From ‘flexible rents’ to foreign manpower: PSP’s proposals on supporting hawkers and what the government says

SINGAPORE: Fourteen Members of Parliament rose to speak on a motion about supporting hawkers in Singapore, in a debate that started at tea time on Wednesday (Nov 13) and ended in time for supper at 10pm.
The House unanimously approved an amended motion calling on the government to continue its support for hawkers by regularly reviewing policies. 
This would help sustain and grow the hawker culture so that Singaporeans can enjoy good and affordable food while hawkers can earn a fair livelihood, the motion said.
Non-Constituency MP Leong Mun Wai said the Progress Singapore Party’s (PSP) supported the amended motion, which he said “is not too different from the original motion” that he tabled.
During the five-and-a-half-hour debate, Mr Leong and fellow PSP NCMP Hazel Poa put forth their proposals to support hawkers. 
Here are their suggestions and how the government responded:
The social enterprise model for managing hawker centres has resulted in conflicts between hawkers and operators because of the “high costs and onerous contractual conditions”, said Mr Leong.
He proposed that the current social enterprise model be phased out as the contracts of the current operators expire. Instead, hawker centre management should be taken over by a new government agency tentatively called “Hawker Singapore”. 
The new agency will oversee the management of all hawker centres in Singapore and the promotion of hawker culture domestically and internationally, working together with other relevant agencies such as Singapore Tourism Board and Enterprise Singapore, he added. 
Senior Minister of State for Sustainability and the Environment Koh Poh Koon said the social enterprise model was introduced to explore new business models while trying to provide a variety of food options at affordable prices.
Hawker centres need to be vibrant with good visitorship and footfall, and respond to the changing needs of the community, he said. 
“All this will require the right business acumen to put together,” said Dr Koh. “Government agencies do not have the abilities or instincts to operate businesses.”
Such operators have industry knowledge and experience, and many have developed programmes and initiatives to drive visitorship. Some have also provided business advice and support to aspiring hawkers, he added.
They can also curate the food mix in the hawker centre and help hawkers keep up with the trends.
Addressing the concern about stall owners being made to open their stores for a specific number of days or hours, Dr Koh said this may be to meet the community’s needs, but guidelines are in place to take care of hawkers’ well-being. 
Average occupancy at such hawker centres remains high, and stall turnover is low and comparable to that of hawker centres managed by the National Environment Agency (NEA), he added.
Mr Leong proposed that hawker stall rents should not be set by tender. This practice has the “negative effect of driving up headline rentals in hawker centres”, he said. 
One successful tender at Marine Parade Central Market and Food Centre recently exceeded S$10,000 (US$7,500) a month, he said. 
“Instead, we propose a more flexible rent model with the aim of lowering rent and curbing excessive speculation in coffeeshops,” he said. 
Under this model, all hawker stalls will be charged a monthly base rent of S$500, or 3 per cent of gross turnover, whichever is higher. 
Ms Poa also suggested a balloting system for hawker stalls, or a fixed rent model.
The median rent for the majority of cooked food stallholders is around S$1,250 a month. Dr Koh stressed that the government does not use rent for cost recovery and that it can be as low as S$1. 
Rent likely makes up a smaller component of costs for hawkers now, he said, because rentals have remained relatively stable as other costs increased.
Under the current system, the store is awarded to the highest bidder who pays the bid price for the first tenancy period of three years – an “open, transparent and straightforward” process.
The proposal that rent be calculated based on the stall’s gross turnover means that each stall must have a point-of-sale system to track earnings, Dr Koh said.
A balloting system could encourage frivolous applications for popular locations, and a fixed rent system might mean that some hawkers pay much more than they do today, he added.
The rent for the vast majority of cooked food stalls is below the assessed market rent, and the 4 per cent that is above that rate will be lowered after their first tenancy term, he said.
“We have to be quite careful not to abandon a system that has actually worked quite well and benefited many hawkers, just because of a small number of outliers.”
He also said his ministry will implement measures to encourage more realistic bidding behaviour and more details will be announced next year.
To address the manpower shortage, Mr Leong proposed that each cooked food hawker stall, including drinks and cut fruit stalls, should be allowed to employ one work permit holder as a stall assistant.
“Our policy proposal will not undermine the Singaporean character of our hawker centres because only one work permit holder is allowed per stall,” he said. 
The government’s stance of only allowing citizens and permanent residents to work in hawker centres is meant to safeguard this aspect of Singapore’s identity, said Dr Koh.
“A full liberalisation for foreign manpower may alter the nature of our hawker centers significantly,” he said.
He pointed to the recent announcement that hawker stalls will be allowed to hire long-term visit pass holders as assistants from Jan 1 as a way the government is trying to strike a balance. 
“Our hawker centres … are an integral part of our cultural heritage. They are unique and their local nature is something we want to preserve, which is why we talk very carefully about making such moves,” he said.
He said concerns were raised in 2010 about seeing more foreigners working in hawker centres, and Dr Koh said some Singaporeans may still not be able to accept that.
Mr Leong proposed that instead of forcing hawkers to provide “budget meals” at their own expense, the government should pay for targeted food discounts for Pioneer, Merdeka and CHAS cardholders at all hawker centres and provide lower-income households with more CDC vouchers.
“I do not believe that there is any other industry where we contractually force suppliers to sell items below a certain price,” said Mr Leong. 
The budget meal scheme was introduced in 2018 for new coffee shops let out by the Housing and Development Board (HDB). It was extended last year to all other HDB coffee shops, and more recently expanded to private chain operators. 
Senior Minister of State for National Development Sim Ann rejected Mr Leong’s assertion that the provision of budget meals at HDB coffee shops meant that hawkers had to sell them below market prices.
“The prices should be affordable compared to surrounding options, but we do not require them to be lower,” said Ms Sim. 
She added that not every stall has to have a budget meal, as long as the operator of the coffee shop ensures that four to six of such meals are available.
Rent rebates are also provided for the first year that budget meals are provided, and the operator is required to pass on the savings to stall holders who offer the budget meals, said Ms Sim.
Dr Koh also said stall holders under the social enterprise model are not expected to make a loss selling “value meals”. Operators can propose to revise the price and the NEA will review it based on the market situation.
On PSP’s proposal to help vulnerable groups with food discounts and more CDC vouchers, Senior Parliamentary Secretary for Finance Shawn Huang said the government is already providing targeted support to those in need. 
A middle-income household with two young children will get about S$4,400 in rebates, payouts and support this year, while a lower-income household with two young children will get about S$6,500, he said.
In Budget 2024, the government also announced an increase in quarterly Silver Support payments and the income threshold to qualify for support to provide more help to low-income seniors.
Ms Poa also offered a couple of policy suggestions, such as setting up a central procurement system to supply hawkers with ingredients at lower prices through bulk purchasing.
“Hawkers have the option to get their supplies through such arrangements or they could still choose to use their own suppliers if they think that it is of better quality or it gives them some other competitive advantage,” she said.
She said a centralised procurement system for medicines similarly exists in Singapore’s public healthcare sector.
“It would not be a huge stretch to set up a similar centralised procurement system to bulk buy essential raw ingredients used by hawkers in Singapore.”
Some social enterprise operators require hawkers to purchase supplies such as gas and crockery from designated suppliers, said Ms Poa, which has caused unhappiness when the suppliers charge a higher price than the free market.
“Landlords should not be specifying who their tenants should be buying from,” she said, proposing that the Code of Conduct for Leasing of Retail Premises be revised to cover hawkers and prohibit such practices. 
“Contracts that deviate from this must seek the tenant’s agreement and be submitted to the Fair Tenancy Industry Committee, as is the existing practice,” she said.
NEA provides guidelines on the terms of tenancy agreements between operators and hawkers, Dr Koh said. This includes termination clauses, liquidated damages clauses and operating hours.
He also said some social enterprise operators of hawker centres have offered bulk purchasing services, but the take-up has not been good.
“Most already have established relationships with their existing suppliers or are quite particular about the source and quality of the ingredients,” he said.
“Everyone has something they want to put as special, to differentiate themselves from their competitors … Nonetheless, we will continue to support such initiatives where it benefits our hawkers.”