple support packages target assistance at those who need it most, with some measures already in place, while others will be rolled out in the coming months, he added.

"We have acted decisively to secure supplies of food and other essentials, diversifying our sources and building up adequate stockpiles." 

PM Lee added that he was glad to see companies and community groups starting their own support programmes.

"By helping each other, Singapore can be stronger together," he said.

Meanwhile, the Government has tightened its exchange rate policy and strengthened the Singapore dollar to dampen imported inflation.

"The Government also stands ready to do more to help Singaporeans if things worsen," he added.

PM Lee said: "More storms and turbulence lie ahead. But do not fear.

"As long as we stay united and resolute, we can keep our nation peaceful and secure, build a more prosperous economy, and forge an inclusive society that all of us can belong to and be proud of, for many years to come."

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This article was first published in The Straits Times. Permission required for reproduction.