* published in The Workers’ Party Hammer Newsletter, March 2019
The recent storm over high rental prices in Social Enterprise-run Hawker Centres (SEHC) cast the spotlight on what social enterprises are and how they run public goods. When the plan was presented in parliament in 2013, I expressed concerned that if we gave too much autonomy to the operators to impose rents and other charges to hawkers, when they operated a significant market share of the hawker centres, we might face monopolistic behaviours that would impose high operating cost on hawkers. Hawkers would in turn impose higher food prices on consumers. Although we term the operators as social enterprises (SEs), from the reality of how SEs had run public goods in the past, it was obvious that they did make surpluses; and when they dominated the market, monopolistic behaviours had been observed.
Hence, I sought the assurance of the ministry to monitor the way SEHC are operated. Then-Minister for The Environment and Water Resources, Dr Vivian Balakrishnan, gave his assurance in Parliament that his ministry would keep a tight watch over the way hawkers would be charged.
Fast forward five years and the issue became a national debate when food blogger K.F. Seetoh revealed details of high rental charges and ridiculous terms and working hours that hawkers had to bear with.
Much debate online ensued. Many Singaporeans were angry that commercial operators were allowed to form SEs to manage hawker centres with burdensome terms for hawkers compared to those at NEA-run hawker centres, and that hawkers seemed to be imposed with many other costs beyond the actual rental.
NEA finally acted to stop operators from imposing some onerous conditions, allowing now for early termination with smaller penalties, shortening required operating hours of hawkers, capping the fines that SEHC operators can impose on hawkers and imposing better feedback channels for hawkers.
I believe the unfortunate saga could have been prevented if NEA had indeed taken a very proactive examination of contracts by SEs for hawkers in the five years that SEHC had been operating.
The issue also called into question how government outsources the provision of public goods to third party organisations. The preference thus far has been for social enterprises to run public goods such as childcare and hawker centres. A commercial company has to incorporate a social enterprise entity to bid for such projects. I do not object to social enterprises running public goods, but we must know that they do not work magic and cannot be relied on to fulfill government objectives automatically. As can be seen from revelations of contracts and correspondences between SEHC and hawkers in the recent saga, the SEs tend to behave like typical large landlords, imposing harsh terms on hawkers and using employees who will apply rules strictly on hawkers without mercy. Without government subsidies or interventions, they also cannot work magic to bring about lower food pricing, maintain low rents to hawkers whilst having to manage own costs (including payments to NEA) and be profitable themselves.
I believe one reason this issue has generated so much sympathy for hawkers is perhaps because the situation hawkers faced mirrored the feeling of many SMEs and Singaporeans – squeezed by rent-seeking landlords in a country where costs have become very high. This has caused the ordinary person to feel the stress of making a decent living and small companies being forced out of business. It stems from a mindset of squeezing as much money as possible out of the people. Industrial land, for example, used to be managed by JTC who as a large supplier of such space, could dictate market rents. After JTC divested the industrial factories to Real Estate Investment Trusts (REITs), many of them majority-owned by the government, rents went up steeply. Public transport was outsourced to private companies with the government also benefitting initially from the privatisation. This however backfired when private companies, pressed constantly for profits, cut back drastically on maintenance.
Mr Ngiam Tong Dow, former Permanent Secretary recalled a conversation he once had with the late Mr Lee Kuan Yew over the Certificate of Entitlement (COE) scheme, which he felt was taxing transportation, and hence taxing every man, woman and child in Singapore, from the day of his birth till the day of his death. The late Mr Lee shot back, “Ngiam, are you the Permanent Secretary of the Budget and Revenue Divisions at MOF? … What’s wrong with collecting more money?” (ref: https://www.theonlinecitizen.com/2013/10/01/pap-elitist-dont-feel-for-the-people-ngiam-tong-dow/)
Hawkers today are not spared from this, being squeezed by ever higher rentals and operating costs. A different government mindset, more understanding on the plight of hawkers and a better support system will be needed if we are to help hawkers manage a decent living whilst keeping food costs manageable for all.