Tuesday, January 30, 2007

Living your Singaporean Dream.....

"They are going to tear down all these old HDB flats to build Elite Towers...."
- From the movie Singapore Dreaming....
I was sent for an assignment to a country without Internet access and couldn't update my blog for a week. I came back yesterday ....on the flight managed to catch this movie called Singapore Dreaming. It is directed the famous plastic surgeon Woffles Wu and the story written by Colin Goh (of talkingcock.com):

Being overseas for a week gave me plenty of time to dream about Singapore. I and a bunch of other Singaporeans were showing withdrawal symptoms from the lack of Straits Times but Singapore Airlines only had enough copies of this highly treasured reading material for the people in first class, I had to settle for less worthy alternatives such as Herald Tribune & The Wall Street Journal. Thank goodness my mom preserve the whole week worth. I went through the whole pile and after assimilating the good news about the IR, GDP and virtues of GST increases, my faith in our elite leaders was renewed and rejuvenated. I really wonder how I ever survive one week in a country without the benefit of PAP leadership.......?
I've been giving alot of thought about the Singaporean Dream, I think there are actually 2 versions of the dream :
Ordinary Singaporean : Dreams of affordable medical care driven by fears that "better die than to get sick in Singapore".
Elite Leaders : Dreams of a medical hub that charges premium for medical services and attracting the rich people from the region.
Ordinary Singaporean: Dreams of having a good stable job until retirement.
Elite Leaders: Dreams of a workforce that is willing to work until age 80 a low wage so they give our corporations record profits and cost the govt nothing because they never retire.
Ordinary Singaporean: Dreams of equal opportunities for their children in life.
Elite Leaders : Dreams of grooming their children to form the next generation of elites.
Ordinary Singaporeans: Dreams of a comfortable life for themselves and their families.
Elite Leaders: Dreams of a globalised city with an increasingly competitive workforce to achieve the highest level of profits for our GLCs and TLCs.
Singaporeans are lucky to have leaders who are visionaries whose dreams power this nation ahead a path of neverending progress. Without such visionaries as leaders we will be lost and hapless as a people.

Wednesday, January 24, 2007

Another Singapore Charity Scandal!

There seems to be many parallels between the latest Youth Challenge scandal and NKF. Wonder how they end up with the same wrong ideas:

1. High Salaries. The CEOs of these charities who are suppose to serve the public seem to think it is alright to pay themselves hundreds of thousands of $ per year. The Youth Challenge CEO was paid a total of $243K last year and Durai $600K. There is this widespread belief that high pay = high performance in Singapore, maybe these charity heads just wanted to improve their own performance by paying themselves more.
2. No Check & Balance. Once in power these charity heads got rid of all check and balance in their organisations so they have free rein without anyone opposing them.
3. Milking the people they were suppose to serve. Durai seems to have no qualms about exploiting the kidney patients using them to extract sympathy from the public...charging them higher than necessary fees etc.

These charities operated for years without problems being detected.......in fact they regularly won alot praise for their activities.

Youth Challenge found lacking in transparency, corporate governance

January 2007 1626 hrs

SINGAPORE : Local charity Youth Challenge has been found to have many irregularities and lacking in governance, management and financial controls. The Commissioner of Charities, which comes under the Ministry of Community Development, Youth and Sports, revealed this after completing an inquiry on the organisation, following a complaint last year. The probe on Youth Challenge started in August last year after some students blew the whistle on its practices. The COC investigation revealed the organisation lacked transparency and had been giving
misleading information on the remuneration of its Executive President Vincent Lam.
The key findings - Lam's total annual remuneration of $248,867 which ended last year, was more than half of total donations and other income earned by the charity. The COC said Lam was paid various benefits and allowances, well above civil service and charity sector norms. No system of annual performance evaluation was in place. Youth Challenge also allowed blank cheques to be pre-signed by signatories. Also of grave concern was the fact that Lam was able to transact electronic payments, including his salary, without a second level of approval. Lam has resigned from his post on Monday. And now, operations at the Youth Challenge are continuing as normal. But in a statement, the Youth Challenge President Looi Teck Kheong said all humanitarian programmes will proceed as planned. The new management committee, which has been running the charity since October last year, notes that the inquiry results reveal no misappropriation of public funds. It says it values the COC's inputs and will implement the necessary changes and recommendations.
The COC has given the committee six months to rectify breaches and weaknesses in the governance and management of the charity. In reply to queries from Channel NewsAsia, the Inland Revenue Authority of Singapore says it will review the past income tax declarations of Vincent Lam after it receives details of his income, benefits and allowances from the COC. If Lam had under-declared or filed an incorrect tax return, appropriate action will be taken against him under the Income Tax Act. If convicted, he faces a penalty of up to twice the amount of tax undercharged, a fine or jail term. - CNA /ls

Monday, January 22, 2007

Singapore featured in NEWSWEEK!!!

"Due to globalisation, it is no longer enough for govts to tell the people to accept low wages because their lives may improve later as this simply may not happen......"
- Sylvia Lim maiden parliamentary speech.
The PAP's grand achievements have come to the notice of the people in Newsweek. They have a full feature this week about Singapore's wonderful economy, an economy that has won so many praises on my blog and earned so many comments from blog readers. So many Western countries are now envious of our 7.7% growth, yes the PAP has once again proven itself an effective govt deserving of its million $ minister's pay and the constant cheerleading in our official media.....everything is getting better for you and nobody is fedup with progress.....
Our MM Lee has just said there will be a minimum 1% cut in corporate tax this translate to a $500-$600M cut, that is about the size of 2% GST hike....somehow it is just coincidence because as I understand it, the GST hike is meant to help the poor.
Here's the article for your reading pleasure.....
Singapore Swing
The island's economy is booming. So why are so many citizens worse off than they were 10 years ago?

By Sonia Kolesnikov-Jessop
Newsweek International

Jan. 29, 2007 issue - Tiny Singapore, with its population of 4.3 million, is often lauded for the way it has embraced globalization to maximum advantage. In the last decade, the city-state has opened its doors wide to foreign investment and talent, slashed corporate taxes, offered incentives to nurture strategic industries (such as biotech, pharmaceuticals and financial services) and cut free-trade deals with a host of other countries. The payoff has seemed clear: over the past three years, Singapore's economy has averaged 7.6 percent growth—a staggering pace for an industrialized state—and created new jobs at a rate any European government would envy.
There's only one problem: average citizens have yet to reap the benefits. New statistics reveal that middle-class households have tasted none of Singapore's spectacular growth, and that the island's poorest 30 percent are worse off than they were five years ago. "Although we have seen very strong growth, we're experiencing this new phenomenon of median real-wage stagnation and low-income decline," says Yeoh Lam Keong, vice president of the Economic Society of Singapore.
This predicament is hardly unique. Wages and salaries are stagnating across the industrial world. What's surprising is that even a country famous for its smart and transparent leadership has been unable to prevent the gains of globalization from flowing mostly to rich individuals and multinational corporations. In its bid to adapt Singapore's economy to international competition, the government has tried hard to reduce business costs. This has meant slashing labor prices, which has helped push wages down. According to official figures, over the past five years Singapore's wealthiest 10 percent have seen their income rise by 2.3 percent annually (and that doesn't include nonwage earnings such as capital gains or dividends). At the same time, the poorest 10 percent have suffered a staggering 4.3 percent drop in their salaries each year. The government has also allowed employers to cut their contributions to Singapore's Central Provident Fund, which pays for pensions, public housing, medical expenses and education
There's only one problem: average citizens have yet to reap the benefits. New statistics reveal that middle-class households have tasted none of Singapore's spectacular growth, and that the island's poorest 30 percent are worse off than they were five years ago. "Although we have seen very strong growth, we're experiencing this new phenomenon of median real-wage stagnation and low-income decline," says Yeoh Lam Keong, vice president of the Economic Society of Singapore.
Together, these factors have led to lower-than-expected private consumption, which has risen by just 3 percent in the past two years. "Private consumer spending has been the weak link in this current expansion," says Chua Hak Bin, an economist at Citigroup Global Markets in Singapore. This has, in turn, stung Singapore's large retail sector. "It is evident that [they] are not the big winners from high growth," says Manu Bhaskaran, a director of the U.S.-based Centennial Group.
Foreign competition is also hurting. Contractor Tan Boon Soo is one of many Singaporeans feeling the pinch. He installs windows for a living but laments "cutthroat competition" from contract laborers, who have flooded the island from places such as Indonesia and Bangladesh. Unskilled workers like street sweepers and security guards are also finding themselves undercut by immigrants willing to work for less. This is forcing native Singaporeans to change occupations or work harder for less money. "They talk about growth, but I don't see it," says Tan. "Maybe the bankers are doing well, but construction has not been. I'm worse off now than I was in 1997."

All this could spell big trouble. "If these trends continue unchecked," warns Yeoh, "we could begin to get the formation of an underclass [and] the makings of social instability." Such an underclass was never part of Singapore's grand plan. Now its leaders must figure out how to prevent one from emerging without relying on the kind of welfare programs they often deride. Last year the government launched an experimental workfare program that gave low-wage earners bonus pay of up to $780. Now Prime Minister Lee Hsien Loong's government is con- sidering making the program permanent in an effort to thin the ranks of the working poor.
"We will try out different forms, but the principle will be the same—help yourself [and] we will help you," the prime minister told lawmakers last November. "It's essential for us to tilt the balance in favor of lower-income Singaporeans because globalization is going to strain our social compact."

Lee has already announced that he'll make Singapore's rich-poor divide a major focus of his annual budget speech next month.
If knowing is half the battle, it could be an important first step.

Saturday, January 20, 2007

How to build a dual economy....

Singapore announced 7.7% economic growth for 2006. Many of us are surprised not because the growth is so high but because it was hardly felt by the average Singaporean. In 2006, Singapore had the highest per capita growth in the number of millionaires and someone said we probably have the highest per capita deaths in MRT stations. One country, 2 realities.

This is what happens when our determined leaders measure themselves on a single KPI (Key Performance Indicator) known as the GDP. You can see their sense of achievement when they announced last year's GDP growth and following that well deserved rewards/bonus to the civil servants. A growing GDP doesn't mean everyone gets more because there is no guarantee that it will be equally distributed, the PAP did not concern themselves with the distribution problem - they reduced retrenchment benefits to a minimum, imported hundreds of thousands of foreign labor to depress wages, cut taxes for high income earners and raise GST for everyone.

Over the years, policies have been formulated to keep this single number GDP growing. As our demographics became unfavorable, they had this ingenious idea to import foreign workers for this economy- more input to the economy = higher growth. Unlike many countries who faced the same problem and preferred to suffer slowdowns than to import foreign labor, Singapore averted a slowdown by importing 800,000 foreign workers and converting a large number of them to new citizens. One problem with this strategy is saturation....the new citizens will also grow old and you need to import even more people to this little island to keep your demographics favorable. I guess faced with this, the PAP decided that building IRs will help to pick up the slack....what great idea will the PAP think of next?....

There were a few rascals who very early on warned about the rising poverty in what seems to be an outwardly affluent society. One of them, an opposition politician was was critcised for engaging in politics of jealousy and was subsequently made a bankrupt so that he will better understand that being poor in Singapore is actually not so bad. Another wrote alot about the "new poor" but the PAP paid no attention to him until he wagged his finger at a CCTV at a civil servant over a matter concerning some forms. Another guy who felt that "Singaporeans are fed up with progress" was accused of spreading despondency and lost his job as a freelance writer for one of our newspapers whose role is to make us feel good. Thanks to the PAP's style of govt which is : there is no problem until the PAP says there is a problem, we can all relax and believe our lives are getting better. ...let us rejoice when we see those wonderful GDP numbers.....

Sunday, January 14, 2007

The Art of Subsidizing Housing in Singapore

There is a spate of letters in the Straits Times forum page asking whether HDB flats are subsidized, how much does it cost to build a flat, etc. can the HDB be more transparent...?

Once again ordinary Singaporeans have failed to appreciate the great achievement of HDB to house 70-80% of the population. Just because your HDB flat cost more than a landed property and 5 times more than a condo in Johor, it doesn't mean HDB is not subsidizing you.

Understanding the Subsidy

Many Singaporeans are asking how much it cost to build those HDB flats. Since they are delivered to buyers not in stayable condition, you have to spend tens of thousands more to fix it up with flooring etc. Some people are wondering if the subsidized flats are sold above building cost. ....Of course they are!!!! Judging from the fact that in Johor they can sell a condo for $40K complete with pool, parking and clubhouse.....the cost is of building a HDB flat is probably in that ballpark since many construction workers are malaysians and construction companies work both sides of the Causeway.

Construction costs have NOTHING to do with subsidy. What HDB gives out is a market subsidy. As long as your new flat is less that what it cost to buy off the market, you are subsidised. Even if HDB can construct each flat for $1, they can claim that they subsidise you. Cost of land, construction, material etc etc are totally immaterial. Get it?

So some of you may ask in that case it is possible for HDB to price flat above total costs and make a profit. If you ask them, HDB does not make profit, it makes a SURPLUS. Over the years, they make billions of surplus.

Understanding the Market in Market Subsidy

Have you ever wondered what will HDB flats costs if the PAP did not change the rules and allow CPF to be used to pay for them? Have you ever wondered what they will cost if only 12 year housing loans are allowed instead of 25 yr loans?

Since the HDB supplies 70-80% of property market, it is a virtual monopoly. Given that HDB is part of the govt, it also has control of the property market in terms of policy. So Singaporeans are subsidised against a market that is created by the HDB and govt.

In order to give you a BIG market subsidy, they have to ensure that the market price is high. That incidentally will also help to enhance their surplus.


One of my relatives bought a flat after 6 years she realised that a similar flat now cost $80k less than hers. Her flat which was based on the market subsidy when she bought is now below the market price.


I think it comes as no surprise to anyone that our subsidised HDB flats are the most expensive public housing in the world. More expensive that in countries where incomes are far higher. Thanks to the market subsidy that we all receive, we should all consider ourselves lucky to be able to own affordable housing paid with loans stretching over 25 years.

This subsidized housing is also part of the reason why many Singaporeans will have very little CPF when they hit age 55 and have to work until they are 80 years old. Think about that, market subsidised housing that helps to motivate you to work longer and harder.....a uniquely Singapore phenomena.

Jan 2, 2007 Settle question of HDB subsidy once and for all
I REFER to Mr Viktor Ye Kok Kheong's letter, 'Did HDB land pricing use Raffles Place as rule?' (ST, Jan 1).

The Housing Board said that 'HDB does not reveal the land and construction costs of specific projects as they vary from location to location... That is why it incurs an overall deficit each year for its home-ownership activity, as reflected in its annual accounts which is available publicly'.
The reason given for not revealing the land and construction costs is somewhat illogical, because the HDB is not being asked to disclose the costs of every project or location. Why not just reveal the breakdown of total costs, and a few examples of some projects and locations, now and in the past?

What the HDB is saying is akin to 'since we cannot tell you each and every item, we won't tell you anything at all'.

Every once in a while, the question of the cost and pricing of HDB flats comes up in the media. So, why not put a stop to the on-going speculation that HDB flats are not really subsidised?
In the interest of maintaining Singapore's reputation of having the highest standards of transparency and corporate governance, the HDB should keep up with the standards of disclosure in the private sector.

To illustrate the point of transparency, no real-estate investment trust or publicly-listed company would be able to give the reason given by the HDB for not breaking down the information on the major cost components in its accounting statements.
How can we tell whether HDB prices are 'at market price' without a breakdown of the land and construction costs for comparison purposes?

As to the market price for land taking into account the 'substantial resources... invested to provide major infrastructure, such as roads, MRT, sewers and utilities, for the new housing development', thus significantly enhancing the land value beyond the acquisition costs incurred by the Government, aren't the billions collected every year from road tax, electronic road pricing, property tax, 30 per cent water- conservation tax, etc, supposed to be used to provide such infrastructure?

Leong Sze Hian


ST 10/1/07
I REFER to the letters from Mr Viktor Ye Kok Kheong and Mr Leong Sze Hian (ST, Jan 1 and 2, respectively) pertaining to the subsidy for new HDB flats.

First, Mr Ye asked if it is true that the Chief Valuer values all land in Singapore using Raffles Place as the benchmark. We wish to state that it is not so.

It is a fundamental valuation principle that lands are valued based on the specific attributes of the site, such as location, the permitted use of the land, and tenure.

The Chief Valuer's valuation has to be supported by comparative land-sales evidence.
It is simply not tenable to benchmark every plot of land to Raffles Place pricing, as this would drive property prices beyond the reach of most Singaporeans.

For example, state land alienated by the Singapore Land Authority for housing in Tampines will be valued taking into account the market values of housing in Tampines, while state land for industrial use in Tuas will take into account industrial- land values in Tuas, etc.

Second, Mr Leong asked HDB to reveal its land and construction costs to prove that HDB flats are subsidised. He has missed the point.

To understand the full extent of public-housing subsidy for new HDB flats, one should be comparing the market value of the flats with the sale prices charged by HDB, rather than look at the input costs of land and building.

New flats are subsidised as they are being sold at prices that are lower than what they would otherwise fetch in the open market.

If this subsidy is not real, why should many flat buyers choose to buy new flats from HDB instead of resale flats in the open market using the CPF Housing Grant?
Third, Mr Leong asserted that HDB has not kept up with the standards of disclosure in the private sector. He is wrong.

HDB's financial statements are prepared in accordance with the Financial Reporting Standards, audited by the Auditor-General and tabled in Parliament for information.

HDB's standards of disclosure and governance are no less than those required of publicly listed companies and real-estate investment trusts in Singapore.

Overall, HDB is unable to recover the development cost of new flats that it offers to the public, and has incurred a deficit averaging $390 million in its home-ownership programme in the last five years. These figures are reported in HDB's audited financial statements, which are publicly available for inspection and scrutiny.

Kee Lay Cheng (Ms) Deputy Director (Marketing & Projects) For Director (Estate Administration & Property) Housing & Development Board

Wednesday, January 03, 2007

High level of police efficiency in Singapore!

Yes Singapore is a shopping paradise. But even for shopping we have rules to follow. Please be aware of them and don't end up like the unfortunate shopper in the article below.

If you have 2 items on your shopping list, one of them found inside the shopping center and the other displayed outside, you have to pick up the item inside and pay for it first before walking out to pick up the other item. Otherwise you will trigger the alarm system and the police have no choice but to jail or fine you. In any other country, they might accept that you want to pick up both items so you can pay them together but in Singapore it results in a criminal offense.

Why can't the police and security accept a reasonable explanation and let you off? Because in Singapore there is this principle of kiasuism, when happen if you're really trying to steal the item inside by walking out. If they let you off, they risk their shopping center becoming abused by shop lifters. This is also why we cannot give out help to the poor what happen if there are people pretending to be poor to get the help ...so no help for the poor.

Thank goodness our police operate by the book ...so does our government. Our people are trained to follow rules religiously and they are punished severely if forget the rules. This has motivated Singaporeans to be law abiding citizens. We have a peaceful and secure society because we have so many rules.


My innocent nephew was handcuffed in public

An angry Marcus Tan sent in this email to STOMP:

To All Happy Shoppers :

Beware of Traps With Outdoor Sales Items OUTSIDE Department Stores eg…OGShoppers enjoying their year-end shopping should be VERY CAREFUL not to be trapped!!My nephew was shopping at OG Albert Court on the 30th Dec 2006. He picked up a packet of singlets that he wanted.He proceeded to the outdoor areas, HOLDING THE PACKET OF SINGLET WITH HIS RIGHT HAND EXPOSED, to buy a pillow displayed outside. As he passed out of the store, the Alarm sounded….the guard came and brought him to the office. They refused to listen to any reasoning, Especially the FACT that the packet wasn't hidden in any bags BUT EXPOSED VISIBILY ON HIS RIGHT HAND. . Who would want to display something that they have stolen so visibily????.…..IT was a GENUINE MISTAKE!!!! But nobody cared. The police were called in and he was taken away HANDCUFFED IN PUBLIC !!!!Please advise your Esteemed Readers not to be trapped by this situation. Marcus Tan


Mr. Tan tells us that his nephew is a very timid 30-year-old male who is well educated with a stable job.The nephew was shopping alone around noon on the 30th of December for a pillow for his newly rented room at the area shown below.Mr. Tan states that OG's security personnel and the police did not take his nephew's explanations into consideration at all. "The police only trusted the secutry personnel and refused to even hear him out," said the outraged Mr. Tan,"they said that since he has a clean record, he should just admit and pay a fine and move on.
"The family has engaged a lawyer to mitigate for him, as he was innocently made to admit in the statement by "screaming officers who threatened him". "It's a trap!" declares Mr. Tan in his second email to STOMP, "Traps like this exist in almost all the shopping centers all over Singapore."This is just one side to the story. Police are currently investigating the case and STOMP is waiting for OG's response on the matter. Look out for an update soon!