The PAP government is hoping to hear from Singaporeans on issues such as whether an HDB flat should become an appreciating asset? Or how the HDB can meet the housing needs of both the rising number of retiring baby boomers and younger Singaporeans at the same time?

Here is the full statement from the Ministry of New Development:

OUR SINGAPORE CONVERSATION ON HOUSING

The Ministry of National Development (MND) invites all Singaporeans to take part in 'Our Singapore Conversation' on Housing, to shape the future of housing policies together. In particular, MND would like to gather views on the four issues highlighted by Minister for National Development Khaw Boon Wan in his 2013 Committee of Supply Budget Debate speech:

Homeownership in Singapore

Today, 90 per cent of households own their homes. This is in line with our priority to promote homeownership among Singaporeans, as an overarching social objective. Public housing is heavily subsidised to help achieve this. An HDB flat is first and foremost a home where couples start their lives together. However, given the high rate of home ownership, have we reached the limit?

As the economy grew rapidly, an HDB flat also became a rapidly appreciating asset which they could use to build their family and a better life, and provide security for their retirement needs.

How should we balance the role of a HDB flat as "a home" and as "an asset" in a future where the pace for capital appreciation may likely be slower?

Types of Public Housing

Currently, there is a range of housing options to meet the diverse needs and financial means of Singaporean households. They include 2-room, 3-room, 4-room, and 5-room HDB Build-to-Order flats, flats offered under the Design, Build & Sell Scheme (DBSS), as well as Executive Condominiums (ECs).

What types of public housing should Singapore have in the future? Should the Government continue to provide such a range of housing types?

Housing Affordability

Home prices have risen over the past few years, due to various reasons such as global liquidity, nsustainable low interest rates, and positive economic sentiments. HDB BTO prices rose to more than five times annual household income, up from four times in 2007. While high prices make home owners happy, it has caused anxiety amongst prospective home buyers.

How can BTO flats be made more affordable?

Monetisation Options for the Elderly

Elderly Singaporeans today rely on CPF funds, personal savings and support from working children for their retirement needs.

For those who need an additional source of income, they can rent out their HDB flat or spare room, sell their HDB flat and move to a Studio Apartment, or take up HDB's Lease Buyback Scheme. As our population ages, we should consider more ways to help our seniors unlock the value in their HDB flat asset, if they wish to do so.

What else can we do to help elderly Singaporeans who wish to monetise their flats?

Join in the Conversation

Over the next three months, MND has set up the following platforms for Singaporeans to join in this national conversation on housing:

Online

More information on the 'Our Singapore Conversation' on Housing is available online at the microsite www.mnd.gov.sg/homesweethome.

Updates on the conversation are also available through MND's Facebook (www.facebook.com/mndsingapore) and Twitter account (www.twitter.com/mndsingapore).

Conversations with Singaporeans

Singaporeans are welcome to participate in the series of OSC conversations on housing by attending the sessions to exchange views with one another. Further information on the schedule is at www.mnd.gov.sg/homesweethome/schedule.)

Singapore's education system has to give everyone an equal chance at success, but in order to achieve this, society also has to accept that there are different pathways to success. 

Source: Channel News Asia

During a dialogue session with Ang Mo Kio residents today (14 Apr), Minister in PMO, Grace Fu, said Singaporeans will continue to pay for healthcare even as the Govt is prepared to shoulder a larger share of healthcare costs.

She said that this is to “promote self-reliance and avoid fiscal problems seen in other countries”.

Ang Mo Kio residents mainly talked and asked about healthcare issues during the dialogue session with Ms Fu. Many are asking for greater subsidies to help Singaporeans cope with rising healthcare costs.

Ms Fu said, “We can have a 20 per cent subsidy or 80 per cent subsidy, but if the total medical bill is very big, any small percentage or even big percentage will be a lot of money for the residents here.”

She noted that compared to other countries like Malaysia, Singapore’s healthcare costs can be higher. One reason is due to drug companies charging different prices in different countries.

She said the government cannot put in place schemes like those in Europe, where there is no co-payment.

She said, “With the very ageing population that we are anticipating, the costs of supporting that system will actually fall on our children. They have to support us with their taxes, so we have to make sure that we do not go down the route of some of the countries or nations that we see are now having great difficulties supporting such a social security system.”

Whatever it is, the fact remains that among the First World Advanced Economies (as defined by IMF)*, the Singapore Govt spends the least in healthcare as percentage of all health spending. The following figures are taken from 2010 data of the World Health Organization (WHO) [Link].

In other words, our Govt is the most “kiam siap” (stingy) when comes to healthcare as compared with the Govts from the rest of the first world economies.

In the data provided by WHO, Singapore’s healthcare spending is only 4% of our GDP, thelowest in the list (see below). And in terms of spending on healthcare as a percentage of all government spending, not surprisingly, the Singapore govt spends only 8%, again, thelowest in the list.

And because the Singapore govt is so “kiam siap”, only willing to spend 36.3% of total health spending, Singapore’s private spending on healthcare as a percentage of total health spending is the highest among the first world economies at 63.7%.

From the graph, you can decide if our current PAP Govt is a caring one or not:

* Hong Kong and Taiwan are not included in the table as WHO does not keep track of data from these 2 places.

This was an answer from the Minister for Transport to a question I filed for the 8 April 2013 Parliament sitting. The question was not reached by the end of Question Time, so a written answer was provided to me.

Mr Gerald Giam Yean Song: To ask the Minister for Transport (a) how many sinkholes have occurred since the start of excavation works for the MRT Downtown Line; (b) how many of these sinkholes caved in again after being filled; (c) how many motorists or pedestrians suffered injury or had their vehicles damaged as a result of these sinkholes; (d) whether this is a reflection of the quality of planning conducted by LTA prior to tunnelling works or such works not being carried out according to plan; and (e) what is the Ministry doing to eliminate the occurrences of such sinkholes which can potentially cause injury or death to motorists or pedestrians.

Mr Lui Tuck Yew:

Sinkholes can occur naturally when earth beneath the surface is eroded, typically by water, resulting in subterranean cavities. In the excavation of underground structures, cavities can form when water or fluvial sand leaks into the excavated area. If these cavities are not detected and filled up in time, they will eventually cause a sinkhole.

For the Downtown Line, there has been only one incident of sinkhole to date. This happened on 16 March 2013 at Woodlands Road. Investigations show that due to the varied nature of the ground conditions, the excavation works of Downtown Line Stage 2 (DTL2) had led to differential ground settlement, causing an underground water pipe to rupture. The soil movement, coupled with water from the ruptured pipe, weakened the ground under the road and resulted in the sinkhole.

On 23 July 2012, there was also an incident of a localised road depression along Bukit Timah Road resulting from tunnelling works for DTL2. The depression was detected promptly and action was taken to remedy it, before it deteriorated to become a sinkhole.

For both incidents, there was no injury to motorists or pedestrians, nor damage to vehicles.

There had been a number of other sinkhole incidents, but these were not related to any MRT construction activity. In the Keppel Road incident in January this year, investigations found that the sinkhole was caused by an old water pipe bursting. A car was trapped but no one was hurt in the incident. In the two cases on Clementi Road in March 2013, preliminary investigations show that the erosion of soil into an old abandoned utility manhole may have caused the sinkhole and led to the road caving in again after the first sinkhole had been filled. A motorcyclist was reported to be slightly injured trying to avoid the sinkhole.

To minimise the occurrence of sinkholes, prior to any major underground construction, LTA carries out comprehensive investigations of ground conditions and ensures that appropriate construction methods are used. Extensive instrumentation is installed to monitor the ground and building settlement at all times. In addition, LTA closely monitors the condition of the roads, especially those near to excavation sites or where tunnelling works are ongoing, to look out for signs of ground settlement or movement. Tunnelling control parameters are also strictly followed to ensure safety. In addition, LTA checks for potholes, cracks and other physical defects on all roads in Singapore regularly.

I assure Members that the safety of motorists is of utmost importance. My Ministry takes a serious view of these incidents. LTA will step up its monitoring efforts. This includes installing more extensometers, which are geotechnical instruments that locate and measure settlement, displacement and deformation in soil and rock, as well as opening up small sections of the pavement or road surface adjacent to excavation sites to physically check for the presence of any voids underneath. To minimise the risk of sinkholes forming due to soil erosion into abandoned utility structures underneath public streets, as in the case of the sinkhole that re-collapsed at Clementi Road, LTA will work with the utility agencies and companies to check their underground structures and records, and to carry out the necessary removal or rectification works. LTA will also work with the utility agencies to tighten the monitoring and maintenance regime to prevent rupture of underground water pipes which will weaken the ground and lead to formation of sinkholes.

—

Get my latest updates. ‘Like’ my Facebook Page.

Gerald Giam

*Article first appeared on http://geraldgiam.sg/

Acting Manpower Minister Tan Chuan-Jin said the government will not be changing its decision on the tightening of foreign manpower policies for the foreseeable future.

*Article first appeared on http://www.channelnewsasia.com/news/singapore/govt-will-not-u-turn-on/63...

~ Article submitted by: Gwee Li Sui ~

I have been called names like “Silly fool” to “Out of your mind” when I told them that I will be back in Singapore for at least the whole of this year. Some may even sacrifice a finger to be in my position.

Many friends have complained to me that during weekend, they do not know what to do or where to go. After a while, many  simply stay at home, watch their DVDs or  sleep the weekend away. After repeating such monotonous activities for a few years, some will  try their luck at a job overseas and if successful, never want to return to their homeland again  after spending a few good years abroad.

I must admit that I do miss the beautiful skyline in Sydney that Singapore does not seem to have – I can only see the HDB flats  dotting our clouded skyline. I also missed the weather that is not too humid even in summer and the air is always crisp and clean. Here, the humidity can drive you crazy and groggy.

In fact, out of the three years that I spent in Sydney, I only fell sick once last year with a bad bout of cough and cold. However, in Singapore, I caught the flu bug regularly and occasionally took MC just to rest and recuperate.

I also don’t feel as tired in Sydney than  in Singapore maybe due mainly to the low humidity level there.  I love to jog in the  vast empty parks  and the greenery can be spellbounding and theraupetic. I have also ran in the Sydney Marathon last year and it wa a memorable expeience.

Singaporeans are increasingly turning into global citizens and they go where the jobs take them.

This is more so when  there is the huge influx of foreigners into our country  and our wages are severely battered by the huge over supply of professional foreign executives.

Many Singaporeans could get at least double the salaries when they venture into Australia, US or even China. I believe that as many as 100, 000 Singaporeans could be working or stuyding abroad at any one time and the numbers will just keep on increasing.

For example, a friend managed to find a job as a nurse in Melbourne and her starting pay immediately doubled once she signed on the dotted line. There is no reason why she doesn’t want to hop on the kangaroo trail and even stay on for the long term in Melbourne.

The working hours are also shorter and the work life balance is real as compared to Singapore. Many employers pay lip service only when it comes to cultivating  a proper work life balance in Singapore.

I have listed five main differences  between living in Singapore and Australia:-

Interaction

People in Sydney generally interacted better than in Singapore.

I remembered been greeted regularly by people that I don’t know in the estate that I lived. For those who don’t greet you, a general nod of the head is commonly practiced when people walked towards one another on the streets.

I find that this simple gesture made me felt alive and cheery. Imagine waking up from the wrong side of the bed and been greeted a few times around your estate while buying the papers or groceries!

The same could not be same in Singapore when even service staff don’t greet you before asking: “What do you want?” almost instantly. Probably only 10% of our service staff will greet their customers here and we are talking about both foreign and local service staff.

I have tried to greet our service staff before making the purchases since I arrived here but have given up after a few tries when my greets were not reciprocated. Sometimes, I even have to say thank you to the service staff for making the purchases!

Here, people generally looked away from you when your eyes accidentally  met either in the lift or MRT trains.  There is a lack of human touch here and perhaps this is why we feel so lonely even when we are surrounded by a sea of people  – we just don’t readily acknowledge the presence of our own fellow Singaporeans around us.

Someone commented to me that he felt like a robot in Singapore as everyone does their own thing and nobody acknowledges the presence of another person around them. This is a sad phenomenon in city living and that is probably why many suicides occurred in big life-less cities.

Space

Its also  true that space is so important when it comes to finding a suitable place to unwind.

Every time when  I returned to Singapore after staying away for a while, the crowd just got larger.

MRTs, malls, bus stops, shops and even public toilets are jam packed with people. I wondered where they came from…

I cherished the large open space that Sydney offers and I usually got a seat in their sub way trains.

I used to jog along parks that hardly have a soul around me. The greenery, solitude  and crispy air allowed me to enjoy the jog in peace. It was also a   time whereby I can quieten down my soul and hear my own breathe as I pounded the ground.

Though I continued my jogging regime here, the humidity, mass of people and lack of greenery have made me realized how much I have missed those huge Sydney parks around my housing estate.

I also dreaded taking our packed MRT trains and found that nowadays there is no peak hour timing anymore as anytime can be a peak hour!

I took the train to Serangoon MRT from Bishan yesterday during the morning peak hour and were literally pushed along as I walked towards the exit. There were people everywhere and they looked like an army of ants out to devour whatever that was in sight.

Singapore is never so crowded before in history and someone has told me that we are nearing five million in population now  – I dread to encounter the day when we hit 6.5 million…

Comparison

I  realised that we like to compare ourselves with one another a lot here.

We also  talked mostly  on money, achievement  and possession.

There is a huge difference in conversational topics, between Aussies and Singaporeans,   when we sat down together and talked over a meal.

Aussies like to talk about sports, family and their hobbies. Its pretty amazing that they don’t really want to talk about their work after office hour. Maybe they are sick of their work and never want to talk about it when they are off duty.

They hardly mention anything about their academic achievements also as maybe employers  don’t really give it much emphasis when they look for potential employees.

Their favourite topic is sports and they can go on talking about their national sports – rugby –  for an hour!

However,  I find that people here tend to talk  about their  work, educational achievements and type of housing/car they have.

I always find it difficult to hold down a comfortable conversation with my peers here without feeling inadequate as I am not really very highly qualified or achieved a lot in my career. 

That is probably why in Singapore, many people I know seldom want to chill out after work as they may feel that they are being routinely checked out by their friends when they meet out together. Of course, if you are doing well, you will feel great during gatherings but if you are just cruising along  in your career or worse not working at all, you may not want to turn up in any of such get-togethers.

Many people I met also took up extra degrees and masters during evening time in order to stay competitive. One even only worked part time in order to finish her bachelor thesis!

When we rate our friends  from an achievement perspective, we are actually treating them like a commodity and fail to accord them the proper respect as an individual.

Let us stop talking about work for once when we gather  and show care and concern by checking on the other person’s personal/family issue.  If he is really our friend, he deserves our utmost attention and respect for who he is and not for what he is.

Foreigners

I can’t help but feel that I am like a foreigner in my own country and I also find it tough to reconcile with the  fact that I have to defend this huge foreigner contingent when there is a war-like situation here.

To me, Singapore is no different from Sydney now. Sydney has a population of 8 million people and at least half are emigrants.

Here, one in three people probably is a foreigner migrant or worker. In Chinatown, the proportion may even be 2 foreigners to one local Singaporean! I have also purposely missed out on visiting Chinatown during this year’s Chinese new year as I knew that the place would be infested withf oreigners.

I also remembered while on a train journey  to Tampines, I was surrounded by people who spoke strange languages that I could not understand. I thought that I was still in Sydney as the city is also besieged with Asian migrants from Philippines, Vietnam, India, Egypt, Iran, Pakistan, China among others.

In the city, Sydney is like another Asian town similar to Seoul, Tokyo, Hong Kong or Manila. All the whites  have actually left for Queensland where the property is cheaper and also there are lesser Asians.

Let me reiterate an incident on  the serious foreigner population  problem we have here.

I was  approached to do a phone interview by Yahoo Singapore on cyber bullying a few days ago and the person who  emailed me was a permanent resident (PR)  from India.

The one that contacted me  on the phone was also a PR from India! I have checked with them both and they have confirmed their residence status with  me.

Like many Singaporeans here, I feel like a foreigner in my own land and the loyalty factor is really missing from many of us these days. I do not really miss coming back anymore as it’s like returning to a land that is occupied by swarms of foreigners.

Freedom

Whenever I am in Singapore, I just felt that there is a lack of freedom here as compared to Australia. Maybe the lack of a free press and proper human rights have given me this feeling that I am living in a huge prison! I always want to run away for a year or two to enjoy some freedom elsewhere before returning to Singapore for a visit.

This feeling only manifested  itself  during the past few years when the foreigner population has really gone out of hand. I used to look forward to returning to my home land after a long trip away but not anymore now…

People here  are generally afraid to criticize the government and tend to look around their shoulder when they do so – almost in a frightening whispering tone.

While living in Australia, there is this free spirit that inhibits most of us staying  there and I thoroughly enjoy the cosmopolitan culture and care free attitude.

We talk about anything under the sun and seldom need to hold back our expression even if it carries an anti-establishment tone.

It is difficult to feel free when everything is so controlled and stifling here. There is simply too much order in our country and everything has to be efficient and well-run.

Sometimes, a little disorder is good for the creative juices to run wild. Studies have shown that when people are given not too many rules to operate in an environment, they will exercise more of their creative right brain functions. They don’t feel as inhibited when they operate in a flexible work environment and given some room to make mistakes.

I also miss the Newtown art culture in Sydney whereby there is a whole string of art and craft shops and roadside cafes. It is something like our Holland Village but larger in scale and intensity. Its is one of my favourite haunt in Sydney.

Our art culture can only improve if we allow the full flow of freedom of expression and we should also encourage dissent and out-of-the-box ideas.

A yes-sir mentality will only breed  group-think and a follower attitude. That is probably why Singaporeans tend to have a herd mentality instinct as they try to find safety in numbers even though the direction many people have taken could be the wrong one.

We saw how Singaporeans go all out to buy properties last year even though housing prices border on the incredulous. People simply do not want to miss out on the property market and plunge right in with both their eyes closed. I wonder how many people will have difficulty paying their mortgages when the economy goes south.

Conclusion

I hope that I can adapt well to my own country after been away for the past few years. I told myself that in spite of all the negativity, Singapore is still my home land of which I must be proud of.

Though I landed at the airport with a heavy heart, I felt livened whenever I saw familiar faces and old landmarks. These are the stuff that made me feel Singaporean and after two weeks, I am still looking up on my old friends and favorite haunts.

If you recognize me on the road, do feel free to  have a short chat with me – I promise that I won’t try to chew my gum and talk at the same time!
 

Thanks & Warmest Regards,

Gilbert Goh

Founder of Transitioning.org & Chief Organizer of the 16 Feb & 1 May protest.

*Article first appeared on http://www.tremeritus.com/2011/02/24/gilbert-goh-my-home-coming/

ST carried a splendid interview with DPM Tharman Shamugaratnam today.

Here are some key points: He said that no, we should not use reserves, but the G is willing to see if more of the income generated by the reserves can be used to fund social policies. Right now, that’s capped at half of income.

Also, he said that there has been no U-turn on foreign worker policy, but it’s not going to be tightened further too. It will be capped at one-third of workforce.

What’s more interesting than the newspoints is how he strove to build new concepts around all themes. Like meritocracy.

He said: “We’ve got to be a broader meritocracy recognising different strengths and different individuals, but also a continuous meritocracy where it doesn’t matter so much what happened when you’re in Sec 4 or JC 2 or when you finish your polytechnic or ITE (course), but what happens after that.”

“We are a meritocracy that’s still a bit too much defined by what happened in your school years or your post-secondary years.”

Mr Tharman, a former education minister, observed that the education system has created two groups of students.

One group know their strengths, but are not “sufficiently aware of their weaknesses, and not sufficiently aware of the strengths of others”.

The other group have not done as well in school and are “very aware of what they didn’t achieve, but not enough of them have discovered their strengths”.

That is true.

An academic caste system appears to have developed over the years. This is based on whether you come from the right schools and therefore, mix with the right people. It is a system that is being and will be perpetuated by the way alumni have priority in enrolling their children in those right schools.

In the National Conversation on education, this “academic caste” is something to think about even as we strive to eliminate the stress from the examination system and work towards a more holistic view of what sort of students we want to build. According to ST, some participants had asked that even brand name schools offer all academic courses, to break down social barriers and encourage mixing. It’s something to consider.

It is also clear that the smart ones know they are smart and this leads to a sense of entitlement: that better grades and coming from the best schools is something that others should respect and reward – for as long as possible. Perhaps, this is why a Robert Half survey reported today talked about the Gen Y worker who wants everything “now”.

Another concept Mr Tharman raised was about the role of the People’s Action Party Government – that it should be dominant but not dominating. Sounds good.  But it takes two hands to clap. Even if the G decides to reduce its presence in some sectors, you can bet that some people will still insist that it eliminates all ills and be responsible for all aspects of life here.

What’s even more interesting is what he said about the political system.

He said that part of a healthy political system is to have a “decent opposition in Parliament and outside”. Pretty odd for a member of the ruling party to say something like this. He will be in a pickle if he was asked to define “decent presence”. A decent presence that will force the PAP to be just dominant, but not dominating?

He also said that the trend towards having smaller GRCs can be “moved a little further” in the same direction. So three-member GRCs or more single-seat wards? Seems this can be viewed two ways: the PAP G no longer thinks that big GRCs will benefit its electoral chances (witness Aljunied GRC) and might well be a bane. Or is it a way to build a decent opposition presence in Parliament? Can’t be.

Looks like the PAP has decided to bite the bullet and acknowledge that it can’t have all the seats in Parliament and wants to seek some kind of accommodation with its critics.

In fact, DPM Tharman’s comments on social media are astoundingly accommodating: “It is a plus that you have social media because a lot more people are involved in commenting and thinking about issues but it’s got to evolve further, so that it matures and you’ve got a more even-handed disposition. We also have to evolve to a situation where absurd or speculative claims do not propagate so easily and get bought into and circulated so breezily, even by the intelligentsia. The social media can be critical of Government and probably always will be. It’s a useful check. But people have to be a lot more sceptical about what’s put out there as well.”

Bertha Henson

*Article first appeared on http://www.breakfastnetwork.sg/?p=3694

A ‘foreign talent’ PhD scholar at the Department of Political Science in NUS wrote an article [Link] on Global Times.

In the article, the author talked about Singapore’s middle class. She said Singapore’s middle class enjoys “substantial subsidies” from the Singapore government, using Singapore’s public housing policy as a “prominent” example.

The FT scholar said, “Under the generous public housing policy in Singapore, more than 90 percent Singapore citizens have the qualifications to buy Housing and Development Board (HDB) apartments with a price far below the market value, leaving only the affluent ineligible.”

“In Singapore, the HDB apartments are relatively luxurious. Many flats have three to four bedrooms, two toilets and bright and spacious living rooms. And the government also puts efforts into renovating and maintaining the apartments.”

She described the HDB she rented, “The HDB flat I rent has been renovated recently. Pipelines and wires in toilets and kitchens have been changed, the house has been re-tiled, and a commode and shower facilities as well as a completely new security door have been installed. The project is subsidized by the government and my landlord only needs to bear one-tenth of the renovation costs.”

She said that such generous welfare policies from the Singapore government help establish a “greenhouse” for middle classes in Singapore. That is, “under the government’s effective central regulation and control, people’s material lives have been improved greatly.”

She then switched focus and started to target the recent Population White Paper protest at Hong Lim Park in February 2013. She sees the protest as a demonstration against foreign immigrants.

She said, “In fact, the demonstrations against foreign immigrants in February were a challenge to Singapore’s development model. For a long time, the Singaporean government has tried to attract international talent through generous welfare benefits, so as to establish Singapore’s superiority of talent and attract international investment.”

“However, with the arrival of new immigrants, the middle class in Singapore has been under greater pressure. Higher costs of living and unchanged salary levels make many people want to use their votes to force the government to change its immigration policy.”

Without quoting sources, she said many “scholars” have pointed out that “after the founding of the country, the number of outstanding skilled workers and university graduates fluent in English cultivated by Singapore has been far ahead of neighboring countries”.

But she said this advantage, which has attracted international investors, is slowly being eroded with the development of neighboring countries.

“Singapore’s superiority in talent is becoming weaker,” she said.

Finally, the truth came out from her. She concluded by saying, “Indeed, restrictions on immigration can reduce domestic competition and provide the middle class in the greenhouse with a breathing spell.”

“However, in the long run, similar policies will also force investors to turn to other talent highlands and the running of the greenhouse will be difficult to sustain. The middle class may have to work harder to sustain their own Eden.”

In short, the FT scholar is saying if FTs are restricted, investors will go elsewhere to look for talent and Singapore’s middle class will be doomed on their own.

It is not known if this FT scholar actually wrote the piece in English [Link]. If she really did and given that she is a foreign PhD scholar sponsored by NUS, then Singapore may really be doomed with this sort of talent flooding Singapore.

* Global Times is an English-language daily under the auspices of the People’s Daily newspaper owned by the Communist Party of China. Global Times focuses on international issues.

TR Emeritus
*Article first appeared on www.TREmeritus.com
 

Ask DPM Tharman

FOREIGN WORKERS: Keep it at one-third

DPM Tharman Shanmugaratnam answers the most popular question voted by readers: How much more of a tightening will take place in terms of the foreign worker inflow? How will the Government decide that the goal of restructuring is achieved? Is it purely by looking at productivity growth rates?

TRANSCRIPT

ST: Singaporeans are asking how much more of a tightening will take place in terms of the foreign worker inflow, and how will the Government decide when the goal of restructuring has been achieved? Will it be by looking purely at productivity gains?

A: First, what's our objective? Our objective is to ensure that the proportion of foreigners in our workforce does not keep going up, year after year after year. We've got to keep it at a steady proportion. And we decided in 2010 to go for one-third, to try and cap it at about one-third the workforce. From year to year you may get some bumps especially when the construction sector is surging, for infrastructural needs, you might get it going a little beyond one-third. But over the long term let's try and keep it at about one-third.

Now, there are sectors and industries which can't do without foreign workers. Construction is a very good example. The marine sector to some extent. Even some services industries like health care will need foreigners, will need foreign workers.

But it's important that even in those areas, where you can't find enough Singaporeans to do the jobs, we reduce reliance on manpower. The raw fact of the matter is that the sectors which are most dependent on foreigners are also the sectors with the lowest levels of productivity compared to global leaders and which have the most scope to catch up, to upgrade, to restructure.

And we have to do that, because that's the only way in which local wages will go up over time on a sustained basis. And in fact the same sectors - construction, F&B, some parts of the retail sector - are the ones with not only relatively low levels of productivity but sectors where local wages haven't moved up enough. In fact they have been quite stagnant at the lower end of the workforce. So we have to make this move.

That's our basic objective. But it's very important how we go about this. Make sure that at the end of the process we still have an SME sector. We must have an SME sector not just for economic reasons but because they're part of the lifeblood of our society. So we're providing very strong support for our SMEs during this process. They take some of the pain because of foreign worker levies and dependency ratios being tightened.

But we're providing very strong support for any SME that wants to upgrade, whether it's equipment or software or training of the workers, or even training of the management. And we have to find ways in which large companies can help small companies in this game.

ST: DPM, we've seen several rounds of the tightening of the foreign worker policy. Do you see that continuing in the next few years and when will we reach a point where we can say that it's time to stop?

A: Well, we don't plan to tighten further but it depends on whether the ratio of foreigners in the workforce starts rising beyond 33 per cent, beyond one-third, and is rising not just for short-term, cyclical reasons but rising for structural reasons. If it keeps going up, then we will have to tighten further.

If we see that productivity is still languishing and that not enough effort is being made to reduce manpower reliance in the sectors where it is possible, then we will have to tighten further. So, we make our objectives very clear - reduce manpower reliance and raise productivity (so we) keep the ratio of foreigners in the workforce to about one-third over the long term. And if we achieve that, we won't need to tighten further.

ST: Why was the decision to take one-third, why was the percentage chosen?

A: This was decided as part of the economic strategies committee. And we recommended one-third because the starting point was that we were already getting close to one-third. We were at about 32 per cent. And our basic position is, let's not let it rise continuously beyond that level.

This excludes the foreign maids. Let's not let it rise beyond that level significantly. If we can in the very long term reduce it below one-third, well, so much the better, but it's extremely difficult to achieve that in the economy we have because our SMEs, in particular, are significantly dependant on foreign workers in a whole range of sectors.

ST: On hindsight, do you think this process of restructuring should have begun earlier?

A: I think on hindsight it could have begun earlier. We have to understand what happened in the last decade. The bulk of the growth in the foreign workforce took place between 2005 and 2007. And during the period 2005 -2007, we were recovering from a very rough first half of the decade. Very rough not in terms of GDP growth, but very rough in terms of jobs and wage growth for Singaporeans, particularly at the lower end. So a lot of the policy thinking, a lot of the policy mindset was one of creating jobs, bringing unemployment down.

It was close to 5 per cent. We wanted to bring it down and we wanted to get a lift in wages for the average worker and the low income worker. In fact, we achieved that. And we achieved that by allowing firms to get the labour they needed in order to be able to take on orders and thereby create demand for Singaporeans as well.

But there was a problem, because the ease with which labour was made available gave little incentive for firms to upgrade and improve productivity. That's the first problem. Second problem is that although jobs were being made available and unemployment was coming down - which was good for households because in a typical household more people were able to get some work, part-time or full-time, at the lower end - but wage levels at the low end, wage levels at the low end, stagnated. They stagnated in the first half of the decade especially.

There was some lift in the 2nd half of the decade but not enough. So that is a concern. If we carry on with that strategy, productivity will remain weak or stagnant and it will be hard to lift wages at the bottom end. So we have to shift course.

ST: So at what point do you say that the restructuring has succeeded and can stop? Is there a point?

A: Well, we're now an upper middle income country together with Hong Kong, to some extent Taiwan and (South) Korea although their income levels are a little lower. Most Singaporeans, if you ask Singaporeans, any broad-based survey, what they like, they'd like better jobs, they'd like their pay to go up over time more than inflation.

We're not satisfied with our current standard of living and quality of life. Making sure the average Singaporean is able to move up, a good job, paying well and with a good work-life balance. I think that's a very important objective. And we're not near that yet.

In this decade we want to make a significant improvement, very significant improvement from productivity levels that are about 70 per cent that of the global leaders on average, in some sectors less than half of the global leaders. I don't think we can get to 100 per cent in 10 years. It takes a much longer time but we've got to get much closer.

*Article first appeared on 

Go to Singapolitics for more stories.

In the past, the justification for minimal action on raising wages for the poorest and least well off in society was that the government wouldn't be able to ensure economic competitiveness in the region if it raised wages beyond a certain amount or implemented a minimum wage. 

Now we are reaping the effects of this race to the bottom. Unsustainable working conditions, lax enforcement of employment rights and scant wages will be the nail in the coffin that drives able workers to more attractive markets. We will also see a decrease in economic competitiveness if frequent labour disruption becomes a more pronounced trend. 

So even as we seem to abide by the rule "give a person an inch and they'll take a mile" in governance, we will see that there is an increasing need for certain investments to be made which might not have an economically driven ROI, but more of a social payoff for greater stability and employee well-being. This will in turn have a ripple effect in sustaining the well-being of society as a whole. Happier workers make for a more productive and happier population.

Potential solutions here: 

1) Foreign workers may be willing to work for less, but it does not mean that we should pay them scant wages. We may need to look at a calibrated minimum wage that is catered according to the skill sets required by each sector. This may be calibrated according to factors such as intensity of menial labour, level of danger, complexity of skills required, etc. Wages should be competitive upwards, like white-collar jobs, not downwards. It is this opposing cycle that is forcing the income gap further apart. 

2) People tend to ask, whose pockets will the wages come from. Then we will need to look at the other overheads involved in running a business that suppress the ability of employers to dole out higher wages, ie. Property rental

3) Singaporeans First – I’m not advocating shutting off the tap on foreign labour completely. It is an irresponsible statement to make and one that is not sustainable for our economic model. But we also need to look at how to better match people with available jobs. One area to look at is potentially establishing more local employment agencies within constituencies. Currently, CDC tends to match potential low-wage workers with job opportunities that are too far away from their homes. Throw in transportation costs, time spent away from children, time travelling, and the cost-benefit analysis weighs against working in such jobs. We could look into proximity-based matching of jobs for this income group. This will make it easier for lower-income Singaporeans to find suitable jobs. 

Do share your thoughts?

Nicole 

Elections may not be due anytime soon but the government is already embarking on radical moves to win back voters.

With election three years away, the problem-besieged government is striving hard to win back votes lost in recent elections.

In quick succession, it announced several measures in response to rising complaints of Singaporeans, including the high costs of public housing and new cars as well as congested public transport.

It was poor planning of these issues that forced Prime Minister Lee Hsien Loong to apologise to the nation in the 2011 election campaign.

The most radical proposal involves resolving the spiralling costs of public housing that may cut prices of new homes in non-mature estates by 30%.

Analysts said that if it could pull it off without damaging the confidence of the whole property market, the ruling party could regain a bit of its lost support.

It was the mass building of cheap flats that helped put the People’s Action Party (PAP) in power in the 60s, but the current housing setbacks are threatening its downfall.

In a recent interview with The Straits Times, Minister of National Development Khaw Boon Wan announced a critical policy rethink to make it cheaper for young Singaporeans.

The minister wants to target new flats in non-mature estates to cost around “four years of salary” – instead of the current 5.5 years – which could reduce prices by 30%.

This was followed more recently by the Transport Ministry’s announcement that from June 24, mass transit commuters to the city area before 7.45am on weekdays will travel free of charge.

It will be a one-year trial to reduce congestion by staggering travelling during morning peak hours.

This made people sit up because it is very rare to see the profit-minded PAP government provide free service even to the neediest of causes.

In addition, Transport Minister Liu Tuck Yew announced that the government is looking into opening up competition for bus routes over the next two years.

Currently, public buses are run by only two companies, both government-controlled. Allowing outsiders into the trade would mark a new milestone.

In an earlier related move, the authorities increased the downpayment for the purchase of a new car by up to 50%. The loan period was also cut from 10 to five years.

This forced down the value of a COE (certificate of eligibility) that is needed to buy a car, and therefore, the price of the vehicle.

Meanwhile, the government has pledged that it will not be changing its decision on the tightening of foreign manpower policies for the foreseeable future.

Should affected companies close down, assistance will be provided to them and their workers to find alternatives, said Manpower Minister Tan Thuan Jin.

So far, the details of the change in public housing policy have not been released. As a result, many people regard it as merely a definitive statement of intent, rather than achievement.

However, Singaporeans are generally giving the ruling party credit for trying, but preferring to wait for the results to materialise before passing judgment.

In recent years, the level of trust that Singaporeans have placed on their leaders is low compared to that accorded to the first generation PAP leadership.

There were other praiseworthy efforts, like Finance Minister Tharman Shanmugaratnam’s Wealth Tax announced in his 2014 budget, which included higher registration fees for high value cars and additional levies on foreign workers.

The revenue raised was partly used to subsidise 40% of pay hikes that employers may give to low-income workers. It was aimed at narrowing the gap between the rich and poor.

These problems are among the most serious faced by Singaporeans, next to excessive immigration.

They are giving the republic the dubious distinction of being one of the most expensive cities in the world – as well as contributing to the extreme reluctance of young Singaporeans to have children.

The list of problems the government faces today is long and will take a lot more efforts than the present ones – and political will – to resolve.

On top of the list is excessive immigration, especially the admission of more than 140,000 S-Pass professionals and middle-ranking managers to work in the city-state and thus undercutting locals.

Some people are cynical about the effectiveness of the new measures on housing and transportation as long as mass import of foreigners continues.

They now make up nearly 40% of the population. A recent White Paper on Population projected a 6.9 million population by 2030, up from the current 5.3 million.

Khaw has suggested that the authorities may even do away with the income ceiling for Build-To-Order public flats for first-time buyers.

This would make them open to all first-time Singaporeans. He declared that “their Singapore dream of owning their own homes, like their parents’, is safe”.

Khaw, who is also chairman of the PAP, said to do that, the Housing and Development Board (HDB) “will no longer be a price follower, but instead act to be a price setter”.

This set off a chorus of public complaints from people who had suffered from high prices all these years.

“Public housing prices should never have followed the trend of the free-wheeling private market,” said a writer. “But past ministers in charge – with an eye for profits – just turned a blind eye to it for decades.”

Because of that, another added, resale HDB prices had increased by 80% over the past six years, putting them out of reach of many new buyers.

“You are the story or you are also writing the story,” he said.

SEAH CHIANG NEE

*Article first appeared on http://thestar.com.my/columnists/story.asp?file=/2013/4/20/columnists/insightdownsouth/12996939&sec=Insight%20Down%20South

Foreigners should respect local norms and locals should appreciate foreigners' contributions, said Deputy Prime Minister Teo Chee Hean at the National Community Engagement Programme dialogue on Saturday.

In this excerpt, he also speaks about rising religiosity and the need to focus on what Singaporeans have in common, rather than emphasise the differences.

Fundamental to Singapore's history and national identity is that we are an open and inclusive society, and we must always remain so.

Multi-racialism pervades all aspects of Singaporean life. We celebrate diversity, and respect the culture and practices of others. We focus on our commonalities rather than accentuate the differences.In spite of the differences in language, religion and culture, Singaporeans have come together as one people.

Our shared experiences shape our collective outlook, pulling us together as a society, and honing our collective instincts as one people. As our national pledge reminds us, we are one united people, regardless of race, language or religion.

These are some of the reasons that continue to make Singapore an attractive location to people from beyond our shores.

At the same time, we know that there are concerns about Singapore taking in too many foreigners, and too quickly. We have already slowed the inflow of new permanent residents and significantly slowed down the intake of new foreign workers.

Those who become permanent residents or Singapore citizens choose to make a long-term commitment to Singapore - they share our values, hopes and aspirations. Like many of our own parents and grandparents who came to Singapore decades ago, these new immigrants believe in the promise of our nation and what Singapore stands for.

This is what attracts them. They want to integrate and do their part to make Singapore better and stronger. We should help them to do so.

They include foreign spouses of Singaporeans. In 2011, there were 9,000 marriages involving a Singaporean and a non-Singaporean, making up about 40 per cent of marriages involving Singaporeans.

There are also those who come here to work, and help bring new skills and connections to the region and beyond.

The Government, unions and businesses have been working together to promote fair, responsible and merit-based employment practices among employers, employees and the general public.

We will ensure that companies and employers maintain a level playing field at the workplace, and give fair consideration to Singaporeans for recruitment and promotion opportunities.

Even as we maintain an open environment in Singapore, foreigners working here must understand that they too bear a responsibility to the local community, and should respect Singaporean values and norms.

This also applies to the group of foreign workers who are here to provide us a service, such as those in construction and estate maintenance. They too have to abide by our social norms and values.

At the same time, we should treat them with respect, and appreciate the work they do and the services that they provide for us. So I was quite sad to learn about the abuse of health-care workers in our hospitals because they help to take care of us and our loved ones when we need them most.

With increasing globalisation, we must always be mindful that Singapore is a small country in a much larger global community. As an open society, we are always subject to influences from outside. These linkages help to keep us connected to the world and we have to continually evolve and adapt to new ideas and influences. This is the positive side.

At the same time, we need to be careful not to bend to external influences indiscriminately, because there can be a negative side too.

With the widespread use of the Internet, many people are increasingly forming online groups, or finding common ground with others who may live thousands of kilometres away in different countries with different social contexts.

While it can open our minds and expose us to new ideas, we should be mindful about absorbing teachings or practices which may not be appropriate for our social context, as these will threaten our social cohesion, and risk the social capital we have built up over the years.

If one group or religion pushes hard to have its views and beliefs applied to the society at large, others will also want to do the same. Thus, our practices must be adapted to suit our local context and be aligned with our social norms and practices.

Anecdotally, there is an increasing trend of greater religiosity in Singapore. This is happening globally as well, and not just in Singapore. Accompanying this, there is an increasing tendency towards assertiveness and the projection of religion into the public sphere.

It is therefore even more important than before that we remain a country where people respect the beliefs and views of others. To remain strong and cohesive, we must focus not on the differences between groups but what we have in common, and unites us.

Fundamentally, all religions advocate certain moral precepts to help us become better human beings. And there is substantial common ground in the values espoused by the different religions. They all believe in fairness and justice, and helping those who are less fortunate.

So we may be of different faiths but we can and should treat one another with respect and compassion, and not denigrate others' beliefs.

Indeed, it is when we focus on what we have in common, that we complement one another, and make us stronger as one people.

We must not be tempted by the cloak of anonymity offered by the Internet to denigrate the faiths of others - otherwise, social relations will deteriorate rapidly.

Unfortunately we have seen such examples in Singapore. Let us focus on what we have in common and expand our common spaces, rather than pick on the differences which divide us.

With reference to my legal action to block our government’s loan commitment to the IMF you may have heard me say that I am not necessarily opposed to giving the IMF more resources.  I must now admit that in light of continuing events in Europe I may have to revise my original statements.

I said that I was not necessarily opposed to the IMF goal per se, for two reasons.  Firstly, it may be beneficial if it prevents another financial crisis like 2008 that led to a catastrophic slump in demand for our exports.  Secondly, my opposition to the loan pledge is founded on considerations of rule of law and democracy. In my view, and that of a majority of other Singaporeans, who find the AG’s arguments extremely evasive and nonsensical, our loan commitment to the IMF is caught by a law that requires it to get Presidential and Parliamentary approval first.

So, I stressed that I had no objections to the IMF’s firewall fund, per se, in order not to co-mingle an issue affecting our rights to representative democracy at home in Singapore, with general opposition to the IMF, already out there.

In fact my action was just a mirror of that taken by the Auditor General who caught a soft loan to the World Bank’s International Development Association, in breach of the same Act.  That loan was scrapped, raised again and put through the correct procedures, namely that Presidential approval was sought (see here).

Before you read any further let’s have a quick quiz. Rank the citizens of these States and Cities in order of standard of living from prosperous to conditions of austerity. In Europe consider the citizens of Italy, Germany, Greece and Portugal. In south East Asia consider the citizens of Taipei, Singapore and Kuala Lumpur. OK, now read on.

I have repeatedly said that (see here) everyone knows that the hidden objective of Christine Lagarde’s request for an extra $430 billion firewall, to which our Finance Minister on behalf of the PAP government readily agreed to make a generous contribution, is to prop up the Euro and to support the struggling peripheral members and their insolvent financial systems. Don’t be fooled by the fiction that Minister Tharman was careful to propagate in his answer to a carefully stage-managed Parliamentary question from one of his backbenchers.  Then he said

“There are firm commitments to increase resources made available to the IMF by over $430 billion… These resources will be available for the whole membership of the IMF, and not earmarked for any particular region.”

Anyone who doubts that the bulk of IMF lending is going to the Euro Zone has only to look at the latest IMF quarterly report which shows that 88% of lending is to Europe and the top three borrowers are Greece, Portugal and Ireland.

New evidence has emerged that these countries may not be so meriting of our charity after all.  A new study by the European Central Bank (ECB) (see New York Times report here) has suggested somewhat controversially that the Germans may be being misused. Germans considered the prosperous people of Europe, have been asked to dig deep into their own pockets to bail out the rest of the Euro Zone. But are they actually poorer than the citizens of many of the countries they are being asked to support?

More than that , when I read the New York Times article I got the eerie feeling that that author was talking about Singapore. See this extract:

“The study was based on an exhaustive survey of 62,000 households in 15 of the 17 euro zone countries, which showed that the median net wealth of German households was only half that of Greek households, less than a third of Spanish households and less than one-fifth of Cypriot households. Much of the gap stemmed from the low rate of homeownership in Germany. In the other countries, real estate was the main source of household wealth.”

While German households were well ahead on measures of income and comparative unemployment rates the survey did have some surprising conclusions such as that Italians are land-rich even if average incomes are low. However, in language that seems uncannily reminiscent of how Singaporeans live, the article goes on to say that

“The fact is that many Germans struggle economically…Although extreme poverty is relatively rare, millions of Germans live in drab concrete apartment blocks, ride the subway and do their shopping at Aldi, the ubiquitous discount grocery chain.”

Now read this and tell me whether this describes Germany or Singapore? :

“Germans are intentionally misled to believe there is less poverty at home than there actually is…People think we’re the richest country in the world, that we have an especially strong social safety net, but these are just half-truths.”

Substitute HDB for “concrete apartment blocks” and NTUC Fairprice for Aldi and the article could be describing Singaporeans. The big difference is that we are not intentionally misled to believe that we have strong safety nets. Rather we are told that safety nets will ruin us and that we need a “spur in our hides.”

Of course part of the difference in wealth stems from the lower rate of home ownership in Germany due to greater difficulty in obtaining mortgages and a large stock of rental accommodation. This may be why there is so much grassroots opposition in Germany to lending to the European countries that have been hit particularly hard by the collapse of their housing bubbles.  However when they do buy the majority of homeowners own the freehold of their properties. They are not forced to buy their apartments of average to low quality but steadily decreasing size from a monopoly supplier who retains the freehold. Neither are they forced to buy from government monopolies or cosy Public-Private oligopolies when it comes to the bulk of purchasing decisions. Of course our State managed media and the PAP government relentlessly drums home the message of how fortunate Singaporeans are and how well off they are compared to the citizens of other nations.   I recently saw some propaganda on a PAP support group Facebook page that said, “Just because other people are rich doesn’t mean that you are poor.”

In fact as I have pointed out here, when measured by GDP per hour worked, Singaporeans ranks near the bottom of the leading industrialized nations and well below Ireland, Italy and Spain, three of the Euro Zone economies with the most severe financial problems. (Sadly these international comparisons by the US Bureau of Labor Statistics are ceasing because of the budget cuts forced by the recent US sequestration. This means one of the most important independent comparisons of Singapore’s economic performance will be lost)

Ireland is already one of the major recipients of IMF loans under its recent debt restructuring and bank bailout.  Spain has  received a Euro 100 billion facility from the ECB to restructure its banks. Both Italy and Spain are likely in the not too distant future to require a similar debt restructuring   to the smaller Euro Zone economies such as Portugal, Ireland and Greece.  At this point both countries will probably receive support from the IMF under the new firewall arrangements.  If the Euro Zone crisis worsens, and every indication is that it is far from over, Singapore’s loan commitment is likely to be called upon sooner rather than later. So just like the Germans we are lending to countries whose citizens are much better off than ours.

I cited here the 2009 survey by UBS which showed Singaporeans’ living standards roughly on a par with those of the inhabitants of KL and lagging behind Hong Kong, Tokyo, Seoul and Taipei. The 2011 report (Singapore was mysteriously dropped from the 2012 survey) showed Singaporeans’ real hourly net pay at 40.7 with New York at 100. Dublin was on 101.7, Madrid on 75.6, Milan on 75.3, Lisbon on 65.1, Barcelona on 71.6, Rome on 53.6, Athens on 59.9 and Nicosia (the capital of Cyprus to which the IMF recently lent Euros 1 billion as part of the banks’ rescue package) 93.7.

It is not even clear if net comparisons are appropriate. Though Singapore performs better on comparisons of net pay because of our lower taxes the inhabitants of these European countries receive an incomparably more generous package of welfare benefits from their governments in return for the higher taxes. Medical treatment is largely free in most of these countries and they also have old age pensions and income supports that Singaporeans can only dream of.

Of course the PAP government wants to play the role of generous benefactor internationally with our money.  All authoritarian regimes crave recognition and respectability. It helps to mute criticism from foreign governments. Libya, or Gadhafi’s son, was a generous benefactor to UK universities.  Our scholars are an important source of income for Cambridge University and other elite institutions. It additionally allows them to maintain the fiction of good economic governance.  The IMF is all too happy to oblige.

The PAP could be likened to Robin Hood but in reverse since the rule seems to be give to the rich and keep Singaporeans in austerity.  In fact when will Singaporeans wake up and realise that they live in conditions of austerity, self-imposed and completely unnecessary?

Grace Fu recently strengthened the reverse Robin Hood philosophy by condescendingly saying that the government will shoulder a greater proportion of healthcare bills but that the need for co-payment would remain in case Singaporeans were tempted into “overconsumption” of healthcare (see here).

While there should probably be some need for co-payment I believe this should be capped and reduced for those on low incomes. It is hypocritical of our government to be telling our citizens they won’t be allowed to  ‘over consume’ on healthcare while contributing to supporting countries with generous welfare states where health care is not limited.

In my next post I will be showing how our government plays Robin Hood in reverse domestically. In my rebuttal of Stiglitz, I already touched on the inequity of our tax system. I will add to this with details of our government’s policies on foreign labour and the effects of its monopoly over much of the domestic economy that keeps prices needlessly high.  Until then please try not to give too much money away to the already wealthy.

Kenneth Jeyaretnam
* As a blogger, KJ hopes to help imagine a model for a New Asian Nation to bring about a free and fair future for Singapore. KJ is a Cambridge trained economist who could be broadly described as from the Keynesian school. He is also a successful ex-hedge fund manager and a liberal opposition politician who contested in the 2011 General Election with his party. He is currently the Secretary-General of The Reform Party. He blogs at http://sonofadud.com.

Below is just a few highlights of a few regular Q&A sessions taking place on Tan Kin Lian's Facebook page.

Kelvin FX asked:Hi Mr Tan, why do you think Gov refuse to give NSFs higher pay?REPLYThe reasons are:1. NSF and their parents have no courage to protest. 2. They believe in the propaganda that NS is needed to keep the cost low. This is the same concept as getting slaves to work for free. 3. Parent with children that have completed NS or have only girls do not want to support the move to pay more to NSF. This is the selfish attitude that is typical of the Singapore character.

Mohamad Hafiz asked:Sir, why is nsf in scdf and spf not given as much recognition as saf? How can this be changed?REPLYBecause the Government believes in discriminating its own people, sometimes quite unfairly. They call it "differentiating".

Aisha Begam asked:Hi sir. Teenagers these days love to spend money on wants rather than needs. Do you have any ways to save money.REPLYThey should attend my talk on financial planning (www.fisca.sg/events) and learn about the purpose of savings. When they have a meaningful purpose, they will pursue it.

Jerry Low asked:Mr TKL what if one day, a global cataclysm hits and combined with failing US and EU economy that hits the world. All money and stocks turn worthless and ppl turned to barter trading. What would you do?REPLYI will be a farmer. Is this a good idea?

Someone asked:Hi Mr Tan, what is your view about policy encouraging the idea of selling one's home to get cash for retirement? I found this to be a sad scenario, when in one's old age one has to sell one's home and rent a place to live. Renting commercially is prohibitive. I know some people had to do this to survive!REPLYThis option should be considered with an open mind. Some people spent too much on buying their home or upgrading at a late age, and did not have enough savings for retirement. 
With too much savings locked into their home, it is sensible to sell their home and buy a smaller home, or rent a place. Although rental is high, it follow the high value of the property. The proceeds from the sale of the property should be enough to pay rental and also to provide a retirement income.
It is important to invest the savings wisely. The best choice is to invest in an index fund, and avoid the unregulated or bad financial products.*Tan Kin Lian is a Singaporean businessman and social activist, and former Chief Executive Officer (CEO) of NTUC Income. Since stepping down as CEO in April 2007, his activities have included organising public rallies for people who lost their money due to investing in Lehman Brothers'Minibond products to seek redress. Tan stood in the 2011 Presidential Election and finished in fourth place out of four candidates with 4.91% of votes.For more interesting Q&A please visit Tan Kin Lian's FB page here.

SINGAPORE: Acting Manpower Minister Tan Chuan-Jin said his officers had acted professionally in dealing with the petition raised by SMRT bus drivers from China in 2010, and with the illegal strike last November.

Source: Channel News Asia

KUALA LUMPUR: Najib Tun Razak said today the support he has received from the people has heartened and encouraged him in the knowledge that the government has done a lot for the Chinese community over the last few years.

“I believe this is especially true on education, where we will continue a RM100 million yearly allocation for the maintenance and upgrading of Chinese schools.

“Normally, having a meal with 60 people would be considered a large dinner. Last night in Westport, Klang, I had the honour of sharing dinner with 60,000 people,” the prime minister said in his Facebook posting.

He also said that bilateral ties with China had never been stronger.

The government had recognised several universities in China and Xiamen University had opened its first overseas campus in the country, he added.

Najib said the Mandarin equivalent of “country” was “Guo Jia” and if those two characters were separated, “Guo” stood for defence and ‘Jia’ stood for “family”.

“Those are the words which BN take to heart as they vow to continue defending the 1Malaysia family, a family made up of a multitude of races and religions, all existing in harmony with each other.

“I ask that you continue to support us, so that we can continue the work we’ve started for the good of the community, and the nation,” he said.

-Bernama

*Article first appeared on http://www.freemalaysiatoday.com/category/nation/2013/04/21/najib-asks-c...

Netizens are targeting international artistes with criticism performing in two star-studded pro-establishment events last night.Among them are Ipoh-born international actress Michelle Yeoh (far right, in white) who had attended a meet-the-people session with Prime Minister Najib Abdul Razak in Port Klang, and the Hong Kong cantopop singer Alan Tam who had made an appearance at the 1Malaysia Charity Dinner in Penang.

At a mega-dinner in Klang yesterday, Yeoh praised Najib’s leadership and urged the public to continue to support him.

For this, netizens criticised her for only pretending to “fight oppressive governments” while playing as Nobel Peace Prize winner Aung San Suu Kyi in the film The Lady, but “fights the suffering people” when off camera.Singer wants clean pollsMeanwhile, Malaysian-born and China-based singer Eric Moo was branded a “traitor” by netizens after previously saying that he would return to Malaysia to perform at the charity dinner in Penang, but would not be returning to vote.

However, after ending his performance last night, he openly expressed hope that Malaysia would always have fair elections, which would in turn put in power a government that would serve peoples of all race and religions.

As for Tam, he explained on Facebook that he did not have a full understanding of the 1Malaysia Charity Dinner beforehand, and an agreement has already been signed. However, he pledged that his group will take the episode as a lesson.

“In the past few days, everyone has communicated their analysis, their thoughts, their advice, their understanding, and even their anger to us; we are aware of this and thank you for this valuable lesson.

“I don’t blame my colleagues, they are just doing their jobs. I will pass on your opinions to my colleagues, bring them on a study trip to Penang, and let them learn from the experience,” he said.Drop out, earn praiseMeanwhile, Hong Kong artiste Gigi Leung and Taiwanese band Mayday earned praises from netizens when they cancelled their appearance at the charity dinner.

Leung’s Facebook posting saying that she had to cancel the performance due to ‘personal reasons’ had over 20,000 ‘Likes’ and almost 6,000 comments, while Mayday fans on Facebook invited the group to perform in Malaysia after a regime change.

As election campaigning heats up, artistes often come under fire for appearing at political functions, especially that of the ruling party.

In turn, the Malaysian Association of Chinese Artistes had clarified that their work is only meant to entertain, and should not be misconstrued as canvassing for votes for any party.

Nevertheless, a group of 438 artistes have launched a campaign on April 19 to urge Malaysians abroad to return to vote and help maintain a two-party system.*Article first appeared on http://www.malaysiakini.com/news/227586

Ensuring that children have a sound grasp of English and the mother-tongue language will remain the focus of the Education Ministry for now, said Education Minister Heng Swee Keat yesterday.

Learning dialects, he added, is something for people to consider later, when the foundation for those two languages has been built. He was speaking to reporters after a Mandarin dialogue organised by Lianhe Zaobao at Singapore Press Holdings' News Centre.

The two-hour session was attended by more than 30 students, parents, teachers and other working professionals.

Mr Heng noted that the loss of dialect is a problem felt even by residents in big cities such as Shanghai. But he explained that he did not wish to further burden children here with additional subjects.

He noted: "I don't think you want a system where we get our kids to start learning in an even- more-complicated language environment. As it is, our language environment is already very complex."

He said this is where life-long learning plays a part. As people get older, a strong foundation in the two languages will allow them to get into learning dialects if they wish, he said.

Mr Heng said: "You don't have to start learning these during primary school."

During the dialogue, many raised concerns about Singapore's "rojak language", in which many are not proficient in either English or their mother-tongue language.

Others said that the education system has too narrow a focus on grades, which nurtures a fear of failure.

Mr Heng said he agrees that the education system is too academic-centric, pointing out that parents these days want their kids to learn too many things.

There are many competing demands, but only 24 hours in a day, he said, adding that the challenge is in finding a balance.

He said: "We can't predict how the world will change in 20 to 30 years. What should we learn and focus on? How do we make use of that time?

"If we focus on the content, we also sacrifice on time and space for reflection and critical thinking...The good gets in the way of the better."

He also addressed concerns raised that Singapore is too focused on economic growth. He said while a country's well-being should not just be about economic numbers, the reality is that the world is becoming increasingly competitive, especially with China's rapid growth.

He said: "Economic growth is something that is important for our future. Without resources it is hard (for Singapore) to do a lot of things."

Mr Heng also weighed in on Deputy Prime Minister Tharman Shanmugaratnam's answers to questions chosen by readers in an online poll conducted by The Straits Times' Singapolitics website last week.

Mr Tharman had said there was a need for a broader and continuous meritocracy, where different strengths and individuals are recognised, and people should not be defined by just their results in their school years.

Mr Heng said: "Our life journey is a fairly long one with different stages. We need to be prepared to recognise people for their intrinsic worth and to help everyone to achieve his or her best."

Source: 

I am amused and intrigued by people who have no understanding of the implications of their own arguments or do not carefully read what I have written.  In his “rebuttal of a rebuttal”, Mrs. Snook further attempts to convince myself and others about the correctness of her position that Temasek undervalued assets when it received them from the Singapore government therefore allowing Temasek to earn 17%.  Let us take a minute and explore his position and its importance.

Let me begin by clearly stating: the analysis of Temasek receiving undervalued assets to boost their claimed returns is entirely true.  Read my previous rebuttal (and related posts about Temasek accounting here and here) on the matter and you will clearly see that I never disagree with her or rebut her facts.  (Expecting her to respond as she did, I was kind of saving this part in reserve.  My apologies if that means I played a little dirty).  Theonly thing that I do is warn her about the implications of what her argument means.  Now let’s explore the facts and additional implications of what Temasek receiving undervalued assets means.

A basic argument is made about the original legacy holdings of Temasek with a simple illustration.  If the owner of a $1 million in financial assets transfers them to a holding company that they own at a nominal value of $100, nothing has changed.  The original owner of the assets, owns them, which owns the assets so there has been no change in the wealth of the owner.  The same argument is made about Temasek companies transferred from the government.  As is written “it was just an administrative exercise with no implications for the tax payer or citizen….I now own a company which owns $1 million in shares.  I have lost nothing.  I am still a freaking millionaire.”  As elegantly freaking stated as that is, let’s examine this claim closer.

First, this poorly constructed analogy overlooks the implications of how returns are claimed.  Let’s assume the owner of $1 million in unlisted financial assets, as the Singapore government was in 1974,  transfers its ownership to a company she owns for a nominal value of $100.  There is no change in wealth.  However, one year later, the owner cannot go out and claim that his company has an annual return of 999,900%!  This would be considered absurd by everyone who knew how that return was calculated.  Yet this isexactly what is claimed.  When Temasek receives assets at a “zero or nominal value” which are worth significantly more and then claims high returns, this is not a true or accurate picture of its actual performance.

Second, the reason I agree so strongly with the theory that Temasek is receiving undervalued assets is that purchasing or receiving undervalued assets is one of the best ways to cover up investment losses.  Let’s take a hypothetical situation.  The owner of the $1 million in unlisted assets transfers it to her new investment company at a nominal value of $100 and convinces her grandmother to give her some money to invest in the stock market.  Let’s assume, hypothetically of course, this new investment mogul guarantees Grandma a return of say 2.5% on her investment of $10,000.  This talented CEO takes this $10,100 into the stock market and let’s assume she buys some bank stock.  Then assume that the bank stock bought by this investment genius declines in value to say $5,000 a loss of 50.5% at which point it is sold.  Rather than going and telling Grandma she lost a lot of money, this talented investment guru revalues the unlisted assets from $100 to $6,010.  The official capital is only $5,000 but after revaluing the unlisted assets, the firm value is $11,010 allowing the new firm to declare a 10% return.  Grandma is impressed and keeps investing with her talented offspring.  This firm with the enormously undervalued assets as a cushion, can endure a lot of investment losses before encountering problems.

The question then becomes has this undervaluation of assets acquired or received by Temasek actually taken place and has the tax payer been hurt by this practice?

Due to the lack of data and their refusal to release the data, we cannot analyze in great detail the value of the assets transferred from the Singapore government at Temasek’s inception.  However, given the number of companies that were transferred, the aggregate value they were transferred at, and their size, it is quite probable they were significantly under valued when transferred to Temasek.  This would be a good start to many years of over stating returns and covering up losses.

Worryingly, this pattern of the Singapore government providing or selling Temasek significantly undervalued assets continues to this day.  There are two recent and obvious examples of how this behavior which is used to pad Temasek returns and harm the tax payer.  First, the Singapore government is paying $1.1 billion SGD to purchase buses for the SMRT.  The problem with this arrangement is that SMRT is a publicly listed, private company owned by Temasek that declared a $120 million SGD annual profit for the year ending March 31, 2012.  The government of Singapore is obviously subsidizing the profits of a Temasek company by transferring public assets to a private company incurring a tax payer loss.  To put this arrangement in perspective, if SMRT had to pay a 10 year bond with annual payment at a 4% interest rate on the $1.1 billion SGD in buses: it would pay $136 million SGD in principal and interest costs making its yearly profit disappear.  Given this information, it seems highly unlikely SMRT would have a $2 billion SGD market capitalization if the Singapore government was not subsidizing Temasek profits by billing the taxpayer for the capital used by a private company.

Second, as was pointed out by Steve Wu, Temasek with the help of a $3.2 billion SGD capital injection from the Singapore Ministry of Finance paid $3.2 SGD billion to acquire Changi airport.  This transaction is notable for a few reasons.  For instance, according to one document from Changi Airport, the government since the late 1970’s has invested approximately $5.68 billion SGD.  This implies that in pure dollar terms, the Singapore taxpayer lost approximately $2.5 billion SGD.  If we however assume, a purely hypothetical return on these airport investments by the government of 5% or 17%, the Singapore tax payer would have had an asset worth $13.3 billion or $202 billion respectively.  If the airport “investment” by the government earned a low yielding 5%, the Singapore taxpayer would have lost $10.1 billion SGD and if it earned the Temasek rate of return an astounding $198.8 billion loss.

Furthermore, by numerous valuation methods, it appears that the Changi Airport was significantly undervalued.  For instance, in its first full year of operation, the Changi Airport group earned $337 million SGD.  That is a 10.5% rate of return an incredible return for an airport.  Its profits ending 2012 was $553 million a 17% cash flow rate of return while the tax payer incurred a $2.5 billion SGD loss.  Temasek obviously received a sweetheart deal in acquiring Changi Airport at the expense of the tax payer.

To briefly recap the implications of receiving assets at “zero or nominal cost”.  First, Singapore tax payers are suffering losses by subsidizing Temasek profits.  Second, Singapore and Temasek are engaging in Mickey Mouse accounting.  Third, Temasek returns are inflated by the “zero or nominal cost” assets it received.  Fourth, Temasek accounting does not consider the cost of capital.

I completely agree that Temasek and its subsidiaries are receiving capital and companies at “zero or nominal cost”.  Unfortunately, this has disastrous and chilling implications for Singapore and Temasek.

Note: I have been compiling a database of sweet heart deals involving Temasek or Temasek linked companies.  Please email me at christopher@baldingsworld.comor on Facebook if you have deals you think should be reviewed.

*Article first appeared on http://www.baldingsworld.com/