Tuesday, July 28, 2015

Treat hawker centres as incubators, not soup kitchens !

I had a reputation in the past for being hyper-frugal when I was single. When me and my missus had a date 9 years ago was to look for foodcourt food which comes in huge portions and split a portion between the two of us. Shami Banana Leaf Restaurant at Northpoint in the good old days sells a $7 dollar chicken briyani which made an adequate dinner for a dating couple. In one move, we cut dating costs and had great food along the way.

So I was mildly irritated by the recent exchange between a new age hawker and Vivian Balakrishnan even though I knew that both come from the position that they want to do good for Singapore.

Particularly upsetting to me is that the authorities was willing to go to extremes to set pricing caps on food. The disagreement was over whether fishball noodles even made sense if you cap its cost at $2.70.

Generally speaking, intervention from the government will only do ill for everyone else because business people know how to price their products to maximise revenues. A business can compromise on hygiene, the amount of fish meat, or the portions to create a negative experience for anyone who eat in hawker centres. Poorer folks who live on $2.70 fishball noodles may even develop cancer at a later stage in life because the government cannot regulate everything.

[ To understand why I hate the price cap, think about how much the government hates minimum wages ]

Even worse, where is the freedom for hawkers to innovate ? Do we categorise  a plate of pasta accompanied by a medallion of fish in balsamic vinegar as a fishball noodle as well and cap the offering to $2.70 ? Should we allow civil servants to even create these food taxonomies ?

A better model would be to charge rent as a proportion of hawker sales and reduce the marginal rent as sales increase. eg. First $5,000 revenues results in 20% rental fee, subsequent sales is charged 10% rent. Every year, managers can decide not to renew the stalls with redundant food categories which underperform to maximise food diversity. This aligns the taxpayer/government with the hawker and gives the hawker the ability to manage determine the product and pricing to maximise revenues. If consumers overpay, there is certainty that a fair amount will always be returned to tax-payers.

[ As an added point, having point of sale terminals an allowing EZ-Link cards can give data scientists some insight into food habits of Singaporeans. If you want a Smart City, start here. ]

I think NTUC Foodfare is pandering to voter populism when Singaporeans actually just want a better way to preserve our food culture. The concept the government wants to adopt is that hawker centres are soup kitchens where lower income groups can have access to cheap food. What I absolutely hate the idea that the providers of the welfare are not taxpayers but the hawkers themselves, one of the hardest working people in Singapore and national treasures in their own right.

 [ Can you picture this ludicrous image of senior Administrative officers being paid millions making the decision that hawkers like Douglas Ng is to subsidise for the food for lower income groups ? ]

The approach to hawker centres needs to change.

Hawker centres should be treated like incubators, not soup kitchens.

Managers of hawker stalls are not obligated to create cheap food for citizens. Like Blk 71, a hawker centre's foremost responsibility  is to incubate hawkers like Douglas Ng so that he can evolve into a Damian D'Silva or a Justin Quek in the future. Hawker centres are preservers of Singapore's food culture and a magnet for tourist dollars.  Rents should not be cheap but comes as a form of profit sharing between tax payer and hawker so that the younger generation can invent the cuisine of tomorrow.

Of course this goes back to the problem of lower income groups and how hawker centres may cease to be a place they can afford to eat at. I don't think that's a problem as Singaporeans have grudgingly accepted the pricing and poor quality of foodcourt food for many many years.

Maybe some Singaporeans may have to accept that sometimes cooking at home may be the best way forward.

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