Exemption of GST on rice and other basic food items

It was reported over the weekend that NTUC FairPrice, the island's biggest supermarket chain, has led a 10-15\% increase in the price of rice. Other retailers are expected to follow.

The Government has said that it will not impose price controls as these will hurt importers.

Rice is the staple food for Asians, and this sharp price increase hits the middle and low income Singaporeans most. The poor spend much more as a percentage of their income on basic food items.

The Finance minister has admitted that the imposition of the two percentage point hike in GST rate in July 2007 contributed to the sustained increase in consumer prices, especially in face of the overheated domestic economy and the increase in global demand for agricultural products.

With a buoyant economy, the GST hike enabled the government to achieve a budget surplus of $6.4 billion in financial year 2007.

An exemption of 7\% GST on rice and other basic food items would demonstrate the governments determination to contain the cost of living for lower income Singaporeans, and help to deflate the inflationary pressures that are building up in the economy.

We, the undersigned, call upon the government to exempt GST on rice and other basic food items till the end of 2008.