Writing in the labour movement’s blog, Minister without portfolio, Mr Chan Chun Sing said that there is also a need to clarify a certain common misperception about NTUC’s various social enterprises – that it enjoys privileges from the Government.
“The truth of the matter here is that NTUC’s social enterprises operate on market principles and have to compete for Government spaces and contracts just like any other commercial enterprises,” he said.
He further attempted to clarify why prices at NTUC’s social enterprises are not significantly lower than that of their competitors when the labour movement’s social enterprises are not run on a purely commercial basis.
He said that the role of NTUC’s social enterprises is to rein in the prices that competitors may charge. He readily admitted that in trying to match the social enterprises’ prices, some of its competitors offer even lower prices.
“If our social enterprises weren’t around, would our competitors still be charging those very same low prices,” the Minister asked.
Even if NTUC’s social enterprises do not enjoy any direct privileges from the Government, it is no secret that the labour movement’s social enterprises are headed by people directly linked with the Government. For example, NTUC Fairprice is headed by the Deputy Speaker of Parliament and MP for Marine Parade GRC, Mr Seah Kian Peng.
Not many businesses in Singapore have the privilege of being headed by PAP MPs, Ministers and other Parliamentary office holders.
And also, as one of the biggest (if not the biggest) players in the areas of insurance, childcare and kindergarten services, eldercare services, pharmaceutical services, foodcourt business and other lifestyle-related services, NTUC’s social enterprises are price-setters, and not price-takers.
The other advantage of course is of course, being a co-operative, NTUC’s social enterprises are not subjected to the taxes other businesses pay.
Addressing such criticisms, NTUC Fairprise’s former CEO Mr Chandra Das said:
“Do you know that FairPrice contributes 20% to Central Cooperative Fund and Singapore Labour Foundation. That’s tax! It doesn’t go to the revenue house or Government treasury but to the SLF or CCF. We have no deductible expense in FairPrice; all our expenditures are non deductibles. So we pay a full 20% tax.”
Blogger Roy Ngerng has used similar arguments in the past, and had suggested that CPF is an indirect tax citizens have to pay (link:Â https://thehearttruths.com/2015/06/13/this-is-how-pap-makes-singaporeans-pay-high-taxes-but-give-back-low-returns/).
