mollymeek (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} mollymeek) wrote,@ 2007-08-29 03:34:00 |
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It is reported in everyone's favorite paper that there is no rise in hawker prices despite the GST hike. (The Straits Times, 28 August 2007)
Great huh. Though it interesting to see what the word "no" means in the world-renowned Straits Times Dictionary.
"A government survey of 1,300 hawkers across the island has found that more than 9 in 10 hawkers did not raise their prices after the GST hike to 7 per cent on July 1," proudly reports the ST.
9 out of 10 didn't raise prices= No raise in hawker prices
Therefore, 9 out of 10 = 10 out of 10.
See, actually Molly isn't that bimbotic. She knows Maths and deductive reasoning.
It is also great to note that the ST is saying that most hawkers did not raise their prices AFTER the GST hike. It says nothing about those who raised their prices BEFORE the GST hike (or perhaps even on the day the hike started). It also doesn't say anything about those who intended to raise prices AFTER the government survey was done.
"The results of the Department of Statistics survey imply that prices are stable, and that most businesses have not used the tax increase as an excuse to raise prices, said Minister for Trade and Industry Lim Hng Kiang," reports the ST. Now, the fact that most businesses have not used tax increases as an excuse to raise prices does not mean that they did not use tax increases as a valid reason to raise prices. So is this survey finding out, really? That there aren't dishonest price hikes (but we don't want to say anything about honest price hikes)?
OK, let''s not be nasty and start finding fault with honest newspapers and honest ministries with honest politicians.
Let's just think about whether it's a good thing that hawkers have not raised their prices.
Now, to consumers like Molly, it might be a great consolation to learn that hawkers are not raising their prices. We might find it weird that of all things, there's a fixation on whether hawkers are raising their prices or not. After all, bus and train companies are trying to raise prices, universities will probably raise fees and so on. . . But we are probably glad that the plate of mee siam with or without cockles is supposed to cost the same even after the GST hike.
But what about the hawkers?Hawker food is often priced in neat numbers: $2, $2.50, $3, etc. For a $2 bowl of mee pok, if the hawker was to raise the price by exactly 2%, he would have to sell the bowl of mee pok for $2.04. Round it off to $2.05? Nah, that would be over-charging customers. Profiteering right? (Note that the gahmen phased out one cent coins when the GST was raised to 5%.)
OK, perhaps that was an exaggerated example. But it does seem to me that if prices are raised (apart from food like drinks), they tend to be raised in neat numbers, e.g. from $2 to $2.50, usually not from $2 to $2.04 or $2.05.
I think it depends on what the hawker says. If he says that he is increasing prices because of the GST hike, then increasing the price from $2 to $2.50 can be considered profiteering. But what if the hawker doesn't say that or simply says that only part of the increase in due to the GST hike? He is, after all, free to sell the $2 bowl of noodles for $4 if he so wishes. His business might eventually collapse because no one buys his noodles, but it would seem to me that he is still free to set the prices as long as he doesn't make false claims about why he is doing so.
To focus on GST profiteering alone can be to neglect other factors that might contribute to price hikes. Inflation is more than a matter of GST hikes.
We also have to note that the hawker selling his noodles for $2 or $2.50 might have absorbed the GST ever since its inception 13 years ago. 3%: absorbed. (Phew!) 4%: absorbed. 5%: absorbed. (Yeh!!!) 7%: absorbed. (Yippee!!!!!!)
Considering that some (not all) hawkers might have weathered the GST and its hikes plus the general inflation over the years, one wonders if these hawkers' earnings might have dropped over the years. It is difficult to generalize (especially since the customer base changes). But it could well be possible that even as we are celebrating the price stability, a group of working class people are actually facing a decline in their standards of living because of a decline in income. On top of inflation, the great upgrading projects "given" to hawker centers also increase costs like rental for affected hawkers.
Earn less, pay for more things, pay more for things.
Now, if a hawker selling his bowl of noodles for $2 since 1993 until now tries to increase the price by 7%, would it be considered GST profiteering? (I really have no idea.) Should we say that the GST hike is only 2%, so he shouldn't increase the price by 7%? Or should we say that he has absorbed the GST all this while, so when he decides to stop absorbing the GST, he should be allowed to increase the price by 7% at one go? Maybe it's time for hawkers to learn from bus companies, train companies, cable TV companies, etc and tell sob stories about how many years it was since the last price increase and how operational costs have increased...
Can we pretend that the so-called price stability is necessarily a good thing for all Singaporeans? Or do we have to recognize that the two sides of a coin don't have the same face?
Good news can also be bad news.
When we learn that big supermarkets are temporarily absorbing the GST hike for selected items (and they have the resources to), perhaps we can also start thinking about smaller businesses that perhaps don't have the resources to offer consumers the same thing. Good news? Bad news?
Let's see. The GST hike helps the poor.Hawkers aren't poor, are they? They are known to earn million-dollar salaries and drive limousines. And their children are often featured in newspapers as success stories of students from humble backgrounds who nevertheless manage to get PSC scholarships and other crap.
The GST hike can also be used by business opportunists offering pre-hike sales, post-hike GST absorptions, etc.
The next good news will perhaps come a few years later: No Fall in PAP Winning Margins Despite Unpopular Policies.
Or perhaps: No Rise in National Intelligence Levels Despite GST Hike.
No Change in Declining Quality of Life Despite the Whining of Seditious Bloggers
No rise in hawker prices despite GST hike
HAWKERS' prices have not risen despite the two percentage point increase in the Goods and Services Tax (GST).A government survey of 1,300 hawkers across the island has found that more than 9 in 10 hawkers did not raise their prices after the GST hike to 7 per cent on July 1.
The results of the Department of Statistics survey imply that prices are stable, and that most businesses have not used the tax increase as an excuse to raise prices, said Minister for Trade and Industry Lim Hng Kiang.
He gave this written reply as time had run out to deal with it during the question-and-answer session at Monday's Parliament sitting.
The reply, released on Tuesday, was to MP Sam Tan (Tanjong Pagar GRC) who had asked whether current measures taken to combat GST profiteering were enough.
Yes, was Mr Lim's answer. He indicated that the situation was under control and believed legislation against profiteering was unnecessary.
'Our study of other countries' experience shows that legislation against profiteering is difficult and expensive to implement and the effectiveness inconclusive,' he said.
The best way to stabilise prices, he added, was to encourage free competition. 'When there are many sellers, and many buyers, prices will find their own equilibrium.'
Mr Lim also gave an update on the work done by the Committee Against GST Profiteering.
As at Aug 24, the committee had received a total of 115 complaints on alleged GST profiteering.
The number of complaints had shot up right after the GST increase came into effect. In the first two weeks of July, 49 complaints were received, surpassing the 30 complaints received in the whole of May.
