Speech by SMS Sim Ann for the Motion on Hawker Culture
Nov 13, 2024
Introduction
Mr Speaker, the main subject of our discussion today is hawker centres. SMS Koh will be setting out the Government’s approach to hawker centers.
However, some speakers including Mr Leong Mun Wai made references to the Budget Meal scheme in HDB coffee shops, and also we know HDB coffee shops are often mentioned together with hawker centres, although they are regulated differently, so, I would like to make a few points.
Like hawker centers, coffee shops in our HDB heartlands are integral to Singaporeans’ daily lives and serve the needs of Singaporeans.
They are important social nodes in the community, and provide a variety of cooked food options at similar price points to hawker centers.
HDB’s Approach on Coffee Shops
HDB plans for the provision of coffee shops and other commercial amenities in new HDB developments carefully to ensure that HDB residents have convenient access to cooked food options and other daily needs.
Most residents have access to commercial facilities such as shops, food courts or coffee shops within 400m from their homes, or an approximately 5 to 10 minutes’ walk.
By planning for a good supply of coffee shops and other F&B options in every HDB town and estate, we ensure that residents have options to choose from. The competition will also help to moderate cooked food prices overall.
Having said that, over the years, as wages rise, more consumers can afford and are prepared to pay for higher-end meal options. Operators have therefore responded to these trends. We have seen coffee shop menu items change, expand and increase in price points over time. The government continuously pays attention to ground concern about the cost of living and recognize the need for our heartland coffee shops to maintain some lower-priced meals and drinks to cater to those who may not be able to spend as much on cooked food. This includes lower wage workers and retirees.
This would have been hard to achieve if we had continued to leave things entirely to market forces.
The Government therefore needed to intervene, but in a measured way that takes business sustainability into account.
Budget Meal Initiatives
To strike this balance, MND and HDB proactively put in place the Budget Meal initiative in 2018. Budget meals are full meals that are priced affordably as compared to the average price of meals sold at nearby eating places. Typically, they are priced at $3.50 and below.
Since 2018, all new HDB rental coffee shops that are tendered out to operators must provide budget meals. This is done under the Price-Quality Method, or ‘PQM’ in short, tender framework. Under this framework, operators are required to provide six budget meals, as well as a budget drink. I want to take this opportunity to thank Mr Louis Chua for affirming the PQM method.
I would like to clarify that HDB does not, as Mr Leong had suggested, regulate coffee shops to offer Budget Meals “below market prices”. The prices should be affordable compared to surrounding options, but we do not require them to be lower.
Having gained some experience with implementing budget meals at new HDB rental coffee shops, in Apr 2023, HDB extended the budget meal requirement to rental coffee shops that are up for tenancy renewal.
This move coincided with a period of rising food and energy prices and sustained inflation, caused by disruptions following the war in Ukraine and extreme weather.
We know that consumers view coffee shop prices as an everyday expenditure and are sensitive to across-the-board price increases. Hence budget meals became relevant not just to lower income groups, but to everyone who cared about cost of living.
We are glad that the initiative has helped more families to stretch their household budget. At the same time, we are mindful of the need to strike a balance between residents’ needs for affordable food options, and the operators’ and stall holders’ business sustainability.
Unlike what Mr Leong has asserted, we do not require every stall in an HDB-owned coffee shop to offer budget meals.
Generally, an operator of an HDB rental coffee shop is required to provide 4 to 6 budget meals. This requirement can be met by different stalls in the coffee shop. And it is also possible for there to be stalls within an HDB coffee shop that do not participate in offering Budget Meals.
Operators and stall holders have the flexibility to propose the budget meals that they wish to offer during the tender or tenancy renewal process, and are at liberty to determine the prices of all other meals that they offer.
We are constantly engaging the industry and monitoring feedback from consumers, as well as feedback from operators and stall holders, and we are prepared to make adjustments to the scheme, when necessary.
Last year, HDB and GovTech worked together to launch the BudgetMealGoWhere website to help residents locate HDB coffee shops offering budget meals more easily and conveniently. This website now includes listings of recommendations from the public, submitted through the “Great Budget Meal Hunt”, a related initiative which we launched earlier this year to crowdsource recommendations of budget meals in HDB coffee shops.
In the past six months, 126 privately-owned HDB coffee shops have also started offering budget meals and drinks. We call these Community budget meals.
Stalls in privately-owned HDB coffee shops that have voluntarily committed to provide budget meals will display the Community budget meal decal in red and blue.
Now, more than 440 rental and privately-owned coffee shops are providing more than 1,100 budget meals island wide. This means that on average, you can find budget meal options at one in two HDB coffee shops.
We are on track to have all 374 rental HDB coffee shops offer budget meals by 2026, and will continue to engage other operators of privately-owned coffee shops to come on board.
Support for Operators in Providing Budget Meals
HDB supports Budget Meal providers in several ways.
First, for existing HDB rental coffee shop operators, we provide a 5% rent rebate for the first year of tenancy renewal to help them adjust to the new requirements of providing 4 budget food dishes and 2 budget drinks.
The rebate starts as soon as the new requirements are in place and operators are required to pass on the rental discount to participating stall operators. We will intervene if stall holders tell us this did not happen.
Also at the same time, HDB has kept stable the rent it has been collecting from its coffee shops. Over the last 5 years, HDB did not increase the rent for 97% of HDB-owned coffee shops at renewal.
We also stepped up efforts to raise publicity for these coffee shop operators and stalls.
Not only do we want to raise awareness on Budget Meals, but we also want to give recognition and generate interest, so that more may visit these coffee shops and bring business to all stall holders.
Closing Remarks
In closing, sir, although HDB coffee shops are regulated differently from hawker centres, we share the same commitment as MSE and NEA to maintain policies that deliver affordable food, while being mindful of sustainable businesses and livelihoods.
I support the proposed amendment to the motion.