Need to clamp down on subtle profiteering

It has been known for years that many companies, private and government linked companies alike, are always quick to attribute the cost to the slightest rises in cost but are mum when the cost recedes and happily profiting the extra profit. While this phenomenon may also be practising elsewhere, but “honesty” and “integrity” have been extolled by our leaders and foreigners alike, we ought to do better than that. Government is also guilty of “closing one eye” and allow such practices to go on for years. Sometime, a warning or subtle nudging will be able to tame such unscrupulous behaviour in the long run.

Related links: The Fallacy Of Strong SGD and Privatisation of Essential Services

Photo: Broken promise by the government? Lui Tuck Yew, how are you going to answer for this?We urge every Singaporeans reading this to 'share' this all across your FB, Twitter, Forums, social media platforms, etc, etc.UPDATES:Some commenters are pointing out that Dr. Yeo also said in the speech that the fares will 'provide company shareholders a reasonable return'.For this we would like to remind everyone that the basic principle as pledged clearly by the government before the launch of the MRT, was to keep the fares as low as possible, and not to put 'profits' ahead of public interest.Please also note the term "reasonable return" does not equate to "unjustifiable return" or "exorbitant return".Thus we would like to ask again; Are hundreds of million dollars in profits yearly (over the decades) "reasonable returns"? when commuters are forced to cramp into extremely overcrowded trains daily? and when serious MRT service breakdowns happen so frequently? and as a 'public' transport which most Singaporeans are forced to take because cars are simply too expensive?Shall we conduct a poll and see how the majority of the Singaporeans will vote on this?-Admins Say "No" to an overpopulated Singapore__________________________________(Photo: Excerpts from Minister Yeo Ning Hong's speech during a ceremony to mark the delivery of the first two trains at Bishan Depot - The Straits Times, 9th July 1986)Full archived article of the news report: http://newspapers.nl.sg/Digitised/Article/straitstimes19860709-1.2.2.aspx

“MRT will not be allowed to profit at the expense of the public”

Why prices stay up when costs go down

Source: The Straits Times  4 Feb 2012

WHILE the media often reports on price rises in essential items and foodstuffs such as rice, wheat and coffee, subsequent falls in the prices of such items are reported less diligently, affecting the country’s fight against inflation.

For instance, in 2010, the media rushed to report on the doubling of onion and garlic prices owing to bad weather in China and India.

Housewives hoarded onions and garlic and restaurants raised their dining prices.

And around this time, coffee shops increased the prices for coffee and tea citing a hike in commodity prices.

Today, garlic and onion prices have crashed to prices below those publicised in 2010 because of good weather, and the increased planting brought about by the earlier jump in prices.

Prices for tea and robusta coffee, the kind normally used in our daily heartland cuppa, have fallen by up to 15 per cent.

However, the media has been silent on such drops in prices, and restaurants and coffee shops have not reduced their menu prices despite the lower costs.

It may interest readers to know that cocoa prices had fallen by 50 per cent between March and December last year.

Yet, I doubt if we shall ever see Cadbury’s 250g chocolate bar again, although the cocoa price spike was given as a reason for reducing the per bar weight from 250g to 200g, while the price per bar stayed the same.

Rising raw material prices are often cited as the reason for increasing the prices of end-use products. This contributes to a higher rate of inflation in Singapore.

Failing to publicise falling commodity prices is detrimental to consumers’ welfare, as they are not kept informed of actual market conditions and prices, and suffer higher household expenses even when the reasons for the price increases have diminished or disappeared.

Reporting on commodity price trends is difficult and speculative. But one-sided reporting of just price increases – without alerting the public when prices drop – will feed into increased expectations of businesses and the acceptance of higher food costs by consumers, to their own detriment, and fuel inflation.

Lim Wei Jan

Posted in Social Ills in Singapore

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