THE TEMASEK TIMES

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Archive for October, 2012

High cost of HDB flats a key reason for failure of Baby bonus to boost birth rate

Posted by temasektimes on October 29, 2012

In a Straits Times report, it was reported that the Baby Bonus introduced by the government has failed to boost the flagging birth rate despite the increment last year. (read article here)

$230 million was given out by the Government in baby bonus payments last year, up from $55 million just five years earlier. But there was no corresponding increase in the number of Singaporean babies born.

The Baby Bonus Scheme aims to encourage Singaporean couples to have babies by easing the financial burden on parents.

A reason commonly cited for the unwillingness of Singaporeans to have children is the high cost of living, especially that of housing.

The price of HDB resale flats and that of new flats whose prices are pegged to it have risen dramatically in recent years.

Data from the Housing and Development Board showed the resale price index rising 1.4 per cent from the previous quarter to 140.2 in Q2. This is the highest level seen since 1990.

Over 85% of Singaporeans living in public housing built by the HDB. Though it is meant to affordable to the masses, the relentless price hike have squeezed some Singaporeans out of the market, especially young couples who are first-time genuine home-buyers.

Last month, HDB launched a premium project offering 769 new flats in Punggol. It offers 615 four-roomers and 154 five-room flats in a central location just five minutes from Punggol MRT station.

Four-room flats of 91 to 96 sq m are going for $264,000 to $322,000, while five-roomers of 114 sq m are on sale from $344,000 to $409,000.

The CPF housing grant and the HDB housing loan are two schemes that have helped maintain the affordability. The combined income ceiling of $8,000 a month to be eligible for the schemes has been in place since 1994. Since then, the HDB resale price index has gone up by a staggering 190 per cent.

The CPF Housing Grant Scheme is a housing subsidy provided by the Singapore Government to assist Singapore Citizens to own a HDB flat at a cheaper rate, or we call it a HDB subsidy.

The grant can range from S$30,000 to S$40,000, however there is a catch ( or in fact many catches!), if you had obtained the grant when you purchase your flat, you will be required to pay a resale levey when you sell it. This resale level can be as high as S$50,000 for Executive flat and you need to occupy the flat for 5 years before you could purchase another flat directly from HDB.

Even with a $30,000 housing grant, a young couple buying a new 4-room flat at $250,000 will still have to fork out $220,000 which amounts to a monthly loan of between $800 to $1,200 a month payable over a thirty year period depending on the type of interest scheme.

For a resale HDB flat in a prime area like Bishan, the price ranges from $350,000 to $400,000. The monthly installments will be between $1,100 and $1,400.

The median pay of the average Singapore worker is about $3,440 a month and it has stagnated over the last few years. (source: http://www.worldsalaries.org/singapore.shtml) After the compulsory deduction of 20% to CPF, the take home pay is only $2,750. The Singapore worker will be left between $1,500 and $2,000 after paying for the mortage loan. It will be very tough for one to start a family with such a pay.

Of course the above calculations are just gross estimates and the government should be in a better position to shed more light on the affordability of HDB flats. However, till now, ministers such as Mah Bow Tan and Lim Hwee Hua remain adamant that HDB flats remains “affordable” to the majority of Singaporeans.

It defies common logic for the government to peg HDB flats to that of the private property market which is extremely volatile and inflationary in the last few years with the influx of foreigners buying up properties in Singapore. About 70% of the buyers of private properties are foreigners.

Throughout these years, it is not known if the government has made any “profit” from the construction and sale of HDB flats. What is the price of the land? A significant proportion of the land in Singapore is owned by a government-linked company, Singapore Land Limited. What is the cost of building each HDB unit? What is the difference, (if any), between the construction cost and sale price and where does it go to?

The government has refrained from answering these legitimate questions on the mind of Singaporeans for the past two decades, preferring to congratulate itself for raising the home ownership of Singaporeans to more than 95%.

Though technically, 95% of Singaporeans “own” their HDB flats, they are merely renting it from the government for a maximum period of 99 years since it is a leasehold and not freehold project. Freehold properties usually command a higher price than leasehold ones in the same vicinity by 10 to 20%. The reason why HDB flats are commanding such a high valuation is that shelter over one’s head is a basic necessity. Unlike in Malaysia, Hong Kong, Taiwan or China, where one can pack up and live in the countryside, there is nowhere to go in Singapore.

In other words, prices of HDB flats will continue to climb unless the government step in and modulate its mode of valuation because there is always a ready market for it. The influx of foreigners and PRs have also helped to artificially inflate the price of HDB flats.

Singaporeans may have “double” or even “tripled” the value of their HDB flats in the last ten years, but don’t forget after making a profit from the sale of their properties, they still have to pay for another new flat at a higher price with the unwanted effect of plunging Singaporeans further and further into debt.

According to an AXA study done last year, it is estimated that for the average Singaporean, CPF savings will provide only a quarter of the funds he or she will need in old age which defeats its original purpose of being a retirement fund for Singaporeansn when it was first formulated in 1967.(source: Asiaone)

With no social safety net to speak of, Singaporeans face a grim and uncertain future, especially those from the middle and lower income group. The middle class will be more severely squeezed as they do not qualify for any government subsidies. The “sandwiched” generation – those with children and aged parents to take of, may find life a continuous struggle to earn enough money to keep afloat.

It is not easy to bring up a child. Not only must one ensure he/she is well fed and clothed, time and resources have to be expended to educate them so that they will become well-behaved, productive and useful citizens to the nation. With so many tasks to juggle at the same time, it is no wonder that Singaporeans are opting to have a smaller family, if any at all.

The government should look at and deal with the root cause of the problem rather than giving cash handouts which does little to ameliorate the difficulties faced by Singaporeans trying to start a family. It has been 15 years since the HDB since the HDB housing grant was first introduced. Given the different set of circumstances we are in now, perhaps it is time to re-evaluate the scheme.

For a start, the cost price of new HDB flats should be pegged not at two-thirds of reslae flats in the vicinity, but at the median pay of the Singapore worker, e.g. 5 times for 4-room flats and 6 times for 5-room flats which work to about a price of $170,000 and $204,000 respectively.

With the decrease in the prices of new flats, the resale market will gradually be cooled and fall to more sustainable levels.

The $8,000 ceiling for the grant’s qualification should be increased to $12,000 or more and the housing grant raised to between $50,000 and $70,000.

Though the government may made a “loss” in doing so, it owes the citizens who voted for it a duty of care. Besides, even at much “knocked-down” prices, HDB may still able to make a hefty “profit”.

How much money did the government gain from the sale of HDB flats, the levies earned from resale flats and the CPF contributions of Singaporeans after all these years? Are they used to finance the investments made by Temasek and GIC? Till today, these figures remain enshrouded in a cloak of secrecy.

Boosting the birth rates of Singaporeans will reduce our dependence on foreigners who now made up almost a third of the population. Reducing the pressure on Singaporeans will lead to a happier citizenry and increase our domestic consumption, thereby decreasing on reliance on foreign exports.

A fundamental shift in the government’s mindset and policy is needed to reverse our flagging birth rates. As history has already shown, giving cash handouts in the form of Baby bonus and recruiting foreigners en masse will not solve the root of the problem.

Note: This article was first published in the old Temasek Review in September 2009

 

Posted in Commentary, Opinion | 5 Comments »

Lawrence Wong appeals to Workers Party to join ‘Singapore Conversation’

Posted by temasektimes on October 27, 2012

In an unprecedented move, Senior Minister of State for Education and Information Lawrence Wong made a public appeal to the Workers Party, widely known as the PAP’s ‘B’ team to participate in the government-led ‘Singapore Conversation’.

Workers Party Chairwoman Sylvia Lim had earlier rejected the PAP’s invitation to join in the ‘conversation’, saying these citizen discussions would be “better served” without the presence of its leaders, as they would be linked to the party even if invited in their personal capacity.

Speaking to queries from the state media, Mr Wong said:

“No one has a monopoly of wisdom. Everyone comes in as an individual contributing his view and every view is important. The more we have people participating in this process, the richer are our discussions. I see value in all Singaporeans participating in this process regardless of their political affiliation. This is not a debate in politics, this is a national conversation about the future of Singapore.”

The Workers Party’s refusal to join in the ‘National Conversation’ came as a surprise as its leaders have been trying desperately hard to appease the PAP all along with Sylvia Lim heaping generous praise on the PAP’s management of the economy in an interview with Reuters not too long ago.

Perhaps it is just another ‘wayang’ to play ‘hard to get’. As public opposition against the PAP’s policies continue to rise, the PAP needs its ‘B’ team more and more to masquerade as a ‘credible’ opposition party in order to sideline and marginalize the real opposition parties which can threaten its political hegemony.

In the aftermath of the General Election last year, newly minted WP (or PAP’s ‘B’ team) MP Pritam Singh handed PAP an olive branch:

“If the PAP fails to win a majority in the next election, the Workers Party will form a coalition government with it (to keep it in power)”

Posted in News | 6 Comments »

Man jailed for having sex with underage prostitute after friend ‘passed’ her to him

Posted by temasektimes on October 25, 2012

He did not seek the services of an underage prostitute, but ended up in jail after his friend ‘passed’ her to him.

36 year old Lee Vin Sen has been sentenced to ten weeks jail after pleading guilty to paying the girl S$450 for sex at Marina Bay Sands Hotel on 23 September 2010.

He is the 13th man to be sentenced for having paid sex with an underage girl in a high-profile online vice ring case.

Lee’s friend was the one who contacted the pimp and arranged a session with the girl, but he was unable to pay for her services after losing money at a casino.

He then ‘passed’ the girl to Lee who agreed and proceeded to have sex with the girl, who was 17 years old at that time.

District Judge Chay Yuen Fatt called Lee an “accidental client” and gave him a shorter sentence than the other men who were jailed 12 weeks.

The court also heard that Lee has been “mentally unstable” since he was charged and has been “receiving treatment for the past six months.”

*Illustrated pic

Posted in News | 20 Comments »

Ex-NWC Chief now proposes wage increase guidelines for low income workers

Posted by temasektimes on October 25, 2012

When he was the Chief of the National Wages Council, he was pretty much ‘silent’, but now Lim Chong Yah, the architect of Singapore’s wage system in the 70s, is making a lot of ‘noise’ lately about the plight of Singapore’s low income worker.

Presenting his proposal titled ” Shock Therapy II” at the Singapore Economic Policy forum on Thursday, Professor Lim calls for a continued issuance of quantitative wage increase guideline for low income workers who earn S$1,500 or less a month for the next two years.

He also proposed a compulsory minimum wage scheme of S$1,000 a month as a start-off quantum should the wages of the lowest paid workers remain stubbornly very low in two or three years’ time

His original proposal, six months ago, was to raise the monthly salaries of workers who earn S$1,500 or less by 50 per cent over three years and, at the same time freeze wages of those who earn over S$15,000 a month has come under fire by PAP minister and labor chief Lim Swee Say for oversimplifying the issue, which contains serious “hidden risks” for the Singapore economy such as structural unemployment and higher cost of living.

While Professor Lim’s occasional rants may get media attention, it is nothing but hot air unless he contests in the election and manage to win a seat in parliament to get his views aired.

Due to the government’s ultra-liberal immigration and pro-foreigner economic policies, the income gap between the rich and the poor has widened considerably over the years.

In the Kent Ridge forum conducted two years ago in NUS, Singapore’s Supreme Leader Lee Kuan Yew dismissed concerns about the growing income gap, saying it does not matter so long jobs are being created for Singaporeans (never mind the pay).

Posted in News | 13 Comments »

Malaysian living in Singapore: Why I will never want to retire here

Posted by temasektimes on October 25, 2012

I’m a Malaysian who has been living in Singapore for the past 13 years and I have to say that Alvin is right. I miss the laid-back easy life back home. But I chose to focus on my career and Singapore is the place to do it. If I want a lil Livin’ and some soulful action i just hop across the border. In SG i switch off. In Malaysia i switch on. It has worked well for me and i simply learn to enjoy the best of both worlds.

The thing I love about Singapore is the Safety factor. The thing I hate about Singapore is how they tend to blow things out of proportion esp about the crime rate. The crime rate in malaysia is the same as what you get in Sydney, New York and London. Singaporeans will pay thousands to fly there for holiday but squeal at the thought of driving across to JB. Seriously, if you keep reading Straits Times, then you will have been thoroughly brainswashed by the bullshit newspaper that scares the crap out of you about driving into Malaysia so that you will spend your money in SG and not in MY.

Both countries have their good and bad. However, I will NEVER want to retire in Singapore simply because I wont be able to afford it and I don’t think i want to be surrounded by concrete jungle when I’m in my 60′s and 70′s.

SPLITNIC

*The above was first posted as a comment on The Temasek Times.

Posted in Letters | 56 Comments »

Grace Fu to young Singaporeans: ‘Quality growth’ is important for Singapore

Posted by temasektimes on October 24, 2012

It was supposed to be a ‘conversation’ to get young Singaporeans thinking about the kind of Singapore they want to see in 2050, but ended up with Minister in Prime Minister’s Office Grace Fu dominating the session and imposing her world view on them.

Speaking to some  200 students and staff from tertiary institutions at a dialogue organised by the Institute of Policy Studies on Tuesday, Ms Fu reminded young Singaporeans that the country needs good quality growth for all segments of society to have good jobs and wages.

“You can wish for good things, but the economic conditions need to be right to get the better things in life,” she said.

Despite some concerns from the audience about having too much focus on economic growth at the expense of a better quality of life, Ms Fu reiterated that quality growth remains important for Singapore as it helps sustain social spending.

Though Singapore has one of the world’s highest GDP per capita income, it is plagued by a widening income gap between the rich and the poor who has no social safety net to speak of.

Posted in News | 41 Comments »

Female doctor causes stir by cursing Workers Party politicians on Facebook

Posted by temasektimes on October 23, 2012

A female doctor working in a local hospital caused a stir in cyberspace lately by allegedly cursing Workers Party politicians on Facebook.

In a comment posted on Channel News Asia Facebook, she wrote:

“Hope more trees fall in Hougang and xxx WP politicians who are doing their walkabouts.”

Some comments from Hardwarezone forumers;

“She’s a doctor? If so, really reflects the lack of tact expected of professionals like her.” – kiwi8

“professionals are good in studies, but does not mean all have moral characters.” – scooby

However, some netizens claimed that the Facebook account does not belong to the doctor and somebody has impersonated her.

 

Posted in News | 19 Comments »

PM Lee: NSmen will receive ‘hongbao’ this year in the form of vouchers

Posted by temasektimes on October 23, 2012

National Servicemen (NSmen) will be awarded for their contributions to the nation with a S$100m “hongbao” from the Singapore government to commemorate the 45th anniversary of National Service in the country, proclaimed Prime Minister Lee Hsien Loong.

Speaking at the celebrations at The Float @ the Marina Bay, Prime Minister Lee Hsien Loong said all NSmen will receive vouchers to enjoy a movie or meal with their family and friends.

In addition, Operationally Ready NSmen who are currently serving out their cycles, as well as those who have completed their cycles, will also receive a year’s free membership to SAFRA or HomeTeamNS.

“…the “hongbao” will cost the government S$100 million though the gestures will never fully compensate for their personal sacrifices,” PM Lee said.

All Singaporean born men have to ‘serve’ two years of compulsory National Service followed by 10 or more years of reservist as NSmen which put them at a disadvantage in the labor market as compared to foreigners who do not have such disruptions.

 

Posted in News | 51 Comments »

50 percent of Singaporeans do not use condom at their first sex

Posted by temasektimes on October 22, 2012

One in two Singaporeans do not use condoms when they have their first sexual encounter.

The shocking statistics were revealed by the latest Durex Global sex survey which also found that Singaporean youths who are still studying, are 20 times less likely to use condoms during their first sexual experience as compared to those who have completed their education.

On the contrary, as a global statistic, youths still studying were on average 1.5 times more likely to use a condom at first sex than compared to those who have completed their education.

The average age at which Singaporeans experience their first sex is 22 years old.

More than 500 Singaporeans age 18 and above were involved in the survey.

*Illustrated pic

Posted in News | 12 Comments »

22 year old PRC lady charged with kicking police officer

Posted by temasektimes on October 22, 2012

A 22 year old PRC lady was charged on Monday with kicking a female police officer.

Chen Li Ying is accused of kicking Sergeant Chan Min Ghee in the thigh on October 21 at 2.15am along Pearl’s Hill Terrace.

It is not revealed if she is studying here or working. 

Chen is currently on bail and her case will be mentioned again on November 19.

If found guilty, she faces up to seven years’ jail and a fine.

Posted in News | 23 Comments »

 
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