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CDC vouchers’ continuation will depend on needs of the time: Indranee Rajah
Some 1.3 million Singaporean households will each get $800 in CDC vouchers in the 2025 financial year.PHOTO: ST FILE
Anjali Raguraman
UPDATED FEB 21, 2025, 05:42 PM
www.straitstimes.com
SINGAPORE - CDC vouchers have been a mainstay at each Budget since being introduced in June 2020, but this does not mean they will continue to be so in future years.
Asked at The Straits Times’ Feb 19 post-Budget roundtable whether Singaporeans can expect the vouchers to become a permanent part of the annual Budget, Minister in the Prime Minister’s Office Indranee Rajah said the scheme was started to provide targeted assistance.
She recounted how supply and logistics issues drove consumer prices up during the pandemic, while the outbreak of the Russia-Ukraine war in 2022 added to inflationary pressures by further disrupting supply and driving up the price of commodities, including oil.
While the Government tightened monetary policy five times in that period to preserve Singaporeans’ buying power, it saw a need to provide additional assistance.
That was how the CDC Vouchers Scheme was started – to address the “greatest pain point” of food and groceries, without fuelling inflation that a straight cash handout might have, said Ms Indranee.
“You have to look at the genesis of CDC vouchers, which was to provide targeted assistance, and our position has always been that if there’s a need, then we will assist,” she said.
“But if the economy improves and things get better, and the cost of living becomes more manageable, then obviously, there would be less of a need.”
Besides the minister, the other panellists on the post-Budget edition of The Usual Place podcast included Associate Professor Walter Theseira, a labour economist from the Singapore University of Social Sciences; and Mr Musa Fazal, chief policy officer at the Singapore Business Federation.
Earlier in the discussion, Prof Theseira noted that Singaporeans would appreciate the SG60 vouchers that were announced in Budget 2025, which would provide each citizen aged 21 to 59 with $600 in credits and those above 60 getting $200 more.
As with previous CDC vouchers, half the SG60 vouchers can be spent at heartland merchants and hawkers, and half at supermarkets.
“As someone who may not need SG60 vouchers that much... perhaps there could be a permanent scheme like that,” he said.
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Do CDC vouchers add to inflation?
The panel was asked if CDC vouchers were a factor in the rising cost of living, given that some hawkers and suppliers have said they factored the vouchers into their pricing considerations.ST senior business correspondent Claire Huang also asked if it would be a better approach if the Government tackled the root of the problem by addressing costs, which could be done by getting a major supermarket chain like FairPrice to set the tone on the price of essentials.
Some 1.3 million Singaporean households will each get $800 in CDC vouchers in the 2025 financial year.
Prof Theseira said the reality is that heartland merchants and hawkers have had a difficult time in recent years due to rising ingredient costs and other price pressures, whether or not consumers think inflation is real.
They would have been absorbing cost increases for months while trying to figure out when they could raise their prices, and the CDC vouchers may have been a convenient reason “that sound better to us, so that we don’t get unhappy with them”, he added.
“They have to give the consumer a justification for why the prices are going up, and you can’t blame them if they look for reasons that are going to sound maybe more palatable to us as consumers than ‘well, actually, my costs went up and I have to make a living’.”
The best way to ensure that prices are as low as possible is to ensure that large supermarket chains are competing with one another vigorously for business and are driven to make their supply chains more efficient, said Prof Theseira.
Ms Indranee noted that use of CDC vouchers was extended to supermarkets in 2023 due to public feedback. The number of supermarkets, heartland merchants and hawkers that accept the vouchers has also increased with time, giving consumers greater choice in where they can be spent.
“Basically, you want to give people choice,” she said.
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Raising incomes, helping small businesses
While CDC vouchers help in the short term, and Singaporeans expect the Government to intervene when inflation outruns wage growth, the key to tackling cost-of-living concerns is ensuring that people have good jobs, said Prof Theseira.Ms Indranee agreed, saying: “The key strategy actually is not more CDC vouchers... it is how can we raise incomes.”
That was why a large chunk of the money in Budget 2025 was channelled towards boosting the economy to grow opportunities and jobs, while another went towards initiatives to help people upskill and pivot to new opportunities.
With real value-add and productivity growth, Singaporeans can command higher incomes, “which would hopefully in time make less of a need to have CDC vouchers”, she said.
SBF’s Mr Musa said CDC vouchers have a role to play in the transformation journey of heartland enterprises, a group that has lagged in productivity growth and needs additional support.
While these businesses want to become more productive, they are facing rising costs, which include paying their workers a decent wage.
“So we do need to find some way to support some of these enterprises to be able to tide through this difficult period of making a transformation, and I think the CDC vouchers do help,” he said.
- Anjali Raguraman is a correspondent at The Straits Times. She covers politics, as well as consumer stories spanning tourism, retail and F&B.
