Media Release: Five NTUC Co-operatives to absorb GST increases

09 Oct 2003

Media Release: Five NTUC Co-operatives to absorb GST increases

Relief package of $20.8 million to help Singaporeans cushion impact of GST increase

Singapore, 9 October 2003 - Five NTUC Cooperatives and NTUC Club have put together a $20.8 million relief package to cushion the impact of the increase in the Goods and Services Tax (GST) from Jan 2004.

The relief package, led by NTUC Fairprice, NTUC Income, NTUC ChildCare, NTUC Foodfare, NTUC Healthcare and NTUC Club, was announced by NTUC Secretary-General Lim Boon Heng today.

This GST relief package of $20.8 million for 2004 is higher than the $17.6 million that the NTUC Cooperatives have absorbed in 2003.

Speaking at the closing of the National Trades Union Congress' (NTUC) National Delegates' Conference, Mr Lim said, "I am glad that the NTUC Cooperatives are taking the lead to help workers and their families moderate their cost of living."

"The package covers the daily necessities for most households, from the supermarket to food centres, for those who need long-term medication for ailments such as diabetes and heart conditions, to general insurance products and services, and even simple recreational activities such as chalets at Downtown East. There is also additional help for the lower-income families dependent on childcare services."

"Although there are signs of recovery in the economy, it will take some time for the jobs situation to improve. We hope, through this package, to help our members and all workers tide through the difficult period."

Starting January 2004, NTUC FairPrice will absorb 2 % GST on 400 essential items for six months when the proposed GST increase takes place.
On top of this, as Lunar New Year falls in January, NTUC FairPrice will absorb the 1 % GST increase on all items for that month. This will be in addition to the rebates that all union members already enjoy.

NTUC Club will bear up to $850,000 in GST costs, while NTUC Foodfare plans to give workers a 2% saving when the GST increase kicks in. Foodfare which operates 25 foodcourts, coffeeshops and franchise stalls islandwide, is already absorbing the 1 % GST for 2003.

NTUC Income has pledged to bear up to $15 million on the full 5 % GST costs for general insurance premiums, and NTUC Healthcare will cushion the increase on the prices of medicines, pharmaceutical items and dental services for six months by absorbing up to $200,000 on GST costs.

NTUC Childcare absorbed the 1% GST for low income families in 2003. It will, from January 2004, absorb the 2% GST increase for this group of families for the entire year in 2004 in its 38 centres across the island.

Mr Lim said, "The NTUC cooperatives were set up by workers and unions to help members and workers. Therefore, I am pleased to note that the NTUC cooperatives have led by example and absorbed the GST increase for basic necessities. And coming at the occasion of the National Delegates Conference, it sends an important message to all our members and workers that the NTUC cooperatives remain committed to their social objectives, and to the larger cause of the labour movement - to help workers build a better life for themselves and their families."

Since the GST was first implemented in 1994, NTUC and its cooperatives have absorbed part of the tax.

For example, NTUC FairPrice absorbed about $11 million when it absorbed the 3 % GST for two months in 1994, and maintained prices for many essential items. In 2003, NTUC FairPrice has pledged to absorb an estimated $17 million.

Said Mr Lim, "By taking the lead, we hope that other retailers will follow our example. They, too, can play a part to cushion the impact of the GST increase and help Singaporeans in their everyday lives. We will continue to monitor the situation and review the package should the need arise."

Media Release: Five NTUC Co-operatives to absorb GST increases

NTUC Group GST Relief Package for 2004

NTUC co-operatives and NTUC Club announced a package of measures to help soften the impact of another 1% increase in GST in 2004.

Collectively, the GST relief package is estimated to cost the NTUC Group about $20.8 million.