In his reply to WP’s Associate Professor Jamus Lim’s motion on how macroeconomic policies can play a role in addressing cost of living, Minister of State for Trade and Industry Alvin Tan countered in Parliament on Jul 5 that Singapore’s approach has always been both macro and micro.
MOS Tan highlighted three macro strategies: having an exchange rate-centred monetary policy, which has helped manage inflation; building and maintaining trade links so as to diversify sources of imports and exports; and staying open and connected to the world, to innovation, investments and talent.
“For example, Sanofi has committed to setting up a €400 million vaccine production facility. Such inbound investments create good jobs for Singaporeans and make our economy vibrant and competitive. Strong growth will in turn support job creation, wage growth, and help address inflationary pressures,” he explained.
He then went on to the micro strategic plans.
The Government committed close to S$100 billion over the last two years, with initiatives such as the Job Support Scheme supporting businesses hit by Covid restrictions.
He also said that in anticipation of higher prices, the Government rolled out support for Singaporeans in Budget 2022 including the Jobs and Business Support Package to help businesses and workers, as well as the Household Support Package to help households with their daily needs.
The recent S$1.5 billion support package provides immediate and targeted relief to lower-income and vulnerable Singaporeans, who are disproportionately affected by higher prices, he added.
“As we continue to plan and execute our macro and strategic plans, we also keep our eye firmly on the micro – the ground picture. This is reflected in how we navigate Singapore through the Covid crisis, and support Singaporeans and local businesses during this period of rising costs,” he said.
A unique blend of macro and micro
In a nutshell, the approach includes assessing the world and seeking out opportunities for Singapore while keeping a keen eye on the ground and providing immediate, targeted relief the the vulnerable.
A judicious blend of tight monetary policy and targeted supported fiscal policy carefully calibrated is most appropriate, he added.
His closing comments
Here we reproduce what he said in closing.
“Madam Deputy Speaker allow me to sum up.
I have responded to the Member’s Motion by articulating the Government’s macro and micro approach. We plan and execute for the long term, and at the same time, continue to have the dexterity to zoom into the details that matter on the ground to Singaporeans and to Singaporean businesses.
Rather, we focus on strong job creation and wage growth as the best ways to help Singaporeans tide through these immediate difficult times and ensure that we have sufficient resources to tackle the long-term challenges.
This is our commitment to Singapore. And we will continue to do our utmost to deliver on this commitment, especially in these challenging times.”