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Wise words from a former Civil servant
This post is on facebook, and it really brought out the main issues with PAP’s policies. My comments are in red :
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On Social Fabric and Economic growth:
“When Mr Lim Siong Guan was Permanent Secretary for Defense, he came to see me one day to discuss the concept of total defense. We both agreed that total defense would be to embrace economic defense, social defense, psychological defense, and from MINDEF’s point of view, the bedrock of military defense. Having spent most of my career in the economic ministries, I thought that a strong economy is the bedrock of everything else, including miltary defense. We agreed to disagree.
I would just end by paraphrasing Lord Keynes, who said that even the wisest statesmen is often the slave of some defunct philosopher. In plain English, the politician is often misled by the economist. So, for those of us who profess to be professional economists, heavy is our responsibility. In the spirit, I urge my fellow economists in government to accept that sometimes we can grievously wrong.”
In all, it’s simply what I had mentioned in my previous post. Managing a nation does not solely means growing the economy.
On Public Housing:
“MR Howe Yoon Chong, the first CEO of HDB, once said to ministerial colleagues by proposing we close down the HDB as it had then housed some 80 per cent of the people. He thought that we should leave it to the private sector to build for the other 20 per cent.
But old habits, particularly success, die hard, and the HDB was not shut down.
So from providing a first home for a family, we went on to give them a second bite of the cherry by giving a second loan to upgrade from a 3- to a 4- or 5-room flat.
As property prices were rising in the 1980s, there was a good cheer all round. The HDB thought that had an endless queue for new flats and went into overdrive. But the party had to end.
The Asian financial crisis in the mid-1990s led to a sharp and sudden fall in demand, particularly those who were hoping to make money by upgrading. The queue disappeared, and the HDB was left with unsold flats, some 17,000 units. HDB would have gone bankrupt years ago if it had been a private company. But as a statutory board, it was kept afloat by MOF, which paid up the tab.”
MOF helped HDB survived using taxpayers’ money. A senior civil servant also agreed with me that our public housing policy had lost it’s initial mission and became overly complicated. After the Asian Financial Crisis, we noted that Mah Bow Tan stopped building too many flats for fear of oversupply. Then the floodgate for foreigners opened and the suddenly the million dollar paid and self-praised-highly-capable government surprised itself by the spike in housing demand pushing up house prices. To be on the safe side, Mah Bow Tan introduced the BTO system where only committed buyers can justify a building of a new flat. But because the highly intelligent Mah Bow Tan did not understand that there are so many foreigners flooding into the country and he does not understand the simple logic that build-to-order building system takes 4-5 years to build, supply and demand is always off by 4-5 years, creating constant pressure on high prices.
On Land prices:
“Relying on the concept of opportunity cost, the Chief Valuer, at the behest of either the Ministry of National Development or Ministry of Trade and Industry (I am not sure which), has valued land in Singapore using Raffles Place land as the benchmark. The assumption was that every square meter of land in any part of Singapore has the potential of Raffles Place.
I was in the Ministry of Finance and had no inkling of what was happening when the Ministry of Community Development and Sports (MCDS) came running to us to give them a supplementary budget to help voluntary bodies and charity bodies to pay their substantially increased rentals on premises going to the Land Office. Similarly, EDB asked for more funds to help cope the higher cost of MNCs setting up water fabrication plants in Singapore. We kidded ourselves into thinking that we are the only intelligent people in the world and ignored the fact that other countries would offer their land to such companies.
As a result, PSA priced itself out of the market for transhipment. Unwittingly, we gave its Malaysian rival, Tanjong Pelepas, the window of opportunity.
One of the main causes of Singapore’s loss of competitiveness in recent years is our perverse land pricing policy. What did it achieve to send prices of land valuations so high? It was no more than a muddle headed book keeping practice. MOF paid out subsidies to MCDS and EDB, which were returned to MOF as land revenue. In one mistaken manoeuvre, overall land prices shot up and Singapore lost part of its competitiveness.”
Again, this statement agrees with my previous statement that land prices for public good should not be allowed to priced itself upwards due to market forces. And again, this proves that this land pricing policy had contribute to our high rising HDB flat prices.
On GST and handouts:
“We should concentrate on helping the poorest 5 to 10 per cent of the population, instead of handing out a general largesse. Forget about asset enhancement, Singapore shares and utility rebates. You’re dancing to the tune of the gorrilla.
I don’t understand the urgency of raising the GST which increases the tax on the lower income people. Why tax the lowly paid then return to them in an aid package? It demeans him and creates a growing supplicant class who habitually hold out palms. This is not the way to treat people. Despite the fact that we are not a welfare state, we act like one of the most welfarish in the world. You should instead appeal to their sense of pride on reliance.
I think political courage is needed here. And my instinct is the Singaporeans will respect you for that. Even if the PAP’s percentage win dropped from 75 per cent to 55 per cent, it is still worth it for the sake of Singaporeans.”
Let’s face it. The introduction of GST is to create additional tax revenue so that the government can be allowed to keep income and corporate tax low so as to attract foreign investments and ‘foreign talents’. Hong Kong, the closest comparison to Singapore offers a lower tax system and has no GST (as a true democracy, the citizens refusal to endorse HK’s GST plan is heard). Yet, we don’t see the HK administration suffering from fiscal deficit. Where does all that tax revenue goes to anyway? Who really profits from this GST? It’s the government, the rich and (mostly foreign) MNC.
On different voices and education:
“Singapore is like Sparta, where the top students are taken away from their parents as children and educated. Then, from each cohort, they each select their own leadership, ultimately electing their Philosopher King. When I first read Plato’s Republic, I was totally dazzled by the great logic of this organizational model where the best selects the best.
But when I reached the end of the book, it dawned on me that while the starting point was meritocracy, the end result was dictatorship and elitism. Once selected, only God can remove the Philosopher King. If he is a good dictator, then all is fine and good. But if he’s bad, the whole state collapsed. In the end, Sparta, a martial state known for being disciplined and elitism, crumbled.
On the other hand, there was Athens, a city of philosophers known for diversity and different school of thoughts. Most people consider philosophers bloody useless fellows but at least they dare to argue and think. At the end of the day, Athens survived. Sparta is long forgotten. What does this tell us about OB markers?
So SM Lee has to think very hard what legacy he wants to leave for Singapore and the type of society he wants to leave behind. It is to be a Sparta, a martial, well-organized, efficient society but in the end, very brittle; or an Athens, untidy, chaotic and argumentative, but which survived because of its diversity of thinking?
Personally, I believe that Singaporeans are not so “kuai” (Hokkien for docile) to become a Sparta: This is our saving grace. As a young senior citizen, I very much hope that Singapore will survive for a long time, but as an Athens. It is more interesting and worth living and dying for.”
Highlights how dangerous it is for us to have only one ruling party with group think and refusal to listen to the people as elitism crept in. Singaporeans reading this blog, are you sure you want your future descendants to suffer due to narrow-mindedness and conservative thinking?
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Excerpts from the book Mandarin And The Making Of Public Policy, A: Reflections By Ngiam Tong Dow
by Tay, S. C. Simon
About This Book
Ngiam Tong Dow served in the elite Singapore Administrative Service for more than 40 years. His vision, foresight and leadership in economics and finance have helped transform Singapore into a text-book case in development economics. As a senior civil servant and “mandarin”, he has worked closely with the founding political leaders of Singapore including Goh Keng Swee, the late Hon Sui Sen, and served under two Prime Ministers, Lee Kuan Yew and Goh Chok Tong. In this book, he reflects on his experiences and shares personal anecdotes and perceptive insights of the early decades of Singapore. He also boldly questions some of the policies of government and emerging trends in the country to suggest how Singapore must change to survive and thrive in the future.
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My takeaway from this book:
If a book on a senior civil servant SEVEN YEARS ago still resonates and remains relevant today, has Singapore made any real progress (other than economic and population growth)?
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I urge you readers to read up this book, be it buy it or borrow from the local library.
Haven’t felt so nationalistic in a long while
Imagine a time where every where you turn is a Singaporean and speaks with a local accent. Imagine the nationalistic fervor that you once felt when you stood in the national stadium for National Day. I managed to reminisce that feeling when I attended the Workers’ Party rally at Serangoon stadium. For once in a long time, I felt like home.
Nationalism is a dirty word in an open society like Singapore. Somehow, it is linked with the word Protectionism. It insinuate unwillingness to be open to foreign elements. Yet, we see how important cohesiveness is in countries like Japan when the tsunami struck and Korea when it jumped back to an economic power a few years ahead of schedule after the Asian Financial Crisis. Do Singaporeaneans felt less nationalistic nowadays? I must say I do. There is so much resonance when a student in NUS told Goh Chok Tong that he doesn’t know what he is protecting nowadays as an NSmen.
I certainly agree with WP East Coast GRC candidate Eric Tan when he said we, as Singaporeans, are not anti-foreigners by nature. It’s the influx of foreigners that made us anti-foreigners. When I looked around in my office and see that less than 40% are Singaporeans, I felt like a minority back in the United States. Then we see news of how new citizens supported the PAP (reported in chinese newspaper zaobao: http://www.zaobao.com.sg/ge/pages/ge110428s.shtml) showing how much love the ruling oparty has for foreginers. The question we now wish to ask is: Why is the ruling party so much more welcoming of the foreigners, giving them more opportunities than their own citizens? Why is the ruling party making so much efforts to attract and kowtow to foreigners pushing away their own talents?
I looked around my office and think about the foreign classmates and colleagues I had. Are they really considered talents? In my opinion, I don’t think so. Then why are all of them allowed into Singapore? Aren’t we being too open? The PAP has lost it. After going to the rally and experiencing so much resonance with what the WP candidates had said, I conclude that the PAP had lost it.
The the drum rolls–Hougang Rally 2011!
The picture says it all:
WP Hougang Rally 28th April 2011
For more pictures, refer to this link, which shows the pictures of the rally of WP, and some other party (including the MIW of course): http://darrensoh.com/elections/
Such is the massive turnout at the rally of the most successful opposition party in Singapore to date. Turnout was also impressive at other opposition parties’ rally. On the other hand, attendance is pathetic at the rally of the ruling party. What is more important, however, is whether the mass turnout will translate into votes. Support for the opposition is ‘cool’. It’s more interesting to hear what the opposition has to say than listen to the boring incumbents. Everyone loves a dark horse. But ultimately, what matters more is who you would cast your vote to.
There is still a very large part of Singaporeans who are either politically apathetic, or are happy with the way the policies have turn out. Increasing housing prices might be a major issue for this election, but professions such as property agents and well-heeled citizens who are profiting and benefiting from the economy’s rise will no doubt continue their support for the ruling party. The burgeoning Gini coefficient suggest the polarizing of the country as a group of the nation could ride on the economic growth while a rather significant group is being left out in the cold. While there is much hype about this years GE, I am skeptical on whether Singaporeans will push for a change in our political history.
What is clear though, is the ruling party is incapable of rousing feverish support from the people, unlike what it used to be back in the 70s and 80s. Supporters for the opposition camp are generally more outspoken, more passionate and more gunho than the conventionalist and traditionalist. This might be due to the long oppression of an alternative voice yearning to be heard.
The advancement of technology, the explosive growth of the internet, and the birth of new social media is leveling the ground for an equal playing field. The PAP’s control of the old media would only irk the increasingly educated and IT savvy population. Why else would there be so many alternative voices shouting and blasting in the online world? To date, the PAP has prove to be a poor user of social media while the opposition camps have been using social media to their favor. The ruling party should realize that attempts to monopolize information in this era of technology and internet is fruitless and will only render them distrust and distancing from the citizens.
Tomorrow’s Workers’ Party rally at Serangoon will be the one to attend. I will, won’t you?
General Election: Officially kicked off
Today is a very exciting day as news and twitter/ facebook updates on the elections took the country by storm. My office was not spared the excitement as the Singaporeans (well…less than 50% are Singaporeans….) geared for one of the fiercest competed competition in political history.
It is actually quite an interesting video. For a while, I actually felt that the PAP candidates were kind of pathetic. There is no charisma, no anchor message, no sense of sincerity. Then there is the unforgiving boos and jeers from the opposition camp supporters. Goh Chok Tong and Tin Pei Ling must have wished that given a choice, they would leave the stage as soon as possible.
I think the Worker’s Party made a very wise decision to concentrate firepower on the weakest GRC. It is strategic to leave Hougang due to the long support of the citizens staying there and it’s best to take on the ruling party heads on given the unfair gerrymandering PAP did in slicing up the Hougang constituency into smaller pieces, effectively weakening the WP’s core supporters. Such dirty tricks are not welcome, and the ruling party risk their many scheming tricks being used on them in the future.
We have already seen SDP trying to find fault with one PAP nominee for stating in the nomination form as ‘unemployed’ when in actual fact she is still serving her resignation notice period. Of course, given that the government, the civil service, and the nominees for election are the same body, it is of no wonder the PAP gets to craft and control the rules. Should an opposition end in the other side of the coin, I do not hesitate to believe that the PAP would take this opportunity to prevent an opposition to seek nomination for election successfully.
Is this the kind of leadership you want?
The many hats HDB flats need to wear
Our public housing, one of the most unique programs in the world, is being utilized in so many ways, it’s becoming contradictory to it’s many purposes. How does the government explains how a single policy seek to fulfill so many aims? I have been thinking through this messy policy that admittedly is not an easy issue. While I am no housing expert, I would like to offer some (naive it may be) views.
Question 1: The aim of public housing is affordable housing for the mass public. As such, should it be looked upon as an asset?
The problem with treating public housing as an asset is the public part becomes privatized. When the government offers public housing, they are essentially subsidizing apartments for people who can’t afford. In many countries, only the poor lives in public housing that looks like slums. But when you subject public housing to market forces (such as in the resale market), the ‘subsidized’ price will rise to the highest point bearable in the market (if you believe the market is efficient, which seems like it). What you end up with is no longer ‘subsidized pricing’. The public housing essentially behaves like the private housing market. Volatility went up and speculative activities becomes encouraged. Many studies have been done to prove the high correlation between public housing market and private housing market in Singapore. How then does the HDB continues to fulfill it’s aim of offering ‘affordable’ public housing?
Affordable is a relative term. Flats cost more than double what it used to be 20 years ago. With property prices (both resale and new launches) rising much higher than the country’s medium income (of around S$2500), has the term ‘affordable’ deteriorate? Increasing inflation, increasing cost of living and a low medium income exacerbated by a high Gini deficient can only mean one thing: Singaporean’s disposable income is getting lesser, at least according to the medium salary. With lower purchasing power, how can there be an increase in the quality of life?
If the government truly and sincerely wish to offer affordable flats, shouldn’t the more rational approach be selling at cost price without all that speculative market forces so as to keep prices stable? The youtube interview above is misleading in suggesting those people with flats are happy with rising value HDB flats and only those seeking to buy one would be unhappy. It is not between the haves and have-nots. The entire issue is between the speculators — people who seek to profit from housing as an asset class, and those who really need a roof over their head.
Question 2: Should HDB flats be viewed as a retirement tool that can be monetized for retirement?
Singapore has the unique feature of having more than 85% of the population living in public housing because of historical reasons. When the country first gain independence, there is an urgent need to house an otherwise unhygienic and crowded population. The policy then is to create ownership of houses, with the aim of instilling a sense of belonging and feeling invested in the country’s growth. Before you know it, the majority of the population is already living in public housing.
However nice the word ‘ownership’ sounds, we need to bear in mind that we are merely leasing HDB flats from the government, subject to a 99 year lease and HDB regulations. Breaking those HDB laws such as renting out to undesirable people could mean a purchase you spent half your life savings on to be force taken back by the government. Where then is this ‘ownership’?
Most of us, minus speculators does not shift houses frequently, at least within the public housing spectrum (upgraders is another issue altogether). We stay in our flats for a very long time, often building up emotion links and retiring in them. It is more than just a house. It is home. Why then would we want to sell our flats when we got old? I don’t agree that HDB flats can be used as a monetizing tool. There are 2 main reasons:
“Selling a larger flat for a smaller one when one gets old because the children should have grown up and either have the financial ability to sustain the flat and your retirement, or you no longer need that much space” may sounds totally rational. But with the ever smaller family size in Singapore’s demographics, we see a huge financial burden on caretakers. Retiring into a smaller house would also mean a downgrade in life quality.
Secondly, if HDB flats are to be used as a retirement tool, that would mean for every batch of retirees, there would be an exodus of 3-5 room flats for sale, creating downward pressures on bigger flat prices. And since these retirees need somewhere to live, they would need to purchase smaller 1-2 room flats. This in turn creates upward pressures on smaller flat prices. With an aging population, if HDB flats are really monetized for retirement, we end up with a scenario whereby the retirees are selling at a lower price for their bigger flats and buying at a higher price for their smaller flats. The benefit for moving into a smaller flat, while still positive, would be smaller. Moreover, it is a fact that there are not that many 1-2 room flats available at the moment, and we are already starting to see the babyboomers generation retiring. It is also an obvious fact that people are not selling their houses for retirement if they could.
Question 3: Lee Kwan Yew commented that houses are expensive because they are nicer and elegantly built. Are houses actually getting better?
I disagree with this statement. Everyone knows that in the attempt to house more people, flats nowadays are shrinking at an impossible rate. A 3 room flat in the 80s can have the same space area as a 4 room flat today. I see how a typically long and wide kitchen of older flats got sliced into half in flats built in the 90s and then got sliced again into half in new flats in the Sengkang and Ponggol area. Bed rooms are now so small a King size bed can hardly go through the door of the master bedroom. In fact, for my brother’s bedroom, there isn’t even enough space to put in a proper bed. We ended up with a sofa bed instead. How then are these much more expensive new flats ‘nicer and more elegant’? Flats are now so dense and compact there isn’t much greenery and breathing space to speak of. I see that we are marching towards the path of Hong Kong and Tokyo, and I can’t bear to imagine how flats would look like in the future should the population be allowed to increase exponentially further (at last count, Lee Kwan Yew said we need more than 900,000 foreigners not counting S and E pass foreigners. That means adding more than 1 million or 20% of the current population; and already 1/3 of the current population are foreigners.)
Question 4: This is a more draconian statement that not many people, especially non-citizen might like – HDB flats should only be sold to Singaporeans, period.
When you introduce more than 1.5 million foreigners into the country with an increasing number of PRs given out, you are obviously increasing demand for public housing in the resale (and rental) market. Being foreigners, and some rich ones such as expatriates, demand for housing is extremely inelastic as unlike young Singaporeans who can continue to stay with their parents, PRs need a house more urgently and is willing to pay more to secure one.
If HDB flats are subsidized to begin with, why should non-citizens be allowed to benefit from this ‘low-cost’ housing? Higher demand for rental increases rental rate which in turn increases attractiveness in investing in public housing that can be used to generate rental income. Demand for public housing would then rise expectantly, asserting upward pressure on prices from direct demand (need for a house) and indirect demand (want a house as an investment tool).
Mah Bow Tan recently rebutted WP’s Low Thia Kiang’s proposal to sell new flat launches at near cost price, giving the reason that the ‘large supply’ of new flats will cause general housing prices to fall, thereby hurting current flat owners. Going by the same logic, an increasing large group of new citizens and PRs would generate a significant pressure on general housing prices to rise. We have already seen the effects taking place with resale flat prices going into the range of $1 million. All the news published on such high COV only creates higher price expectation, distorting the market equilibrium prices further.
What Singapore lacks, is a private housing market. A market that serves housing priced between a public housing and a private housing such as condominiums. Public housing should only be offered to Singaporeans and the private housing market can be catered to non-Singaporeans. We see an obvious market given the large disparity in price between a HDB flat (~S$3-400,ooo) and a condominium (S$700k-S$2 million) in the heartlands. The recent DBSS scheme seems to act as a component to fill in this gap but is yet to be seen if the resale market for DBSS (since it’s only launched a year ago) would lie towards HDB flat pricing or condominium pricing.
The reason for having this thought is because I think public housing prices should be kept as stable as possible keeping external market forces out of the picture (internal market forces is entirely fine). Foreigners should not be allowed to influence and distort a public housing scheme. This is dangerous because should Singapore’s economy weaken and foreigners start to leave the island for greener pastures, we will experience the entire opposite of today’s increasing housing prices. With such a large foreigner population, the movement of this particular group should not be ignored.
And we all know a deflationary economy is an even nastier evil than an inflationary one.
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I will continue to add on to this rather long post.
Smear Tactics: What’s new?
Vivian Balakrishnan had started a very dirty and despicable smear tactic against SDP’s Vincent Wijeysingha, insinuating his ‘hidden agenda’ as a gay-oriented Singaporean. Since when does sexual orientation has to do with one’s capability and loyalty to the country? Does the PAP wants to imply that all gays and lesbians are non-righteous, only having the ultimate agenda in repelling the age-old Penal Code 377A?
The local media again gives such loop-sided logic articles that any educated personnel would be incensed. However, the sad true is many conservative and older people will be persuaded in PAP’s attempt to demonized their opponents. So much for Goh Chok Tong’s claim to have a ‘clean fight’. The Minister for MCYS, a ministry created to help forward youth’s advancement, only ended up in unnecessary accusations against a group of marginalized individuals.
Sexual orientation has no correlation with capability and heart to serve the public. The most violent and evil characters in history happens to be mostly heterosexual. On the other hand, there are exemplary examples of highly intelligent and capable gays such as the famous John Maynard Keynes, who crafted an entirely new school of thought in Economics. Closer to home, Lee Kwan Yew’s very own grandson Lee Hxxxxxx (I decided it’s best to leave the name censored) happens to be openly gay as a student back in the United States. Does that make him any less capable? As one of the top students, he clutched much sought after jobs with investment banks such as Goldman Sachs. While there are people who might think that his pedigree would have given him some unfair advantage, I do concur about his high intelligence, his eloquence and charismatic personality. Does being gay makes him any less human? What would Vivian Balakrishnan say if ever Lee Kwan Yew’s grandson decided to run for political office?
It is extremely disappointing that the local media and a minister, who was once thought to be a new hero who would stand up to what he believes rather than kow-towing to the old brains, would stoop to such low levels in engaging smearing tactics against their much less resourceful and less powerful opponents. Such campaign are not only downright despicable, it contributes no value to the nation.
This episode shows us the worrying signs of how ingrained it is in the ruling party, total blind compliance and losing touch with the ground. What we see is an ungraceful, ungentlemanly scheming and narrow minded leadership that could very much threaten the nation’s advancement and survival in the future.
Freak result? What freak result?
Source: http://www.channelnewsasia.com/stories/singaporelocalnews/view/1124482/1/.html?cid=dlvr.it
SINGAPORE : Education Minister Ng Eng Hen has warned of a possible freak result if Singaporeans vote the opposition into power in the coming polls.
He said that the opposition must look to form an alternate government, and not just offer alternative voices in Parliament.
Meanwhile, Deputy Prime Minister Wong Kan Seng took issue with the opposition sharing candidates.
They were speaking at the launch of Heights Park in Bishan-Toa Payoh Group Representation Constituency (GRC) on Saturday.
After meeting with residents at the opening of Heights Park, Education Minister Ng told reporters that voters need to ask themselves who will best serve their needs.
He said Singaporeans should only vote for the opposition if they believe the opposition can run the country better than the People’s Action Party (PAP).
Dr Ng said: “Every election, it is never about just alternative voices in Parliament, because your vote is very powerful and for every General Election you are deciding on who runs the country. If it is just for alternative voices, the NCMP scheme allows for that, you can raise anything you want in Parliament.
“But as the opposition parties have clarified, that is not their intent. In fact, they want to – Workers’ Party have said they want to block constitutional amendments, they want enough seats in the house not just to provide alternative voices, but really their goal is to form an alternative government – to become the government.”
One of the points in the Singapore People’s Party manifesto is that the government must be held accountable for any security lapses. To this, Mr Wong said he had already dealt with this issue in Parliament.
He said: “I spent one hour detailing what the Committee of Inquiry found, and spent the next two hours answering questions from all the MPs – those who were interested in asking questions. Mr Chiam (See Tong) stood up and asked me a question, and he asked whether the police considered using tracker dogs to track down Mas Selamat.
“That is his only question for me in Parliament, where I spent two hours answering questions. So I made a full public account of it. So if he now says that is not enough, why didn’t he stand up then and ask more questions.”
Asked to respond on Mr Chiam’s comment that sharing of candidates shows opposition unity, Mr Wong disagreed.
He said: “So it means that all the opposition parties have the same philosophy, same principle, same values? By his comments, from what you just read to me, that must be the meaning of it. Well, if that is the case, why so many different parties, why not have one?”
– CNA/ms
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The PAP has started their ‘threatening campaign’ as part of every general election. Here, we see another report, that had demonized what would happened should the PAP lose to the opposition. Why would a lost for PAP be a ‘freak result’? Should the PAP always win? What is freaky is if a government is always in power. No government ever rule forever. The election results is a mandate, the will of the Singapore citizens. It is not an election which the ruling party can manipulate and dictate that what the results of the election should be. Is this not yet another sign of low confidence within the party and the loss of touch with the ground?
Housing Policy: Should Land Cost be included for Public Housing?
Mah Bow Tan said that the government subsidized $1 billion for public housing and another $1 billion for estate enhancement every year. While he knows where this astronomical figure came from, he is reluctant to reveal the cost price of each HDB flat. Why would the minister be reluctant to reveal the cost? The only reason I can think of is because there will be a backlash if the citizens knew that the government is actually making profits off ‘subsidized public housing’. According to the HDB financial statements, proceeds exceed cost resulting in net profit to the government. Going by Mr Mah’s argument, the only reason the government is subsidizing the flats is due to the inclusion of land price. He argued that land is part of the national reserve and it is only right that the government pays back the value of the land price to the reserve when the land is scheduled for the building of public housing. The question we should ask is, how did the government finance this purchase of land? And should not public housing be non-profitable? And finally, should land cost be considered part of the national reserve?
If the government finance this purchase of land through the use of reserve, then Worker’s Party’s Low Thia Kiang’s argument would be correct. Use money from the reserve to purchase land (which is a reserve), take off land as an asset in the reserve, and then put back the money financed from the reserves back into the reserves. Yes, it’s a merry-go-round of taking money from pocket A and putting it back to pocket A. The land used to built flats essentially still belongs to the government as all HDB flats are technically only leased from the government for 99 years. In accounting terms, it’s akin to taking the land off the reserve balance sheet, replacing an asset class (land) with another asset class (cash). The reserve balance sheet remains unchanged but the land magically becomes a new positive asset to be used in building HDB flats. And that new asset is counted as a cost to citizens for public housing. Does that makes any sense?
If the government finance this purchase of land through taxes, it’ll essentially be a raid on citizens. How would you feel if someone forces you to pay him a portion of your pay, then he uses that part of your pay to finance a house, and then sell it to you at increased margin? Using tax-payers money to purchase land to be used for building HDB flats, which is in turn sold back to tax-payers is akin to double taxation. Let me illustrate with an easier example.
Suppose country S is a one person 
economy and there is a one person (G) government. The only source of revenue for G is tax. G collects $10 in tax from W. To replace land with cash in the reserve balance sheet, G ‘cash out’ the land valued at $4, and build a house on it at cost price of $6. G then sell the house to W at $8 earning $2 for HDB, and insist that he had subsidized $2 given that the total cost of house and land is $4 + $6 = $10. From the tax-payer’s point of view, W basically financed his own house’s subsidy, and end up paying more for a house. W paid out $18 in total, $10 in tax, $8 for the house. G collected $10 in tax, minus $6 to build the house, minus $4 for pay for the land, plus $8 received for the house, resulting a total net collection of $8. G end up paying only $2 with the reserve remain unchange.
Suppose again that now, G decided to sell the house at cost price and ignore land cost as part of reserve. G collected $10 from W, build a house for $6, and sell the house to G at $6. W would have paid $16 in total, $10 in tax, $6 in the house. G would have collected a total net of $10, with $10 as tax revenue, $6 for building the house and $6 for selling the house to W. G now pays $0 instead of the $2 he paid in the earlier illustration. Since land is not considered part of the national reserve, the reserve also remain unchanged but is $4 less than the earlier scenario.
Comparing the 2 examples illustrated, we see that including land cost as the national reserve result in the citizens paying much more and the government having a lower net revenue. Why then, would the government choose to include land price as the national reserve? Comparing the two, we see that the reserve would be higher by $4 if land is considered as part of the reserve.
Technically, with every building and selling of HDB flats, the reserve gets richer with cash. Cash increases while land, as an asset, is taken off to another balance sheet. Suppose G decided to take back the house from W, G can buy back from W at the same price of $8 or even give W a little profit by buying back at $10, tear down the house, rebuilt another one, and sell it again to W. The price this time round will be even higher than $10 because HDB needs to make a profit. And land price would have risen again as a new development makes the property and land more attractive. Going through the cycle of selling to W, the reserve will be flushed with more cash and the land in appreciating value, will be taken out of to another balance sheet again. What we see is double inflationary pressures from property value appreciation and land value appreciation.
Is it even meaningful to consider land cost as the national reserve? The national reserve is meant to protect our country in times of adversity such as wars or economic attacks. In times of adversity, are we going to sell our land since it’s a reserve????
This article strikes a cord with me when I surfed Facebook, exemplifying the disconnection between the PAP government and the ground, as well as the loss of national identity. For the actual article, please click here.
A LETTER TO MY FRIENDS ON THE GENERAL ELECTIONS by Tan Joo Hymn
A letter to my friends on the General Elections
by Joo Hymn Tan on Wednesday, 20 April 2011
We don’t talk about politics, but I feel so strongly about these elections, I would like to find out what each of my friends think, and maybe persuade them at least a little! 🙂
Why all the excitement?
Over the last 15 years, I lived in: Tanglin, Newton and Bukit Timah
Each time I checked the electoral rolls, it was the same: Tanjong Pagar
Now, without having moved, I am in Moulmein-Kallang.
My neighbourhood was in three different constituencies in the last three elections:
Holland-Bukit Panjang 2001
Tanjong Pagar 2006
Moulmein-Kallang 2011
Question: Is there really a need to redraw boundaries every election?
I have never voted in all my 40+ years. It was always walkover since GRCs were implemented. In 1991, when it was still al Single Member Constituencies, my constituency was contested, and I was 21 years and 9 months old. However, that year, it was announced the the electoral roll of voters was only updated till July 1990!
Question: Has this ever happened before or since? Why the sudden inefficiencies in government?
PAP in 1950s is not the same as the PAP now
Yes, in the early nation building years, the PAP could have been said to comprise of highly principled, intelligent and dilligent people, like Goh Keng Swee, Rajaratnam, Lee Kuan Yew etc.
The PAP leaders today are completely different individuals (except for LKY), and their capabilities, outlook and values can also be said to be vastly different!
Question: would any of the existing PAP Ministers really be able to handle a crises?
Usual way mistakes are handled
Mistakes made in the last 5 years:
– Mas Selamat’s escape (and subsequent failure of the police and military to search the homes of all his close relatives)
– the floods in Orchard Road, and Bukit Timah immortalised in the dramatic photographs of overturned cars
– the Youth Olympic Games being severely over-budget (and depending on who you speak with, under-publicised oversesas
Policy inadequacies:
– the over-heating of the housing market, where government housing aka HDB flats cost half a million dollars (where government housing is supposedly for the less well-to-do)
– the inadequacy of CPF monies resulting in the elderly being cleaners in hawker centres and fast food restaurants all over Singapore
– the huge and sudden influx of foreign workers, at all levels of employment leading to depressed wages for Singaporeans, and worse, loss of jobs
It’s not about not making mistakes. We are all human, Ministers, civil servants etc not less so. The issue is there is little post-mortem or reflection to ensure that the same mistakes do not happen again. The most important thing is to take collectively responsibility and learn all we can from mistakes to make sure they don’t happen again.
However, the usual focus by the Government is to place blame, remove the offending persons and brush everything under the carpet as quickly as possible. There are few avenues for the public to engage in meaningful dialogue with the Government over important issues.
Question: Did the Cabinet do enough soul seraching and reflection behind closed doors away from public eyes? Were there enough diverse opinions to help them see the issues from all perspectives?
Double standards?
Contrast Mas Selamat’s escape: “It was an honest mistake. Let’s move on”.
With the hoo-ha over James Gomez claiming he had filed his minority certificate when he had not during the 2006 elections. At least 4 days’ worth of campaigning and media headlines were focussed on this minor mistake.
Groundhog day of mistakes
After the first flood, the Minister said that it was a freak accident and would happen only once every 50 years.
Barely a month later, a second flood happened.
A better response would have been to be less defensive and stating that the matter would be looked into to find out the real reasons etc, and acknowledging the public’s concern that overbuilding along Orchard Road (Ion, Somerset 313) may have contributed to poorer water drainage.
An older example:
Remember “Two is Enough” in the 60’s and 70’s?
By mid 80s, it had become, “have 3 or more if you can afford it”.
Around 20 years for a complete reversal of policies.
Round two:
In the early 90’s, the Government limited the number of universities in the Commonwealth where law and medicine degrees would be “recognised” due to oversupply
By 2000, the number of “recognised” universities were increased, and soon after, they were recruting foreign doctors due to short supply.
Around ten years for a u-turn.
Not exactly comparing apples and apples here, but surely some lessons could have been learnt about how an “oversupply” could quickly become an undersupply? And in the second scenario, the reversal came only 10 years after the initial policy.
Yet, there seemed to be no in-depth inquiry into why the initial policies were made and what led to the reversal and what lessons could be learnt to prevent making similar errors in judgment. This unwillingness to take long hard looks at Government policies has really affected the ability to address many issues.
Question: Is the undersupply of HDB flats now another example of this short-sightedness?
Fixated on the same solution whether or not it works
1. Throwing money at the problem when main issue is not money
Since the 80’s, the Government has been encouraging WOMEN to have more babies, with very little success. AWARE has brought up the issue of paternity leave since 1989, but has always been rejected, seemingly right off the bat without serious consideration or research to back it up.
The Government’s preferred solution? Throw money at the problem.
Round One: Baby bonus and tax breaks for women having 2 or more children below 30 years of age
Results not good. Solution? Throw more money at the problem:
Round Two: Baby bonus and tax breaks for all women having 2 or more children
Results still not good. Solution? Throw yet more money at the problem:
Round Three: Baby bonus and tax breaks for all women having children
(Note: Babies must be Singaporean at time of birth, and babies’ mothers must be married to babies’ fathers to enjoy benefits, so single unwed mothers and their babies are discriminated against and disadvantaged even as the Government keeps emphasising that human resources are all we have.)
It has been said time and again by various organisations and individuals that financial matters feature to only a minor degree in the decisions to have children, yet the Government seems “deaf to all criticisms” and suggestions yet again. The more pressing concerns such as work-life balance arrangements, including flexi work, quality of life issues, education stress etc, were all not adequately dealt with.
2. Not throwing money at the problem when the issue is chronic need of money
Contrast this with the issue of the poor who are on Public Assistance. They have to be unable to work, have no assets and little or no family support to be eligible in the first place. Clearly an area where some extra money would be an enormous help.
In the debate to increase it by around 10% to $290, in reply to arguments for larger sums by MP Lily Neo, the Minister replied infamously, “Do you want three meals in a restaurant, food court or hawker centre?”
3. Throwing money at everybody whether or not they need it
Contrast again to the new Grow and Share package (and previous New Singapore Shares etc etc), where each citizen receives at least a few hundred dollars. The top 20% certainly don’t need this handout at all. So why waste money by giving them any money at all? Wouldn’t it have been better to allocate it to the lower income groups?
Question: What kind of persons could blithely vote themselves 8 months’ bonus while quibbling for $100 increase in Public Assistance for the poorest of the poor?
Rich-poor divide reaching alarming levels
There are 100,000 households earning less than $1000 per month. That is households of 4 members (default definition by Government. Could actually have more than 4 family members). And over 800,000 employed persons earn less than $1000 a month. In a country where costs of living are spiralling upwards and even the middle classes are feeling the pinch.
Question: Whatever became of social support and social harmony?
So, what?
So what would more Alternative Parties members in Parliament achieve? At the very least, more debate on issues and and more reflection. Each MP is only allowed 15 minutes max (I think) to speak on an issue. So the more alternative voices, the more points of views can be raised, and more food for thought, not only for the Parliament but the public at large, to generate more informed debate.
Why now?
It’s also important to vote in Alternative Parties members now, because I believe in the tipping point theory of 30%: you need at least 30% of new people to feel the effect of the change. Which probably explains why the 22% women in Parliament have not been able to make their presence felt.
It is also because as Workers Party has said, they are not able to form the government right now. We need to give Alternative Parties time to grow into the political process and mature. Because I believe there will come a time when the Alternative Parties form the majority in Parliament.
To me, it’s not a question of if, but when. At the last elections, 66% voted PAP. I do not think it will take that long for the 16% to erode given all that’s happened, even with the influx of new citizens and the constant redrawing of electoral boundaries. At some point, the balance will tip, and the “unimaginable” will happen. And honestly, I rather that it happened when Lee Kuan Yew is still around. Whatever criticisms has been levelled at him, at least he is capable, and more than anyone currently in government, I trust him to handle a crisis. Most people predict rifts in the PAP after LKY’s demise, so that a swing to Alternative Parties after that is even more likely. Hence, I rather it happen now. (see also http://flaneurose.blogspot.com/2011/03/when-pap-loses-election-it-will-be-time.html for discussion on why it will be sudden and not gradual).
Chasm between rhetoric and reality
There are many many more reasons why I will unhesitatingly vote Alternative Parties, given my experience as a volunteer in AWARE and elsewhere, I saw such a huge chasm between policy/rhetoric and what was actually happening on the ground, and the hypocrisy of it all. And now as a mum of a primary school child, I see how flawed the education system is. I hear horror stories of students being kiasu, nasty and perfectionists from a very young age because of the environment. I fear for the future of our country.
Learning from history so as not to repeat it
Maybe I’m more pessimistic, but with politicians with such a non-reflexive mindset, I am not sure we can make it through many more uncertainties and crises. There are more than enough examples of corporates being taken over or wound up, and historical examples of empires and dynasties falling into decay when their leaders stop listening to the public and insist on doing things their way.
Please do consider my points, and I’d like to hear what you think!
Talk about Young candidates & Destruction of the Social Fabric
And here we have another young female candidate. A contestant from NSP, Ms Nicole Seah is only 24 years old, barely out of university. Sharing almost similar educational background (both from NUS FASS and both from the USP program) as Tin Pei Ling, she will be competing in Marine Parade GRC according to her facebook to go heads on with Ms Tin. Despite her prettier face (Yes, I admit it’s a superficial point. But even looking good is an important factor in politics) I have to be fair in my criticism. She too does not reflect as much credentials as Ms Tin. The only thing working in her favor is she has yet to do much damage (unlike Ms Tin) since she hasn’t really come out to the media. She did managed to gain some points with a well written note on her facebook which carries a logical and straight-forward message, unlike the fluffy pointless note that Tin Pei Ling had wrote. While I can’t critic on Ms Nicole at the moment, at least she shows ability to present a more coherent and persuasive argument.
The ruling party always urge the opposition party to send out their candidates as soon as possible citing that the voters need time to assess the new candidates. While I agree that this is a fair statement, let us not forget that the ruling party controls as and when to call for election. There is asymmetric information and therefore gives the ruling party an unfair advantage. Introducing the candidates earlier allows voters to assess their capability earlier. Along with it comes not only a period of assessment but also a period of attack. The chinese has this saying: To understand the enemy is to our own advantage.
Once an opposition candidate is made known to PAP, the party will, in full rationality, study on the subject and find the weakest link to attack. It therefore only makes much sense for the opposition party to delay introducing their full candidates at the earliest date. In any case, as the ruling party, the PAP has only one strategy, and that is to lead the way in introducing their candidates for the elections.
When Chen Show Mao, a talent in WP came into foray, the only thing the PAP can pick on is his ’30 years away from Singapore’, choosing to ignore the reported fact that he came back to Singapore 4-5 times a year and had served NS despite being a non-naturalized citizen. However, the recent PAP attack on whether Mr Chen understands Singaporean’s aspirations carries a very huge backlash given that the PAP is contesting 2 new citizens. Asking a Singaporean to choose between a Singaporean who have served NS since young and a new citizen who just recently applied for citizenship after the NS-compulsory age of 35 is a no brainer. It is a fact that new citizen is just another term for ‘more permanent PR’ to Singaporeans who are born, bred, and lives in Singapore. 2 basic factors, National service and the ‘Singaporeaness’ differentiate a Singaporean and a new citizen.
National service forms a very unique, very important and very emotional part of all Singaporean males. We gave up 2.5 years of our precious youth and duty bound by law to serve reservists every year until the age of 45-50 years old. Youth that is given up for the nation, youth that can never be bought back no matter how much millions or billions you may have. It is something that connects all Singaporean males no matter what is your background (except maybe those white horses. Mah Bow Tan’s eldest son was the personal assistant to the commander of 1 PDF back in year 2005. Question is why is he the personal assistant to the highest power in the camp? And he drives in his expensive and exotic antique cars every day, in full view of all the NSFs, regulars and NSmen coming in for IPPT. Tell me that is not favoritism in play), something intangible and something that tug at our heart and soul. To put it simply, NS is something that connects Singaporeans.
Even female Singaporeans is connected by this factor. Females at the age of 18 or 19 who have male friends who served NS while they were studying in universities or were working will remember a period of their life when their male counterparts became almost bald, thin, tan and talk about nothing but NS stuff despite complaining so much about the sufferings and how much they hate it. Some females could also remember how they miss their boyfriends when their boyfriends got enlisted and the little precious hours per weekends they can be together a week. Wives will remember how they have to help their (generally pretty untidy and careless) husbands pack their reservist items when their husbands got called up to serve the nation. And lastly, mothers will remember the emotional moment in sending their sons for enlistment into Pulau Tekong and eventually became proud that their sons had grown into fine young men.
Then we talk about the Singaporeaness, the attitude, the behavior, the little things we did when we were young especially for the current young adults. The period when we had playgrounds with imported sand, the period when TCS is known as SBC, the period when our buses are non-air-conditioned, the kiasu-ism we so embrace, and so many other things that Singaporeans commonly share that is hard to put down in words. The link to the past when Singapore is still very Singapore with little foreigners, when people talk in Singlish and all kinds of dialects with the common accent. The connection then made us feel proud as Singaporeans. These are all quirky little stuff that may seem insignificant but when a Singaporean talks to another Singaporean, these are the things that connects. This connection is something new citizens can never see, learn and possess.
That is not to say that I am advocating anti-foreigners. I welcome foreigners as I believe in diversity and attracting talents. But I am against it when the influx starts to alters the social fabric of Singapore. Moreoever, experiences in the work place made me skeptical about whether all these foreigner talents are indeed talented. While some are definitely capable, I have seen a far larger share of incapable ‘talents’ that made you wonder why couldn’t other Singaporeans do this job (made worse when you happen to know some Singaporean that was not offered the same job). The top students in our local universities are usually Singaporeans, with a fair share of ‘scholars’ (such as those on Asean scholarship etc) from Malaysia, Indonesia, China and India not getting exceptional results that scholars are expected to deliver. That makes Singaporean undergraduates wonder why these ‘scholars’ deserve to be given a scholarship that could be given to Singaporeans instead. The question we should ask is whether we are really getting the talents we are asking for or are we simply admitting self-professed-talents with a blind eye? How did the government agencies determine who is or not a talent?
Nowadays, everywhere you go in this tiny little island, you see faces you are unfamiliar with when you are young, you see a fashion different from yours, you see a cultural behavior different from yours, you hear different accented languages any where and every where. The explosion in the influx exacerbated the problem as all these differences became magnified in all directions. I dare say the national identity, the Singaporeaness has weakened significantly over the past 10 years. And it is a very dangerous thing because once the cohesion is broken, it is very hard to rebuilt that patriotism a citizen has towards his or her own country.
We have seen how a strong national identity allowed the Japanese to be considerate towards one another, to continue social order despite the horrible earthquake and tsumani disaster and come together to make things better. We have seen how a strong national identity allowed the Koreans to bounce back from the Asian Financial Crisis and emerge as an even stronger economy. Our open door policy had brought in economic growth at the expense of destroying the national identity Singaporeans shared without organic growth. The question we should ask is, is it worth it?
Taking a leaf from the Japanese experience, should Singapore encounter a disaster like Japan, foreign MNCs, foreign talents and foreign workers will not hesitate to leave the country. It makes logical sense when they have an alternative to escape to, and we should expect them to do so. If I am to be in Japan when the quake happens, I too will leave Japan and fly back to my safer country. We Singaporeans have no where to go except this small rock that only has an area of almost 700 km square.
To Singaporeans who are reading this blog, are you feeling as Singaporean as you are when you are younger? To new citizens who are reading this blog, can you say, swear to God, that you can understand the Singaporeaness (which is more than just kiasu-ism) I am talking about?
Scrutinizing the Singapore government 